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Showing posts from August, 2009

Inside the Inner Sanctum

This past Sunday, I attended my first Jockey Club Round Table, the annual event hosted by the racing world's aristocracy in Saratoga. By now, most of those interested in racing will have seen the press reports on the Round Table (here, for example), all of which focused on the call by Louis Romanet of France for the US to join the rest of the so-called civilized world and ban Lasix, at least in the more important stakes races.
But the bulk of the Round Table actually concentrated on less contentious issues: the necessary changes that need to be made to ensure a level, drug-free (except, of course, for Lasix) playing field, safer race tracks, and the assurance of retirement homes for horses once their racing careers are done. All these initiatives are necessary, minimum requirements to restore a little bit of public confidence in racing, and it's a good thing that the Jockey Club can use the influence of the 100 grandees who are its members to pull together industry initiatives,…

THE TRANSACTION COST PROBLEM OF NEWSPAPER MICROPAYMENTS

The desire to monetize online news is leading some to enthusiastically promote micropayment systems. A number of the leading newspaper sites are leaning toward a cooperative payment system that will allow readers to use a single account to access material at the leading papers. Such a system will not be technically difficult to implement, but getting the price right will be a significant challenge because of transaction costs and significant differences in the economic value of articles.

To create the best industry wide effects, a micropayment payment system would need to include as many papers as possible (see "The Challenges of Online News Micropayments and Subscriptions" http://themediabusiness.blogspot.com/2009/05/challenges-of-online-news-micropayments.html). The fact that a consortium is currently being sought only among the major players illustrates, however, that such a system would be cost inefficient because content from smaller papers would attract fewer transactio…

GOOGLE SETTLEMENT STEALS RIGHTS AND REWARDS APPROPRIATION

I received another letter from the Google Book Search Settlement Administrator this week informing me that my rights will be affected by the proposed settlement of the class action suit against Google for copyright infringement by scanning books and other publications. I have been a de facto part of the class action lawsuit because I am the author of numerous books, chapters, and other publications affected by Google’s decisions to scan and sell copies of materials still protected by copyright.

The settlement has been supported by the Association of American Publishers—which represents major publishers—because it protects their interests, but it is opposed by the National Writers Union and the American Society of Journalists and Authors because it seriously degrades the rights and interests of those who actually write the content. The split between publishers and authors is not surprising because anyone who has observed the uneasy relationships between musicians, authors, scriptwriters…

Gotcha

Thanks to my friend Jeff Seder, of EQB, Inc., for bringing this to my attention:
The judge in the Magna Entertainment bankruptcy case has ruled that Magna Entertainment's creditors (which includes just about everybody in the racing industry) can pursue claims not only against Magna Entertainment itself, but also against its chairman, Frank Stronach, and against the Stronach-controlled company, MI Developments, that was the nominal parent of Magna Entertainment. The full story is here.
As readers of this blog already know, Magna Entertainment, which holds such major league racing properties as Santa Anita, Gulfstream, Laurel and Pimlico, filed for bankruptcy some months ago. For years, Magna Entertainment was propped up by a series of loans and equity ifusions from MI Developments (MID), often over the protests of minority shareholders in MID, who rightly accused Stronach of using that company to toss good money after bad to support Stronach's dreams of a thoroughbred racing em…

Behind the Numbers at the Saratoga Sale

As everyone knows by now, the recently completed Fasig-Tipton select yearling sale at Saratoga was a welcome change from the past year's pattern of steady declines at all thoroughbred sales. The Saratoga sale's gross proceeds were $52,549,500, for 160 horses reported as sold, compared with $41,082,000 for 142 sold last year. The average and median prices, as already reported, were also up substantially.
A closer look at the details of this year's Saratoga sale, though, casts some doubt on the upbeat message that Fasig-Tipton and industry insiders tried to carry away from the sale. The following are only a few of the factors that suggest the market for thoroughbreds has a long way to go before it reaches bottom.
1. The Influence of Sheikh Mohammed
The Fasig-Tipton auction house was recently purchased by Synergy Investments Ltd., a Dubai-based company about which it's almost impossible to discover anything (see my report earlier this year). One presumes that the purchaser …

JOURNALISM STARTUPS ARE HELPFUL, BUT NO PANACEA FOR NEWS PROBLEMS

One of the most exciting developments in journalism is the widespread appearance of online news startups. These are taking a variety of not-for-profit and commercial forms and are typically designed to provide reporting of under-covered communities and neighborhoods or to cover topics or employ journalistic techniques that have been reduced in traditional media because of their expense.

These initiatives should be lauded and supported. However, we have to be careful that the optimism and idealism surrounding these efforts not be imbued with naïveté and unbridled expectation. All these initiatives face significant challenges that require pragmatism in their organization and sober reflection about their potential to solve the fundamental problems in the news industry today.

We need to recognize that these online initiatives are not without precedent. We can learn a great deal about their potential from other community- and public affairs-oriented media endeavors. Community radio, local pu…

OMG! NEWSPAPERS MAY NOT BE DEAD!

Success in businesses is not the result of highly mysterious factors.

To be successful an enterprise must offer a product or service that people want; it must provide it with better quality and service than other providers—or at a lower price than competitors; it must change with the times and demand; and it must never forget to focus on customer needs rather than its own. And a limited number of competitors helps. Duh.

Many journalists have trouble understanding these principles, however, and we were treated to 2 classic stories in which journalists breathlessly announced this discovery over the weekend.

The New York Times told us about the “resurgent” Seattle Times. The Times is starting to reap the fruits of monopoly caused by the demise of the print edition of the Post-Intelligencer and the stabilizing economy. It has picked up most of the print readers from the P-I, raised its circulation prices, and been able to keep the higher ad rates that were charged when ads were put in both p…

Pinhookers' Bloodbath

The Saratoga yearling sale starts Monday, and the big Keeneland sale, which determines the fate of a large number of thoroughbred breeders, is barely a month away. For the past two decades, an important factor in those yearling sales, has been the activity of "pinhookers," seeking to buy yearlings for resale. The July issue of the Blood-Horse Market Watch, a pricy industry newsletter, contains what is, to me at least, a shocking but unsurprising report detailing the economic disaster that has befallen pinhookers this year. If one needed any more proof that our industry is going through a major restructuring, this is surely the smoking gun.
Pinhookers (see a definition here) in the thoroughbred industry buy yearlings at the summer and fall sales, then try to sell the horses as two-year-olds, especially at the so-called "select" two-year-old sales (Fasig-Tipton Calder in February, Ocala Breeders Sales Co. in February and March, Barrett's in California in March, an…

Some Single-Payer Ideas for Racing

President Obama and the Congressional Democrats may have backed off the single-payer concept for health care, but that doesn't mean it's a bad idea. In fact, the single-payer concept could be very useful indeed in a restructured racing industry. In particular, the single-payer concept would work well in three different parts of the racing game: (1) simulcasting; (2) workers' compensation insurance, and (3) health care for backstretch workers. Let's take a look at how this might work.
First, a quick definition of single-payer systems. It's just what it sounds like: one entity pays all the costs (and sometimes provides all the services) in a defined economic area. In the US, the great successful example is Medicare. For those of us 65 and over, it's a wonderfully simple system: you go to the doctor or hospital, the government pays the bill, minus a very small deductible. Most other industrial countries use the same approach to health care for their whole popula…