08/03/2006 11:00PM

Churchill, Magna team up for New York bid


Churchill Downs Inc. and Magna Entertainment Corp., the country's largest racetrack companies, have joined forces to bid on the franchise held by the New York Racing Association, the two companies announced Friday.

The partnership brings together two publicly traded companies that own some of the most prominent tracks outside of New York and hold two of the three Triple Crown races. Although the two companies are considered competitors and have sparred on issues in the past, Churchill and Magna earlier this year reached another partnership when it created a television service that beams North American races into homes in England and Ireland.

Churchill and Magna join an evolving list of companies vying for the franchise to operate Aqueduct, Belmont Park, Saratoga Race Course, and a slot-machine casino at Aqueduct, which NYRA holds until Dec. 31, 2007. A state committee has asked companies to respond by Aug. 29 to a request for proposals for a 20-year right to operate the three tracks and the casino. The committee will issue its recommendations to the governor and legislature on Sept. 29.

"CDI and MEC share a common view regarding the importance of New York racing to the overall success of hose racing in North America," the companies said in a joint statement.

Julie Koenig Loignon, a spokeswoman for Churchill, said that the company would not release any additional details on the partnership because of the competitive bidding process.

"The nature and details of our bid will be first seen by the committee," she said.

Koenig Loignon said that the companies might take on additional partners, but declined to identify candidates.

Magna's chief financial officer, Blake Tohana, did not return a phone call on Friday.

In June, Churchill and Magna separately notified the committee that they intended to bid for the franchise. Together, the companies own or operate Churchill Downs, Santa Anita Park, Gulfstream Park, Arlington Park, Calder Race Course, Fair Grounds Race Course, Lone Star Park, Pimlico Racecourse, Golden Gate Fields, and Laurel Park, among others.

Competitors for the franchise include NYRA, Empire Racing Associates, five of the six New York offtrack betting companies, and Excelsior Racing Associates. Empire, which was founded by a group of New York business and political leaders, recently reached partnership agreements with the racetrack and casino operators Delaware North and Woodbine Entertainment Group.

A successful bid would give Churchill and Magna combined control of the Triple Crown races. The Kentucky Derby is staged at Churchill Downs and the Preakness Stakes at Pimlico. The Belmont Stakes is held at Belmont Park.

Churchill, Magna, and NYRA are still partners in Triple Crown Productions, a company formed in the 1980's to market the Triple Crown races. But the partnership is in jeopardy of dissolving after NYRA negotiated a separate television contract with ABC for the Belmont Stakes. NBC televises the Kentucky Derby and Preakness.

Magna and Churchill are expected to submit a bid to operate the franchise under a for-profit structure. NYRA is structured as a not-for-profit, and much of the debate surrounding the future of the franchise has centered on which business model will best serve New York racing. So far, only NYRA has indicated that it intends to retain a not-for-profit structure.

Churchill recently hired a new chief executive officer, Robert Evans, who is replacing the company's longtime head, Tom Meeker. The company has a reputation for being cost-conscious and deliberate. In contrast, Magna has lost nearly $350 million over the past four years and has $650 million in long-term liabilities on its balance sheet. The company was not expected to be able to make a serious bid for the franchise without a partner with a strong balance sheet.

* Michael Dubb, a real estate developer who built the child-care center on the backstretch of Belmont Park, has been elected to Empire Racing Associates' board of managers, the company announced late Thursday.

The bidders so far

Capital District OTB: One of six locally owned New York OTB companies; five are bidders

Capital Play Pty Limited: Australian bookmaking company

Churchill Downs/Magna Entertainment: Country's largest racetrack operators; partners in Racing World, a satellite television service for North American races in Britain

Empire Racing Associates: Partners include Delaware North, a casino and real estate company that owns Finger Lakes racetrack, and Woodbine Entertainment Group, racetrack and casino operator outside Toronto. Received exclusive endorsement of New York Thoroughbred Horsemen's Association.

Excelsior Racing Associates: Headed by Steve Swindal, partner in New York Yankees, son-in-law of horse owner and breeder George Steinbrenner. Includes David Cordish, real-estate developer, and Richard Fields, former Donald Trump associate

LRW Development: Owned by casino operator Steve Wynn

MGM Grand: A partner with NYRA in Aqueduct casino project

Monticello Raceway: Catskill region New York harness track

Nassau Regional OTB Corp.: One of two Long Island OTB's

New York City OTB Corp.: Country's largest off-track betting company

New York Racing Association: Has held franchise since 1955; claims ownership of Aqueduct, Belmont Park, and Saratoga Race Course

Television Games Network: Horseracing broadcast and wagering company owned by Gemstar/TV Guide; exclusive broadcast partner of NYRA outside New York state

Suffolk Regional OTB: Second of two Long Island OTB's

Western Regional OTB: Rounds out the five OTB bidders

WNY Gaming Associates has withdrawn its bid