Showing posts from March, 2009


Journalists and technology writers are enamored with communications technology and tend to portray successful technologies as representing large scale trends. We are regularly presented with news stories and promotional materials about the rise of new technologies and about how their uses create social trend that are significantly altering society.

The release of the new iPhone was recently featured on network evening news, Blackberry has been heavily discussed because its use by Pres. Obama, and Twitter has been featured in numerous television and newspaper stories. The impression given by coverage is that anyone who doesn’t have an iPhone or Blackberry and anyone who doesn’t Twitter is out of touch with the mainstream and being left out of modern society.

These new means of communications offer interesting possibilities, but their consumption needs to be seen realistically. Blackberry, for example, has 14 million subscribers-- about 5 percent of all mobile phone users in the US. iPhon…


The Newspaper Revitalization Act introduced by Sen. Benjamin Cardin, D-Md., would permit newspapers to operate as not-for-profit entities under the tax code and is being heralded by some observers as a means of saving newspapers, much as was the Newspaper Preservation Act of 1970. Good purposes aside, it is useful to study the act to determine whether it will actually accomplish the goals that are stated as its rationale.

The bill is a small bill, about 435 words, that would amend the IRS Code of 1986 to permit newspapers to be given 501(c)(3) status, thus obtaining tax exempt status and the ability to accept charitable contributions. Currently tax laws do not permit newspapers to be operated tax exempt, but they do have mechanisms that permit foundations to own them or support them financially.

Paragraph (b)(1) of the bill would allow general circulation newspapers “publishing on a regular basis” to establish themselves as tax exempt organizations. The language does not limit periodici…

Magna Finally Faces Up to the Market

Probably figuring that its latest SEC filing would be thoroughly ignored amid all the focus on its bankruptcy, Magna Entertainment (MEC) filed a Form 8-K yesterday with the Securities and Exchange Commission in which it finally admitted that some of its race tracks and land holdings aren't worth anything like what Frank Stronach paid for them not all that long ago.
The 8-K, which is required whenever there is an event that materially affects a company's business, reports that on Monday MEC's audit committee approved a $136 million write-down in the value of the company's assets. In particular, the write-downs included the value of racing licenses for Lone Star Park in Texas, Golden Gate Fields in California, and the Maryland Jockey Club's tracks, Laurel and Pimlico. Other reductions in value were allocated to The Meadows harness track, to the now-shuttered operations at Portland Meadows and at Stronach's Austrian Racino, and to the value of land that MEC owns in…


Journalists keep raising the crescendo of the chorus that journalists are losing their jobs and journalism is suffering. They point to the fact that about 10 percent of journalists have disappeared from newspapers since the millennium when U.S. newsroom employment reached a peak of 56,373.

It is true that cutbacks are pandemic these days, and that these employment reductions hit close to home for journalists, but some context is usually useful when considering the numbers and their impact. Let’s take a look at the U.S. numbers.

The American Society of Newspaper Editors has conducted a newsroom employment census for 3 decades and it presents a telling story. According to the latest ASNE newsroom employment figures, there are 22 percent more journalists in newspapers than there were in 1977 (43,000 in 1977; 52,600 in 2007). Even granting employment losses of 2,000-4,000 since the last census, employment is still about 18 to 20 percent higher than it was in the 1970s. That doesn't seem…

Carolina Fuego Wins At Aqueduct

Most of what I write here focusses on the big picture in racing -- how Magna, Churchill or NYRA are doing, what's happening at the sales, what the economics of various niches in the racing industry are like.  But every once in a while it's fun to just celebrate being part of this great game.  Today was definitely one of those days.
My partnership operation, Castle Village Farm, had been pretty quiet over the winter. We'd retired a couple of horses, sent our better runners off for winter vacations, and had a couple of babies getting ready for their debuts.  And the there was Carolina Fuego.  We'd claimed her as a three-year-old back in June of 2007, and in 17 sytarts before today, she'd been in the money eight times, including a good second in the 2007 Delaware Certified Distaff Stakes. But she hadn't won for us, and the partners were, understandably, getting restless. In fact, back last summer, when her performance tailed off, we'd decided she needed a rest …


Judging from the continuing panicked commentary by big media journalists and commentators, newspapers are dead and dying. They are comatose, the family is gathering at the bedside, and quiet discussions are taking place about whether to disconnect them from life support.

Walter Isaacson writing in Time Magazine last week told us that “the crisis in journalism has reached meltdown proportions” and that we can save newspapers by starting to make micropayments for articles we read online.,8599,1877191-4,00.html

David Carr, writing in New York Times, this week tells us that a “digitally enabled free fall in ads and audience now has burly guys circling major daily newspapers with plywood and nail guns.” We need to start charging for news, forcing aggregators to pay, turn away from ad support, and start thinking about new ways of collaboration even if they require a new antitrust exemption.…

Mr. Stronach: Build Up That Wall!

For those too young too remember, or old enough to have forgotten, one of actor Ronald Reagan’s best lines as President, delivered on a visit to Berlin, was “Mr. Gorbachev, tear down that wall!” And when the Berlin Wall was indeed torn down – by ordinary Germans rather than by Mikhail Sergeyevich – Reagan’s credentials as an anti-Communist were assured.Frank Stronach seems to have learned something from Reagan as well.If nothing else, Magna Entertainment’s bankruptcy filing today was a remarkable exercise in tearing down walls, especially the walls that are supposed to exist between different corporations with different sets of shareholders.[The Magna bankruptcy has been dutifully, and reasonably well, covered by the racing press and by the leading newspapers in areas where Magna tracks are located.The best of the stories are collected at The Paulick Report and at Raceday 360, and quite a lot of detail is available on Magna Entertainment’s own web site.I’ll try not to repeat any more …

A Closer Look at the Calder Sale Numbers

Given the economic climate, the Calder sale of two-year-olds in training yesterday could have been worse, but for most of the pinhookers and other sellers, it was bad enough.The sale, always the most prestigious and most expensive juvenile auction, had a total of 272 horses in the catalog, the same number as last year.But final figures show a total of 111 horses sold for gross receipts of $25.2 million.  That's 25% off last year's gross, and, because more horses were reported sold than the 102 in 2008, the average and median price declined by more, 31.5% for the average and 34.8% for the median, compared to published 2008 results.Boyd Browning, CEO of auction company Fasig-Tipton,was quoted in the Blood-Horseas saying that the sale "wasn't as bad as my worst fears, and it wasn't as good as I'd hoped for." In fact, if you look critically at the numbers, it was a good deal worse than appears on the surface, bad as that appearance is. At least three factors …