Showing posts from July, 2008


The privatization of Clear Channel Communications ends a 2-year effort to buyout the leading radio and outdoor advertising firm. The $17.9 billion buyout by Bain Capital and Thomas H. Lee Partners allows the new owners the opportunity to pursue strategies with less influence from unpredictable investors pursuing short-term interests. The sale comes amid heavy competition in terrestrial and satellite radio, but provides the new owners more flexibility in deciding how to best operate the 900 radio stations, radio programming services, and subsidy that owns one million outdoor ad locations.

The sale is just one more in a growing trend for private equity purchases of media firms. Their interest in media companies stems from the fact that the market value of many does not reflect the underlying cash flows and asset values or the mid- to long-term prospects of the firms.

The valuation challenge of media occurs in good part because advertising expenditures are not evenly distributed throughout…


Sometimes companies forget what businesses they are in and Comcast seems to be the latest media and communication company to do so.

The problem evidenced in the dispute between the FCC and Comcast over its traffic management policies blocking or slowing BitTorret and other files in violation of FCC network neutrality rules requiring open access. Without addressing whether regulators or Comcast are right in the dispute, it is clear from the company’s response that it has lost sight of it core business.

Comcast argues it was engaging in reasonable business practices by limiting the flow of BitTorrent files (often used to download large video, audio, and text files) because they push up the flow of traffic and slow the system. In Comcast’s view, the system and its integrity are its raison d’etre and represent the business it is in. It is easy to understand why the company and its executives might think so.

Comcast spends the majority of its effort and personnel creating and maintaining its …


The announcement of the finalists for the 2008 Emmy drama nominations shows how weak major television networks have become and the feeble program strategies they are now employing. AMC’s “Mad Men” and FX’s “Damages” became the first series ever produced by basic tier cable channels to become finalists for best series and they were joined in the 6 nominee list by Showtime for “Dexter”.

The results were even worse for networks in the major acting categories: Only 1 of the five Emmy nominees for lead actor and 2 of the five for lead actress went to network programs.

Overall, 24 cable network programs received nominations and 7 cable channels received 10 or more nominations. HBO received 85 nominations—beating out all the broadcast networks, Showtime received 20 nominations, and AMC received 20 nominations.

Drama is a bellwether of the health of television programming and networks continue to fair poorly. It is a particularly important genre, socially and culturally, because it allows explor…

The Economics of Owning a Race Horse in New York

I've been wanting for some time to write about the economics of racing from the owners' and trainers' point of view. And the quarterly ritual of preparing financial statements for my Castle Village Farm partnerships has finally provided both the motivation and the data to get started. So, this post will look at racing from an owner's point of view. I'll follow up later with a look at the economics of being a trainer.

In both cases, I'll be focusing on the New York racing scene, that is, as an owner or a trainer stabled at Aqueduct or Belmont, and making an annual pilgrimage to Saratoga. New York has the best purses around -- they'll average over $700,000 a day at the upcoming Saratoga meet -- but it also has very high expenses. So, even with the kind of horses that most of us are satisfied to have -- solid, hard-working thoroughbreds -- not a stakes horse, but not a $4,000 Finger Lakes claimer either -- it's not easy to come out ahead -- even when your…

Victory at Ellis Park -- and Calder?

My previous post, using the brief closure of Ellis Park as the lead-in for a discussion of horsemen's attempts to win a fair share of simulcasting revenue, has, happily, been superseded by events. The racing press is reporting that the Ellis horsemen have been successful in negotiating a deal for a fair share -- 6% of handle or one-third of the takeout, whichever is higher -- of revenue from advance deposit wagering (ADW) sites that accept bets on the Ellis Park races. That's exactly what the Thoroughbred Horsemen's Group has been seeking, so far without success, in its negotiations with tracks owned by Churchill Downs Inc. and other corporate powers. As a result of the agreement, Ellis Park will reopen Friday, July 11th.

I've updated my previous post to reflect the Ellis Park agreement. This is an important victory for fairness, and for the horsemen.
Also, the press is reporting that horsemen have reached an agreement with Calder, which is owned by Churchill Downs, Inc.…

Ellis Park Closes -- And Reopens --Now We're Playing for Keeps

On July 2nd, just two days before this year's Ellis Park (KY) meet was due to begin, track owner Ron Geary announced that he was calling off the meet, because, he said, the horsemen's association had refused permission to send Ellis's simulcast signal to out-of-state internet betting sites. By this weekend, it was reported that Ellis horsemen and Geary had reached a deal to reopen the track as of July 11th. Early press reports say that Ellis horsemen achieved their goal og getting one-third of the takeout from ADW (advance deposit wagering) sites for purses.

The simulcast issue is almost certainly not the real reason that Geary closed the track, treatening to deprive Kentuckians of a summer racing venue that had been around for over 80 years. Maybe he couldn't take the competition from Indiana casinos, maybe he just planned to sell the plant for its real estate value, but the horsemen's stance on simulcasts certainly made for a useful whipping boy. And Geary, who bo…