Take all Horse racing-related companies private

[NoCal Boy]

It is increasingly becoming clear to me that horse racing related companies should be privately-owned and not public companies. Churchill is probably the best example of how it simply can not work in this industry. The industry has to have parts that work together in some manner order to survive and hopefully grow. I can not blame Churchill for trying to suck out every ounce of profit on major events, but horse racing with its myriad of integrated and disjointed members simply is not conducive to it. Magna is a financial mess; Youbet is in hot water over their offshore subsidiary; and TVG is adamant about their exclusivity model, although there seems to be some softening there.

If Churchil was private, would they be nickle and diming the major events and creating the disruptive stir in account wagering in general right now?

If Youbet was private, would they ever have purchased IRG? As a private company, would TrackNet be concerned by Yopubet having all the content? Would maintaining yield on handle be that critical of a metric?

If TVG was not part of Gemstar, would they be more accommodating to opening up their signals for a fee?

If Magna was private...oh well, maybe they are all but private now given how MI Developments finances their operations.

But you get the picture. Perhaps Mr. D can take out Churchill. Private equity can take out Youbet and TVG and Stronach can take Magna private in some manner.

My guess is many of these racing and wagering issues go away with the major players tucked away in private hands. It is becoming quite clear to me that there are simply too many hands in the cookie jar with different agendas for publicly held companies to prosper in horse racing.

[betovernetcapper]

The one good thing about these guys being public is they have to file 8K reports when the government seizes their accounts. ;)

[kenwoodallpromos]

With 15 straight years of attendance and starts-per-horse decline, who do you have in mind to buy racing out to make a private profit?

[kenwoodallpromos]

This is the area I would like to own outright:
"2006 SALES RESULTS SOLD GROSS SALES AVERAGE
PRICE PERCENT CHANGE

2005-06 1996-06

--------------------------------------------------------------------------------

Weanlings 2,022 $100,723,243 $49,814 +13.9 +76.4
Yearlings 10,142 $579,176,596 $57,107 +4.0 +65.3
2-Year-Olds 3,107 $217,100,214 $69,875 +14.8 +75.3
Broodmares 4,709 $288,311,110 $61,226 +12.2 +90.5
___________________
I'd settle just for selling broodmares!!

[NoCal Boy]

A private company can operate in a manner that is not dependent on quarterly earnings reports and a stock price. A private company doe snot have the expenses involved with running a public company in terms of SarBox compliance.

I doubt Tracknet would be doing what they are doing if it was owned by two privately-held companies instead of two publicly-held companies. I also believe Youbet and TVG would operate differently if they were private. Just my opinion, but these relatively small companies spend millions on SEC compliance matters, among other areas, that are unnecessary if privately-held.

Business decisions that may take some months to materialize to the bottom line can be made instead of worrying about quarterly reports and a stock price.

The recent piece of Churchill Downs and the Breeders Cup is a good example. Would a privately-held Churchill be that concerned about the return from having a BC or would it do its best to make some profit on a major event like the BC knowing that some profit is better than none?

Youbet does not take some tracks because of yield concerns. TVG and TrackNet do not exchange signals due to pricing and related issues. But as priovately-held companies, would they all take the content even if some had much lower yields than othetrs since they would not have to report and be judged by yield numbers to the investing public?

[betovernetcapper]

But as priovately-held companies, would they all take the content even if some had much lower yields than othetrs since they would not have to report and be judged by yield numbers to the investing public?

Only in Narnia.

[richrosa]

With all of the government overreaching and legislation, I wouldn't wish public company status on my worst enemy, or even my competition. Thankfully, other ways have been created to monetize companies for the interest of its shareholders.

[vor99]

I whole heartedly agree that racetracks should not be part of a public company... however I do believe the best structure is that of a not for profit.

Horse racing is far too capital and labor intensive and there's very little profit for it's survival to be tied to a desired ROI from an investor.

IMHO the best managed tracks in both North America and indeed the world are all not for profits; i.e. Del Mar, Keeneland and even NYRA (is there a better track manager right now than Hayward, though the woeful period when Schwarz ran the place does cast a pall over their image).. likewise the OJC, under EP Taylor was indeed one of the finest operations in the world (Wilmot's Woodbine doesn't get my vote as one of the better run racetracks though). Outside of North America all the best tracks (save for those in Dubai) are operated by "clubs" and are essentially not for profits (the Hong Kong Jockey Club, Victorian Racing Club, Royal Ascot Racing Club etc....)