Why Tracknet is in big trouble

[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?

[Kelso]

Originally Posted by NoCal Boy

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 understand that the fight is between the horsemen and the tracks ... and that neither of those groups can dictate terms to the ADWs? The horsemen are trying to reserve an enormous chunk of TRACK REVENUE for themselves. This has nothing at all to do with how much the ADWs PAY for signals.

All it will take to protect ALL of their revenue streams is for the tracks to hang together. Failing that, they will surely hang individually.

Try your feeble divide and conquer game elsewhere. Few will be fooled by it here.

Originally Posted by NoCal Boy

Do you really think the horsemen are just a bunch of idiots?

Yes, they have convinced me well beyond a reasonable doubt.

[Burls]

Originally Posted by Kelso

the horsemen and the tracks ... neither of those groups can dictate terms to the ADWs.

I don't see why not.
Unless certain ADWs have long-term contracts in place stipulating that they will pay a certain percentage of revenue for the track signal, Churchill/Magna could just tell the ADWs that the price for the signal has gone up.

Originally Posted by Kelso

The horsemen are trying to reserve an enormous chunk of TRACK REVENUE for themselves. This has nothing at all to do with how much the ADWs PAY for signals.

Not in and of itself.
But the Churchill management and the horsemen and might decide that they can find some middle ground more easily by squeezing more money out of the ADWs.

This could backfire, of course.
If enough ADWs decide that they aren't going to pay more for the signals, then Churchill will be in deep trouble.
They will have just lost a revenue stream that they can no longer get along without.
The horsemen there will suffer as well, of course.

[Valupix]

Even if track make money you still may never see the things you wish for in this game.

But that would at least open up a good possibility of seeing them happen someday.

You can be 100%, without the slightest doubt that nothing you or I or any party in this game wishes for will every come to be if track continue to lose money and/or struggle just to break even. It ain't gonna happen no matter which way you turn it. Profit = motivation, motivation = potential progress.

Wishing otherwise as the original post to this thread suggest is the equivalent of shooting yourself in the foot.

[DeanT]

Just remember that any cash they want to "squeeze" out of ADW's comes from one person's pocket, and one person only: the horseplayer.

[trigger]

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?

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.

[startngate]

Originally Posted by NoCal Boy

Care to disagree?

Yes. IMO you have put forth a scenario that will never happen.

Originally Posted by NoCal Boy

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.

If a deal is offered by the horsemen that those ADW's can accept, then TrackNet would be able to accept it too. Trigger is right, TrackNet could sign a terrible deal for their ADW's and force everyone else out. You seem to have forgotten that TrackNet's partners also own the racetracks, so they are keeping more than the "other" ADW's already. IMO that means there isn't a deal that the "other" ADW's can sign that TrackNet won't also be able to agree to. In fact, just the opposite is more likely true.

TVG is losing money without their "exclusive fees" from YouBet, who isn't exactly flush with profits either. And Ian will have to reduce his rebates to maintain whatever profitability he has. He certainly isn't going to be able to provide all the additional services (like streaming video) that others on this board keep asking him for unless he charges extra for them.

And forget about takeout reductions. Dean T (and others on this board) have mentioned this additional revenue the horsemen are seeking will keep that from happening.

Originally Posted by NoCal Boy

Do you really think the horsemen are just a bunch of idiots?

Yes, IMO they are, because they are asking for something they will never get, and are willing to shoot themselves in the foot (purse reductions) to try to make a point they have no chance of winning. They are alienating the tracks, and more importantly the customers. Not to mention, all the "little guys" among the horsemen are suffering the most because they get hit hardest by the purse reductions. Not smart.

The one thing that annoys me the most is that if you can believe the reports, TrackNet has already gotten the horsemen a lot more money for purses from raising host fees. Instead of saying thank you for that, the horsemen are saying "we know your business better than you do, and you didn't get us enough". Maybe there is more money to be had, or maybe not, but sitting down to see if there are still some areas for improvement on an outlet by outlet basis IMO would be the better way to go about this. Instead they are trying to throw a blanket over alll ADW's, of which each has its own business model that may require different terms and conditions to make work. Every business needs to have some expectation of turning a profit. If the math doesn't work then you go out of business.

Don't get me wrong, there is nothing about this situation that is good for us (the customers). I'm not much of a baseball fan any more since the player's strike in 1994. I'm already playing less since my favorite tracks aren't available, and expect that to continue if this doesn't get resolved soon.

[NoCal Boy]

Very sound arguments from all. I appreciate it. I am merely basing my thoughts on what we know to date. Tracknet has said that 1/3 of gross in not economically feasible, and I believe all ADW's feel the same way. Reports have also indicated Tracknet is only willing to give the THG an extra 1/4% to 4%. This means there is a difference of around 3% between Tracknet/ADW's and THG. Of course Tracknet could go ahead and agree to somthing very close to 1/3 of the gross and force TVG/Youbet and PRC to do the same. However, this runs counter to everything they have stated thus far. Churchill has even gone to lengths and sue the THG et al. Assuming Tracknet is true to its word, and assuming THG is willing to come down to a more reasonable number, then this matter essentially gets resolved with one of the major ADW's becoming willing to pay that price, be it 4.5%, 5.% or whatever.

