Magna-Churchill story

[andicap]

For bettor or for worse here's a link to my story about the CDI-Magna joint venture.
Any mistakes or dumb comments, just blame my editor :D


http://multichannel.com/article/CA6423190.html

[rrbauer]

I liked your article. To me the operative speculation right now is what happens to TVG's exclusive with the NYRA tracks that expires the end of this year. They lose NYRA and their talking heads will be seeking face time on some other venue.

[JustRalph]

They lose NYRA and their talking heads will be seeking face time on some other venue.

They already do that. They go on auditions all the time..........

The guy who hosts the bachelor started on TVG

[andicap]

I liked your article. To me the operative speculation right now is what happens to TVG's exclusive with the NYRA tracks that expires the end of this year. They lose NYRA and their talking heads will be seeking face time on some other venue.

Unfortunately, I could not get NYRA on the phone by press time. (They did call back just after my deadline closed and were very apologetic about it. With the huge bankruptcy hearing coming up shortly they are pretty busy.)

Suffice to say you are right on the money.
Even if NYRA wins a franchise renewal it is not certainty they will remain with TVG. The contract with TVG ends the day NYRA's does with the state.

There are all kinds of issues between TVG and the tracks, NYRA included, that need to be sorted out. NYRA wants to start its own Internet betting hub, much as CD has. More and more tracks are seeing TVG as a hurdle to their plans -- with its web exclusivity -- and Magna is using these conflicts to get the tracks onto its side.

TVG will have to change its policies -- to give somewhat -- or else face the music. I suspect they know that and will come back with a plan to save NYRA.

[bigmack]

To me the operative speculation right now is what happens to TVG's exclusive with the NYRA tracks that expires the end of this year. They lose NYRA and their talking heads will be seeking face time on some other venue.

This is precisely the type of innuendo crap that isn't needed at this board. If you have solid info, lay it on....otherwise keep the playground stuff to yourself.

Hey, that quote of yours plays well here - Thanks. Is operative speculation the same as innuendo?

[GoBabyGo]

For bettor or for worse here's a link to my story about the CDI-Magna joint venture.
Any mistakes or dumb comments, just blame my editor :D


I think this has antitrust lawsuit written all over it. I don't think they are going to deal fairly with anyone.

I would be interested in hearing from Premier Turf Club to see what, if anything has been said to them about when they will get signals.

[Premier Turf Club]

I think this has antitrust lawsuit written all over it. I don't think they are going to deal fairly with anyone.

I would be interested in hearing from Premier Turf Club to see what, if anything has been said to them about when they will get signals.

Having had a few conversations with them, I don't think it looks good right now for anyone. It certainly seems like they are going to do everything they can to squeeze out all their competitors. Yeah, I know what they say publicly. Maximum distribution, we'll deal with everyone, etc. I can tell you privately their position is a 180 degrees different.

I guess we'll all do what we have to do.

[linrom1]

For bettor or for worse here's a link to my story about the CDI-Magna joint venture.
Any mistakes or dumb comments, just blame my editor :D


http://multichannel.com/article/CA6423190.html

I am rather surprised about TVG's cautious internal policy about accepting bets from only 12 states that expressly allow online wagering and not from those that are silent on this issue. It is obvious that they can easily make up any loss due to CDI alliance with Magna by expanding their wagering base.

It makes me wonder why their legal council would advise them against expanding to more states?

[andicap]

I am rather surprised about TVG's cautious internal policy about accepting bets from only 12 states that expressly allow online wagering and not from those that are silent on this issue. It is obvious that they can easily make up any loss due to CDI alliance with Magna by expanding their wagering base.

It makes me wonder why their legal council would advise them against expanding to more states?

There has been opinions from attorneys general in some states stating that it was illegal to take bets from those states. TVG is playing it more conservative in fear of stirring up anti-gambling sentiment. Some cable operators were hesitant to sign up TVG for fear of seeming to endorse or promote gambling. By playing it safe TVG is trying to reassure cable operators that it will bend over backward to play by the rules.

[andicap]

Having had a few conversations with them, I don't think it looks good right now for anyone. It certainly seems like they are going to do everything they can to squeeze out all their competitors. Yeah, I know what they say publicly. Maximum distribution, we'll deal with everyone, etc. I can tell you privately their position is a 180 degrees different.

