Showing posts from December, 2008


First it was record companies suing Napster and peer-to-peer file sharers, and then it was media companies such as Viacom, Universal Music Group, and Agence France Presse suiting Google, YouTube, and Facebook for distributing content whose rights they owned. Now GateHouse Media has filed suit against another newspaper firm, the New York Times Co., for publishing content from its websites and papers on

That media companies are suing each other is a sure sign of the maturation of online distribution and that money is starting to flow—albeit slowly and at levels far below that of traditional media, which still account for more than two-thirds of all consumer and advertiser expenditures

But the lawsuits really point out the weakness of revenue distribution for use of intellectual property online. In publishing, well-developed systems for trading rights and collecting payments exist. In radio, systems for tracking songs played and ensuring artists, composers, arrangers, and music…

Why Isn't Racing in Line for a bailout?

Let's see.  Thieves on Wall Street are getting $700 billion, apparently without having to make any promises at all on how they'll use the money. (Well, all right, they probably can't use it for lavish spa getaways, though they can pay out dividends, obscenely huge salaries and bonuses.)  And the auto companies, after three decades of making the wrong cars for the wrong market, are getting at least $14 billion to put off their inevitable trip to bankruptcy court.
So, why shouldn't racing get a piece of the pie? I'm really disappointed that Mitch McConnell, the Senator from racing (oops, make that Kentucky), hasn't yet made sure that his constituency gets its place at the trough.  Just in case ole Mitch is paying attention to what we say here, I've come up with a plan that'll hardly cost the government anything at all. In fact, we could do a very nice bailout package for well under $5 billion over a three-year period.  That's hardly a rounding error in…

Black Friday

We've been watching as handle has declined and sales receipts have fallen through the floor for the past few months.  But today seems to be when those ongoing causes caught up with racing in a way that none of us in the game could avoid noticing.
Not necessarily in chronological order: The Breeders Cup announced that it's canceling its national stakes program, which provided supplemental financing for 121 races around the country this year;Calder canceled three graded stakes from the current Tropical Park meeting and announced another cut in overnight purses;The Blood-Horse announced plans to lay off 10% of its staff; andThe Washington Post, formerly home of Andy Beyer, fired its racing reporter and will drop daily racing coverage.The elimination of the Breeders Cup National Stakes program probably has the biggest impact of today's events.  According to the Blood-Horse, Breeders Cup staff expects their revenue -- which comes primarily from stallion and foal nomination fees, …

Downturn Continues as Handle, Purses Drop

Unlike the 1930's, when racing was a relatively bright spot in an otherwise very dreary economy, thoroughbred racing in 2008 is not immune to the general economic malaise.
The latest figures from Equibase, reported yesterday in the San Diego Union-Tribune, show that nationwide handle was off 9.7% in November, compared to the same month last year, even though the total number of racing days at tracks across the country was up by more than 5%, from 440 in 2007 to 465 this year.
For the first 11 months of the year, through November 30th, total nationwide handle (on-track, at OTB's, and through ADW outlets) was down 6.17%, to $12.8 billion. purses were down 0.6% to $1.1 billion, and the number of race days was down 0.67%, to 5,764.
In some ways, these numbers are good news.  Most US industries are doing a lot worse than racing.  Auto sales, for example, are down 30-40% compared to last year, so perhaps we should be grateful that racing is down only in the single digits.  And for thos…

Why Won't Churchill Do the Right Thing?

Thanks to Terry Bjork on the Derby List for alerting me to how far Churchill Downs, Inc. and the Churchill horsemen are from agreement on sharing the revenue from internet betting.  As reported in the Louisville Courier-Journal, Churchill's last offer to the horsemen was to give 5.5% of internet (ADW) handle to purses, while at the same time eliminating any "source market" fees that would otherwise have gone to purses. (Don't ask me to explain source-market fees, but they compensate tracks for bets made online from locations near a track).
In contrast, the recent settlements with horsemen in California and Louisiana apparently give horsemen 7% of the internet/phone wagering handle, in a combination of source-market fees plus a percentage of the takeout.  That's in line with the goal set by the Thoroughbred Horsemen's Group for an equal one-third division of ADW revenue between tracks, ADW companies and purses.
Comparing Churchill's 5.5% offer to the 7% goal…