I am a horseplayer. The vast majority on this board are horseplayers. While I am just as disturbed as to what is going on as others here, I also love to play the game and will continue to find tracks and races to play. I believe I am in the huge majority. Despite all the supposed problems in racing, if all ADW's and simulcast sites had acess to all tracks, the handles would increase over current levels. It will eventually come to that soon. How soon is the question.

Good handicapping today. My Youbet screen is full of tracks to play, as TVG and Twinspires are as well. I want this settled, but I am not going to allow this impasse to affect my enjpoyment in playing the ponies.

[Indulto]

What I don't understand is all the antipathy toward horsemen here after more than a YEAR of continuous complaining about CDI, MEC, DragNet, Evans, Stronach, and Daruty.

So you can't place a bet while somebody takes these guys on with a discipline you can't muster without some industry marketing mouthpiece holding your hand. Too bad!

If you really want the changes to the industry that I've been reading here for the last 2.5 years, then you should support the horsemen and then follow their example to achieve what you want.

Evans comes off as a malevolent despot and Stronach an emporer in need of clothes. Daruty is seldom quoted in other than vague generalities while nothing good has happened for horseplayers outside of CA since he appeared on the scene. And that was in spite of his efforts, not because of them.

The Eight Belles tragedy isn't the only straw breaking the camel's back. It will take a revolution to straighten this game out and we've just witnessed the Louisville Tea Party.

[alydar]

Originally Posted by Indulto

What I don't understand is all the antipathy toward horsemen here after more than a YEAR of continuous complaining about CDI, MEC, DragNet, Evans, Stronach, and Daruty.

So you can't place a bet while somebody takes these guys on with a discipline you can't muster without some industry marketing mouthpiece holding your hand. Too bad!

If you really want the changes to the industry that I've been reading here for the last 2.5 years, then you should support the horsemen and then follow their example to achieve what you want.

Evans comes off as a malevolent despot and Stronach an emporer in need of clothes. Daruty is seldom quoted in other than vague generalities while nothing good has happened for horseplayers outside of CA since he appeared on the scene. And that was in spite of his efforts, not because of them.

The Eight Belles tragedy isn't the only straw breaking the camel's back. It will take a revolution to straighten this game out and we've just witnessed the Louisville Tea Party.

Very well put.

[cj]

Originally Posted by Indulto

What I don't understand is all the antipathy toward horsemen here after more than a YEAR of continuous complaining about CDI, MEC, DragNet, Evans, Stronach, and Daruty.

So you can't place a bet while somebody takes these guys on with a discipline you can't muster without some industry marketing mouthpiece holding your hand. Too bad!
If you really want the changes to the industry that I've been reading here for the last 2.5 years, then you should support the horsemen and then follow their example to achieve what you want.

Evans comes off as a malevolent despot and Stronach an emporer in need of clothes. Daruty is seldom quoted in other than vague generalities while nothing good has happened for horseplayers outside of CA since he appeared on the scene. And that was in spite of his efforts, not because of them.

The Eight Belles tragedy isn't the only straw breaking the camel's back. It will take a revolution to straighten this game out and we've just witnessed the Louisville Tea Party.

I think the reason is that the plan the horsemen want will do absolutely nothing to help the bettor, and could even hinder any bettor friendly changes in the future. At least with the status quo, there is an opportunity for the bettors, as PTC demonstrates, to get a break. The more you give horsemen, the less there is for us. What do you think the horsemen winning will gain for the horseplayer?

[Indulto]

Originally Posted by cj

I think the reason is that the plan the horsemen want will do absolutely nothing to help the bettor, and could even hinder any bettor friendly changes in the future. At least with the status quo, there is an opportunity for the bettors, as PTC demonstrates, to get a break. The more you give horsemen, the less there is for us. What do you think the horsemen winning will gain for the horseplayer?

Why should we expect the horsemen to gain anything for the players other than an opportunity to see that track management is not all-powerful? In fact we have the power to end that stalemate in our favor simply by not betting. Do you really think any future bettor-friendly changes would be forthcoming without collective action on the part of horseplayers?

In the wake of the wake-up call at CD on Derby Day, we finally have the focus of the world on us. What better time to organize?

[cj]

You shouldn't answer a question with several questions.

It is kind of comical you suggest not betting. When I mentioned that very thing for the Derby, you were unwilling to do so. I agree we need to organize, but that has nothing to do with the current power struggle. There is no incentive for me, as a bettor, to support the horsemen any more than there is to support track management. What am I missing?

[Premier Turf Club]

Originally Posted by Indulto

Do you really think any future bettor-friendly changes would be forthcoming without collective action on the part of horseplayers?

I can only speak for PTC, but we're always working on bettor-friendly changes. Joe and I put a lot of money through the windows every year and we were horseplayers for decades before we ever had anything to do with an ADW.

[cj]

Originally Posted by Premier Turf Club

I can only speak for PTC, but we're always working on bettor-friendly changes. Joe and I put a lot of money through the windows every year and we were horseplayers for decades before we ever had anything to do with an ADW.

How would the horsemen's proposal affect PTC?