I guess we'll all do what we have to do.

I would tend to agree with you and would probably say so in any kind of op-ed piece or column if I ever get the opportunity. Whenever I see someone say in a press release or press conference that they are promoting "openness," it almost always means to keep an eye on your wallet or get a good attorney.

I think the last thing these companies want is an entity like yours to succeed because no one wants to have to seriously get into the rebate game. NYRA's plan is a start but it has faced all kinds of obstacles and is really geared the very big players. Instead tracks and third-party companies use chintzy "player rewards," that are in the vein of credit card companies -- roughly a 1%-3% value. Some are even worse. And who wants golf clubs. Give me cash.

One problem for tracks is that one racing insider told me that the really big players are still finding ways to finance off-shore accounts and the tracks are not getting these "whales" back. They are however getting the small to medium player who doesn't want to deal with the hassle of putting money into the off-shore books or the problems of getting their cash out.

Bottom line: The tracks are pretty mad that they have been forced to accept just 3% for their signal for years (their own fault) so they are firing a shot over the bow of the third-party companies: Enough is enough; we want a bigger piece.

The tracks want to eventually force the the TVGs, BRIS' and Youbet's out of business and make people signup for twinspires.com or xpressbet.com With on-track betting handle a permanent disaster, why give up a chunk of your handle to a third-party?

[garyoz]

I think this has antitrust lawsuit written all over it. .

There is no antitrust issue here. They are the content providers (e.g., they own the racing signal)--just like Comcast owning the Flyers or MSG owning the Knicks, they are distributing their own product as they choose--in the case of Magna and CDSN through a video service they own. Plus in this case, making it available for wagering as they see fit. There is no restraint of trade. Go to your local track or OTB and wager on the simulcast if you choose not to bet on the Internet sites. They can even choose not to make a signal available in your area--they own the content.

The government can't be telling business where and how to do business unless there is evidence of market failure (e.g. supranormal profits). Antitrust laws (restraint of trade) due to vertical integration have precise definitions of the relevant product and geographic markets. You are being far too narrow in trying to apply it in this case.

The fact is TVG appears to be a middleman in a market that doesn't need one. Wonder what the implications are for AmericaTab (Brisbet & WinTicket)? Can't be good--but the last time Magna cutoff YouBet and AmericaTab the player boycott helped force them to change. But IMHO I think the writing is on the wall.

[Premier Turf Club]

Andicap,

You make a number of good points, and obviously have a grasp of the situation. The only thing you said I'd disagree with are signal fees. Everyone should lose that notion of 3% fees. The ONLY tracks at 3% are the really
small throughbred tracks (think Will Rogers Downs, Fargo Horsepark). I'd say the average fee to an ADW now is 4-5% and the premium signals are much more than that(as high as 10% for certain days). Believe it or not, some of the dog tracks are as high as 7%.

[Indulto]

If TVG has an exclusive agreement with the NYRA through the end of 2007, how does LG now -- and how would PTC in the near future -- get the NYRA signal at a price that leaves room for rebates?

[Valuist]

I think this has antitrust lawsuit written all over it. I don't think they are going to deal fairly with anyone.

I would be interested in hearing from Premier Turf Club to see what, if anything has been said to them about when they will get signals.

I was wondering the same thing. When you take the two biggest players in the industry and join forces, one wonders what it will do for competitive balance.

I've ripped TVG as much as anyone but I really don't want to see them go out of business. Their production is very good; my only problem w/them is their philosophy of trying to make stars out of the hosts, and shoving selections down viewers throats.

TVG can claim losing CDI isn't big; who are they kidding. Let's face it; there's three prime tracks when it comes to wagering dollars: Saratoga, Gulfstream and Churchill. You can maybe argue Dmr and SA but they don't have the field sizes the others have. And lets not forget the ancillary effect of losing tracks like AP, FG and Crc. It may not matter if NYRA goes exclusive w/TVG. It might be too late.

[Premier Turf Club]

If TVG has an exclusive agreement with the NYRA through the end of 2007, how does LG now -- and how would PTC in the near future -- get the NYRA signal at a price that leaves room for rebates?

