Technology

Churchill Downs Buys One-Half of HorseRacing TV

3/05/2007 3:54 AM Eastern

Racetrack owner Churchill Downs, home of the Kentucky Derby, purchased a 50% interest in Magna Entertainment’s HorseRacing TV channel.

Both Churchill Downs and Magna will work to offer as much of their respective live simulcast content as possible on HRTV and will actively explore how the television medium can be used to more effectively serve horse-racing customers -- and the industry as a marketing vehicle.

In addition, HRTV will seek additional content providers that wish to televise their horse-racing content alongside the Churchill Downs and Magna content.

HRTV is a 24-hour television network providing up to 15 hours per day of wire-to-wire coverage of live horse-racing action from more than 70 thoroughbred, harness and quarter-horse racetracks in the United States, Canada and Australia.

Churchill Downs owns and operates horse-racing venues throughout the United States, and its five racetracks in Florida, Illinois, Indiana, Kentucky and Louisiana host many of North America’s most prestigious races, including the Kentucky Derby and Kentucky Oaks, Arlington Million, Princess Rooney Handicap, Louisiana Derby and Indiana Derby.

Magna is North America’s largest owner and operator of horse racetracks, based on revenue, including such major venues as Santa Anita Park, Gulfstream Park and Pimlico Race Course, home of the Preakness Stakes, the middle jewel of racing’s Triple Crown. It develops, owns and operates horse racetracks and related parimutuel wagering operations, including off-track-betting facilities.

As part of its 2007 offerings, HRTV will broadcast Target Louisville, a 30-minute television program highlighting the training, workouts and final preparations of Kentucky Derby contenders. Target Louisville will air daily during the week leading up to the 133rd Kentucky Derby at Churchill Downs.

The deal was just one of several agreements Churchill Downs and Magna unveiled. They also formed a joint venture called TrackNet Media Group, through which the full breadth of the companies’ respective horse-racing content will be available to each company’s various distribution platforms, including Magna’s advance deposit wagering, or ADW, platform; XpressBet, a Churchill Downs-owned ADW platform; twinspires.com, which is under development; and to third parties, including racetracks, OTBs, casinos and other ADW providers.

TrackNet will also purchase horse-racing content from third parties to make available through Churchill Downs’ and Magna’s respective distribution platforms.

Both companies believe a single organization performing these important functions will promote optimal distribution of content across a broader spectrum of platforms, including ADW providers, international outlets and distributors that offer rebates. By creating a single cost-effective organization to more efficiently buy and sell racing content, TrackNet will have the resources to pursue wagering integrity and security objectives, with a view toward generating revenue for horsemen and racetracks that create content.

Both Churchill Downs and Magna will continue to honor all existing contractual obligations with respect to their content. TrackNet’s ability to license simulcast content from Churchill Downs-owned racetracks to ADW providers other than Gemstar-TV Guide International-owned Television Games Network will commence with the expiration of those tracks’ individual TVG agreements.

TrackNet will have immediate access to racing signals from Churchill Downs racetrack for its 2007 Spring Meet, which begins April 28, and to signals from Fair Grounds Race Course when the track begins its 2007-08 meet in November 2007.

TVG will continue to have access to simulcast content from ArlingtonPark through Aug. 6 and from Calder Race Course through the end of its 2007-08 racing season, which ends Jan. 2 next year.

Churchill Downs’ 2007 Spring Meet will be available on HRTV. ArlingtonPark, Calder and Fair Grounds will join the HRTV lineup as their respective TVG contracts expire.

TrackNet will be headquartered in Louisville, Ky. TrackNet and HRTV will have offices in Louisville and Arcadia, Calif.

Scott Daruty, formerly the chief U.S. counsel for Magna, will serve as TrackNet’s CEO. Patrick Troutman, who served as vice president and general manager for the Churchill Downs Simulcast Network and Churchill Downs Simulcast Productions, will serve as TrackNet’s executive VP. Current members of CDSN’s support staff will join TrackNet, as will certain members of MEC’s simulcast operations.

Churchill Downs is currently developing its own ADW platform, twinspires.com, which will launch later this year. The site will offer racing fans the opportunity to watch and wager on Churchill Downs- and Magna-owned racing content, as well as other racing content made available through TrackNet licensing agreements. Customers can visit the site to learn more about its future offerings and sign up for e-mail alerts.

Churchill Downs will share more information about twinspires.com, including the target date for launch, with customers and members of the media in the next few weeks.

September