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Originally Posted by NoCal Boy
Churchill/Tracknet seems very willing to wait out the horsemen. The question remains what happens if the horsemen drop their demands to something like 5.5% of takeout instead of the 1/3 of gross which is more like 7%? Tracknet is at 4% from all accounts.
If Youbet, TVG and PTC all agree to give the horsemen 5.5% of the takeout, but Tracknet holds firm at 4%, the Tracknet ADW's will crumble due to lack of content.
Do you really think the horsemen are just a bunch of idiots? Don't you think the horsemen have attorneys and financial consultants advising them as well? Churchill made sure of the attorneys by suing them. All it will take is for Youbet and TVG to agree to some reasonable number in between the 1/3 of gross and the 4% offered by Tracknet, and Tracknet is in a major bind. Either agree to the THG deal and open up signals at the agreed upon purse rate, or crumble as ADW's with little content and virtually no content that is not also offered by other major ADW's.
How long do you think Twinspires and Xpressbet will last if Youbet and TVG have all the independent tracks except for Churchill/Magna non-CA tracks, while Tracknet's ADW's will have just a few of those same tracks and virtually none of the Churchill/Magna tracks?
This whole THG matter is actually out of the effective control of Churchill/Tracknet. All it will take is a deal between THG and TVG/Youbet and it is over for Tracknet unless they agree to the same deal and open up their signals. And then Youbet and TVG will dominate TS and XB as they did even in Q1 when the "content advantaage" was all in favor of Tracknet.
Care to disagree?
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A couple of comments:
There is no evidence at what rate the other ADWs can make a profit and whether it is higher or lower than TNs, so your whole argument , at this point, is pure speculation.
One could just as easily argue that TN could negotiate a rate with THG that would be low enough to "close out" the other ADWs .
And, remember, unlike the past, when accepting low rates at "premium" tracks as "lost leaders" in order to generate traffic to an ADW site (as Youbet did in the past as a "partner" of TVG) was an acceptable business practice for ADWs, the results of the THG negotiations with TN will probably establish the prevailing rates for the majority of NA thoroughbred tracks that all ADWs will have to live with.