As I understand it, TVG has exclusives only in the 12 states it takes wagers.

California, Idaho, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, New Mexico, North Dakota, Ohio, Oregon and Wyoming.


Obviously California is a big one, and its tough to make any money there rebating. Kentucky is a clear cut 2nd. Other than that, I don't see any deal breakers. We're in this position now with other TVG tracks we have, Turway, Turf Paradise and Los Alamitos.

[andicap]

TVG can claim losing CDI isn't big; who are they kidding. Let's face it; there's three prime tracks when it comes to wagering dollars: Saratoga, Gulfstream and Churchill. You can maybe argue Dmr and SA but they don't have the field sizes the others have. And lets not forget the ancillary effect of losing tracks like AP, FG and Crc. It may not matter if NYRA goes exclusive w/TVG. It might be too late.

It hurts but not as much as you think on a purely racing level. (psychologically it's a disaster and more importantly what it portends for the future. That's the big blow.) But NYRA does get Monmouth this summer and if you examine the exclusives of HRTV and TVG, the latter still shines outside of the winter with NY, Calif, Keeneland, NJ.

Even when they lose AP and CRC, TVG will still have much better tracks. They will be about even tho on quantity (as least as far as the major daytime tracks are concerned. I haven't charted the minor, nighttime tracks.)

I did a full comparison in reporting the story but the document is on my laptop which is in the shop.

[Premier Turf Club]

I would tend to agree with you and would probably say so in any kind of op-ed piece or column if I ever get the opportunity. Whenever I see someone say in a press release or press conference that they are promoting "openness," it almost always means to keep an eye on your wallet or get a good attorney.

We've done all we can to work with Magna and Churchill both separately, and as TrackNet. When we've reached the point where we don't believe there is anything that can be resolved between us, we'll let the lawyers and the courts take a crack at it.

I thought going into this venture that we'd have a chance to change the industry, but not like this.

[JustRalph]

I thought going into this venture that we'd have a chance to change the industry, but not like this.

I have heard this somewhere before......... oh yeah, anybody who thinks with a modern frame of mind.............get in line

[JimG]

As I understand it, TVG has exclusives only in the 12 states it takes wagers.

California, Idaho, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, New Mexico, North Dakota, Ohio, Oregon and Wyoming.


Not sure what you mean by the above. TVG takes wagers from VA, but it is not the only account wagering company authorized in the state. CNL and AmericanTab are also authorized by the racing commission. Last I heard YouBet was heading to arbitration with the Horseman's Association here.

Jim

[Premier Turf Club]

Not sure what you mean by the above. TVG takes wagers from VA, but it is not the only account wagering company authorized in the state. CNL and AmericanTab are also authorized by the racing commission. Last I heard YouBet was heading to arbitration with the Horseman's Association here. Jim

What I mean is that in the simulcast contracts we've seen, we're precluded from taking wagers in those 12 states. It is specifically spelled out.

[PaceAdvantage]

PS. Andy, thanks for using the poll and plugging the site in your article...

[bigmack]

I feel so cheap and used being a participant in a poll that was set-up to write an article. :rolleyes:

[andicap]

I feel so cheap and used being a participant in a poll that was set-up to write an article. :rolleyes:

Was this meant tongue-in-cheek?

If you meant it, I have to say I ran the poll WEEKS before I got the assignment to write the article. It was just a happy coincidence that it happened that way. I actually had to research and write the story in about two days, starting on March 5. I posted the poll on Jan. 27 fer chrissakes.

I started the poll to use as a potential weapon to convince Cablevision to add HRTV. If I can find enough Cablevision subscribers to start a petition I would do just that.
Trouble is CVC would get no money from HRTV and it probably feels adding that channel won't get more customers because any racing fan would already be subscribing to TVG. And the Dolans who own CVC have close ties to NYRA and its a natural they would prefer running the channel with the local racing (especially now with NYRA, Monmouth and Meadowlands.) .

And yes, I'm sure PA HATED the publicity.

(Thanks PA for noticing the plug.)

And if you felt "used," it was for a good cause -- to demonstrate to the cable TV industry there is widespread support among horseplayers to pay for a racing channel. That it's a small niche, but one that talks with its wallet.