Chuck Champion has resigned his leadership roles with Youbet.com, ending a five-year tenure that included bouts of growth and turmoil for the advance deposit wagering entity.
Champion, who is currently serving as Youbet.com's chief executive officer and chairman, will leave the company Dec. 11 to pursue other opportunities, a Nov. 30 news release stated. He will be replaced on an interim basis as CEO by Gary Sproule, the company’s former chief financial officer who has been serving as chief operating officer since July.
“I’m dedicated to seeing Youbet grow as I have been for the last five years,” Champion said in the release. “I remain a large shareholder, and I want to see my colleagues, the board, and all the shareholders succeed.”
The announcement comes in the midst of a turbulent period for the company in which Youbet.com's offshore telephone wagering entity, International Racing Group, is part of a federal investigation looking into some of its activities. Youbet.com's California headquarters were searched by federal agents in early October, and $1.5-million in three IRG bank accounts was later seized by the federal government.
Youbet.com spokesman Hud Englehart said the investigation did not play a part in Champion's decision to resign.
"The IRG issue, per se, had nothing to do with the decision," he said. "In talking to the board this morning, Chuck felt investors had loss confidence in his own mission for the company, and it was reflected in the stock price.
"Having reached that conclusion and having talked to the board about it, they kind of agreed that was the case. And they felt perhaps a fresh perspective was needed for the company."
In the aftermath of what is called the dot.com stock boom of the late 1990s, a period in which Youbet.com stock hit its all-time share price of $23.25, the company’s stock languished below $2 for nearly three years.
During Champion’s reign, the stock rebounded to levels approaching and exceeding $6 per share. But the share price plummeted almost 75% since the beginning of the year and hit a four-year low of 79 cents Nov. 12. Shares were trading at $1.12 toward the end of Nov. 30 trading.
Youbet.com board member James Edgar, who is a former governor of Illinois, praised Champion's efforts during his tenure. “The board is grateful to Chuck for his outstanding contributions to the growth and success of the company and the high level of professionalism he has brought to it,” Edgar said in the release.
The release did not comment on the investigation, which Youbet.com claims is focused on IRG customers and some employees, but instead highlighted growth realized during Champion’s tenure.
When Champion joined Youbet.com in May 2002, the company was on the verge of collapse, the release said. Through “organic growth and acquisition” the company’s wagering action advanced more than seven-fold, from $110-million to $750-million during 2002-2006, resulting in a 45% share of the United States ADW market, the release said.
Under Champion’s tenure, Youbet.com launched marketing programs such as Youbet Advantage and customer protection programs such as Players Trust.
Youbet.com also became a player in what has been called the “signal wars,” where earlier this year content from Churchill Downs Inc. and Magna Entertainment Corp. tracks were pulled together under the TrackNet Media Group umbrella. TrackNet content, which had previously been available to Youbet.com and IRG, is no longer available in most cases on the company’s platforms.
A separate release said Sproule will focus on Youbet.com's “core online business including driving top-line revenue growth and ongoing initiatives to make the Youbet.com platform more efficient.”
“We believe the company is well-positioned to leverage its industry expertise in what is the fastest-growing segment of the pari-mutuel industry,” Sproule said in the release.
Attempts by The Blood-Horse to contact Sproule for additional comment were unsuccessful.
Englehart said there would be no "lame-duck" period for Youbet.com under Sproule while the board searches for a successor to Champion.
"There is no sense of that whatsoever," he said. "The board is going to review an aggressive operating plan for 2008. The pedal is still going to be on the metal, as they say."
Prior to joining Youbet.com, Sproule was CFO at Disney Interactive and spent four years as CFO of WhatsHotNow.com and Magnet Interactive Communications. He also worked for 25 years at energy company Unocal, where he eventually served as COO of the 76 Products Marketing Division.