03/06/2007 12:00AM

Churchill, Magna vow to share signals

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The chief executives of Churchill Downs Inc. and Magna Entertainment Corp. made assurances on Tuesday that they intend to make their signals widely available on existing account-wagering platforms despite plans by the companies to consolidate their signals on one racing network.

The comments, which were made by Churchill chief executive Bob Evans and his counterpart at Magna, Michael Neuman, during a conference call arranged by the companies, came one day after Churchill and Magna announced a partnership to broadcast both companies' races on Magna's television network, HRTV, and offer betting on the races through two account-wagering companies that will be owned and operated separately.

The announcement of the partnership set off concerns on Monday among some account-wagering operators and investors that Churchill and Magna would restrict betting on their signals to the two account-wagering companies, shutting off the competition. Evans said that those fears were groundless.

"If there are people who are nervous, I think they are nervous unnecessarily," Evans said.

Neuman, who was appointed Magna's chief executive officer last week, said that reaching out to third-party distributors would be in the partnership's best interests because they needed to get access to their competitors' customers. Evans used an analogy of manufacturers striking separate distribution deals with competing stores. But he also said that any deals with account-wagering operators would be based on the economic benefit to the parties.

"We need to make deals with all the distribution channels, and those deals have to make economic sense to both sides," Neuman said.

The account-wagering market is currently dominated by third-party companies that do not own racetracks, including Television Games Network, Youbet.com, and AmericaTab. On Monday, Youbet's stock declined nearly 10 percent, and on Tuesday, the stock took another hit, declining 19 cents, or 7 percent, to a new 52-week low of $2.70.

Charles Champion, Youbet's chief executive, did not return a phone call on Tuesday, but the company issued a statement on Tuesday morning that praised the Magna-Churchill partnership. "While we have not seen any agreements or proposals at this early stage, the joint venture's stated emphasis on broader distribution of racing content bodes well for our non-exclusive business model," Champion said.

Companies like Youbet and AmericaTab obtain the wagering and broadcast rights to races through direct agreements with the racetracks or through sub-licensing deals with their competitors. Magna's sub-licensing deals with the companies expire early in the spring, and Churchill's expire throughout the year.

Mike Weiss, the general manager of AmericaTab, which operates a suite of privately owned account-wagering platforms, said that when he heard about the Churchill-Magna partnership on Monday he "took a deep breath."

"I had to sit down and kind of go slow to think it all out," Weiss said. "But I really do think that they want what is in the best interests of racing, and what I really like is that these are two racing companies."

TVG officials also did not return phone calls on Tuesday, but the general consensus is that the company - which has exclusive contracts with Churchill's tracks that expire throughout the year - will likely listen to Magna and Churchill about a proposal to swap racing signals. TVG's lineup is highlighted by Del Mar, Hollywood Park, Keeneland Racecourse, Oak Tree at Santa Anita, and the tracks operated by the New York Racing Association.