Churchill, Magna announce agreements

Churchill Downs Inc. and Magna Entertainment Corp. have reached an agreement

to form TrackNet Media Group, a joint venture that will allow each company to

distribute horse racing content via Magna Entertainment's advance deposit

wagering (ADW) platform XpressBet, a Churchill Downs-owned platform under

development called twinspires.com, as well as to third parties. In addition, Churchill Downs has purchased a

50-percent interest in Magna Entertainment's horse racing TV channel, HRTV.

TrackNet Media will also purchase horse racing content from third parties and

make it available through each company's distribution platforms.

Churchill Downs and Magna Entertainment hope to accomplish four objectives

with the agreements:

1. Foster an open and competitive business environment where horse racing

content is readily available to customers through a wide variety of distribution

points and wagering platforms;

2. Create an innovation-based environment of sustainable growth for the North

American horse racing industry domestically and internationally;

3. Enhance wagering integrity and security to address horse racing signal

piracy and ensure content creators are compensated; and

4. Benefit the horsemen and racetracks that together create racing content

through new industry growth.

According to the text of the joint press release, the specific agreements are:

Churchill Downs and Magna Entertainment have formed a joint venture called

TrackNet Media Group LLC through which the full breadth of the companies'

respective horse racing content will be available to each company's various

distribution platforms, including Magna Entertainment's advance deposit wagering

platform, XpressBet (ww.xpressbet.com), a Churchill Downs-owned ADW platform,

www.twinspires.com, under development, and to third parties, including

racetracks, OTBs, casinos and other ADW providers. TrackNet Media will also

purchase horse racing content from third parties to make available through

Churchill Downs' and Magna Entertainment's respective distribution platforms.

Both companies believe that 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 Media 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 Entertainment believe that our industry must

embrace change and drive innovation to make our products more appealing to our

customers," Churchill Downs' President and Chief Executive Officer Robert

L. Evans said. "We believe that our customers and our industry will benefit from

broader distribution of our racing signals and that integrity and security with

respect to our signals is paramount. We hope other content owners will endorse

our approach in similar reciprocal agreements with TrackNet Media to ensure the

broadest possible distribution of racing content to markets worldwide."

"To better serve our customers and grow the financial return for our

horsemen, Magna Entertainment and Churchill Downs believe the time has come to

make our simulcast content available through as many trusted and eligible

distribution platforms as possible," Magna Entertainment Chief Executive

Officer Michael Neuman said. "In doing so, we can maximize the content available to

customers and the revenue available to the horsemen and racetracks who create

the industry's content."

In addition, Churchill Downs has purchased a 50-percent interest in Magna

Entertainment's horse racing TV channel, HRTV. Both Churchill Downs and Magna

Entertainment will work to offer as much of their respective live export

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. HRTV will seek additional content

providers who wish to televise their horse racing content alongside the

Churchill Downs and Magna Entertainment content.

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 (G1) contenders. "Target Louisville" will air

daily during the week leading up to the 133rd Kentucky Derby at Churchill Downs.

"With the inclusion of Churchill Downs-owned racing content on HRTV, this

television channel becomes a significant destination for horse racing fans,"

Neuman said. "With Magna Entertainment and Churchill Downs serving as anchor

tenants, HRTV represents a subscriber acquisition opportunity for carriers and a

distribution opportunity for content providers to consider as their television

rights become available."

Churchill Downs is currently developing its own ADW platform,

www.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

Entertainment-owned racing content as well as other racing content made

available through TrackNet Media licensing agreements. Customers can visit

www.twinspires.com to learn more about its future offerings and sign up for

e-mail alerts. Churchill Downs will share more information about

www.twinspires.com, including the target date for launch, with customers and

members of the media in the next few weeks.

One of the primary focuses for the companies' joint venture, TrackNet Media,

will be enhanced wagering integrity. TrackNet Media will invest significant

resources to better monitor the entities that have access to the companies'

racing content and wagering pools. TrackNet Media staff will work closely with

domestic and international outlets licensed to simulcast and accept wagers on

TrackNet Media-licensed products to ensure that content offered through TrackNet

Media is being used appropriately and in ways that provide compensation to the

horsemen and racetracks that produce the content. Third parties will not be

allowed to sublicense TrackNet Media content to other tracks, OTBs, casinos,

rebate shops or ADW providers, thereby reducing the risk of horse racing signal

piracy and other integrity issues.

Both Churchill Downs and Magna Entertainment will continue to honor all

existing contractual obligations with respect to their content. TrackNet Media's

ability to license simulcast content from Churchill Downs-owned racetracks to

ADW providers other than the Television Games Network (TVG) will commence with

the expiration of those tracks' individual TVG agreements. TrackNet Media 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 Arlington Park through August

6, 2007, and from Calder Race Course through the end of its 2007-08 racing

season, which ends January 2, 2008.

Churchill Downs 2007 Spring Meet will be available on HRTV. Arlington Park,

Calder Race Course and Fair Grounds Race Course will join the HRTV line-up as

their respective TVG contracts expire.

"We believe the business initiatives we're launching will benefit customers

in many ways, including the optimal distribution of simulcast content

originating from Churchill Downs- and Magna Entertainment-owned racetracks to

other tracks, OTBs, casinos and ADW providers," Evans said. "We hope other

content providers and content licensees will follow our example, and make their

content available as well.

"The transition to a new and more competitive business model may cause some

temporary disruptions for some customers. We acknowledge that and want to

apologize in advance for any inconvenience to them. In the end, we believe

customers will benefit greatly from the approach we're taking, and we appreciate

their patience and understanding."

TrackNet Media will be headquartered in Louisville, Kentucky. TrackNet Media

and HRTV will have offices in Louisville and Arcadia, California.

Scott Daruty,

formerly the chief U.S. counsel for Magna Entertainment, will serve as TrackNet

Media's chief executive officer. Patrick Troutman, who served as vice president

and general manager for the Churchill Downs Simulcast Network (CDSN) and

Churchill Downs Simulcast Productions, will serve as TrackNet Media's executive

vice president. Current members of CDSN's support staff will join TrackNet

Media, as will certain members of MEC's simulcast operations.

Magna Entertainment and Churchill Downs previously formed a joint venture

with Racing UK, a media rights company and subscription television channel owned

by 31 leading British racecourses, to operate the international television

channel Racing World, which brings the best North American and international

racing five days a week, six hours a day to British and Irish viewers. British

and Irish customers can wager though the British bookmaker Victor Chandler.

Racing World plans to continue to add additional bookmakers throughout 2007.