Churchill Downs sues TV Games Network

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LOUISVILLE -- Churchill Downs Inc. is suing its simulcasting partner, accusing the Television Games Network of violating its contract by not finding an overseas venue for racing broadcasts until after the racetrack company signed on with a competitor.

Churchill Downs said the Television Gaming Network, known as TVG, had the rights to find a broadcast outlet overseas for its races, but failed to do so during the nearly 10 years it held the contract. After TVG officials said they were concentrating on the U.S. market, Churchill Downs teamed with rival Magna Entertainment and Racing UK Limited in February 2000 to form "Racing World," a venue to broadcast Churchill Downs' races in England and Ireland.

Only then did TVG sign on with "At The Races," a British broadcast partner, to telecast Churchill's races overseas, racetrack officials said.

Under the terms of the contract, TVG can't consign to a third party the broadcast rights to races at Churchill Downs properties without the company's permission, said Julie Koenig-Loignon, a spokeswoman for Churchill Downs Inc.

"They cannot do that without our prior consent," Koenig-Loignon said. "It certainly would create in-market competition."

The lawsuit, filed Monday in U.S. District Court in Louisville, seeks unspecified damages of more than $75,000 from TVG.

A spokesman for TVG did not immediately return calls seeking comment.

Churchill Downs Inc. and TVG signed an agreement in 1997, giving TVG the rights to simulcast races both in the United States and internationally from Churchill Downs, with similar agreements covering the other five tracks owned by the company. The contracts included a clause that required TVG to get permission from Churchill Downs Inc., before giving a third party the simulcasting rights, Koenig-Loignon said.

"That did not happen in this case," Koenig-Loignon said.

In the lawsuit, Churchill Downs Inc., called TVG's performance "disappointing," and said it has tried for several years to induce TVG into expanding beyond the 10 to 12 states where it was available, including a move into the overseas market. Instead, TVG got permission and sublicensed the internet broadcasting and wagering to YouBet.com and America TAB in 2001.

In 2005, Churchill Downs' then-CEO Tom Meeker twice asked TVG executives if they planned to only pursue broadcasts in the United States and TVG CEO Ryan O'Hara said yes both times, the lawsuit said.

That's when Churchill Downs Inc. helped form "Racing World," and so far has spent about $750,000 on the project, Koenig-Loignon said. Meeker, in a conference call last month, said "Racing World" will give American racing a global presence as well as serve as a pilot for possible ventures in the future.

"While this effort is targeted at the U.K., and Ireland, it does serve as a blueprint for future deployment in other foreign markets," Meeker said.

Last month, TVG announced that it reached agreement with "At The Races" to simulcast races from Churchill Downs' properties in England and Ireland. In written statements about the deal, TVG touted its affiliation with Churchill Downs and its related tracks, including the Fair Grounds in New Orleans.

The contract between the Fair Grounds and TVG allows races from that track to be simulcast in north America, not internationally, Koenig-Loignon said. Churchill Downs Inc. is unsure what TVG has planned, given that racing at all Churchill Downs tracks but the Fair Grounds closes for winter in the next two weeks.

"We don't know what they are planning," Koenig-Loignon said. "They haven't been forthcoming with their information."
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