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Tuesday, April 24, 2007

TrackNet Media Putting the Squeeze on ADW's

- The impasse between Youbet and the Churchill/Magna owned TrackNet Media has now spilled into public. Seems that TrackNet is insisting that Youbet give up its TVG exclusive tracks in order to be able to carry the Derby, and Churchill/Magna tracks going forward. American TAB has already agreed to those terms.

“We had to make a decision,” AmericaTAB general manager Mike Weiss said....“We had negotiations with TVG, but they weren’t successful. We also negotiated with TrackNet Media and had to decide which way to go.” [Bloodhorse]
But Youbet is refusing to go along, and issued a blistering statement.
"Instead of the broader, more inclusive distribution formula the industry has been promised, TrackNet presented us with an unreasonable either-or scenario,” said Champion. “To carry this year’s Kentucky Derby and its other content, TrackNet wants us to forego races from, among others, Aqueduct, Belmont, Saratoga, Del Mar, Keeneland, Oak Tree at Santa Anita, Saratoga Harness, Turfway Park, Turf Paradise, and Los Alamitos. It ought to be obvious to everyone with a major investment in horse racing that we should not have to choose one content group over another when we are prepared to pay fair prices for both.

“Under these circumstances, we think the industry needs to assess the ramifications of the two most dominant content providers in our business coming together to dictate content alignment and economics by forcing choices on us and others that are sure to limit competition, thwart innovation, frustrate customers and stifle growth.” [Bloodhorse]
Youbet is reacting to TrackNet's stated goal to facilitate the broad distribution of horse racing content through trusted and reliable distribution platforms that share TrackNet’s philosophy that non-exclusivity of wagering content is vital to the future growth of domestic account wagering. [Churchill Downs press release] TrackNet Media, responding in a statement to Youbet's, declared that the abovementioned goal is exactly what they are trying to achieve here. Noting that they are in discussions with TVG to facilitate cross-licensing of their signals, TrackNet stated:
Youbet is the only large national ADW provider with a sublicense agreement in place allowing it to accept wagers on the TVG exclusive content on a going-forward basis. Youbet now seeks the right to accept wagers on TrackNet Media content as well – leaving Youbet as the only national provider able to offer its customers all major U.S. racing content. Such an arrangement would put all of Youbet’s competitors, including TVG, AmericaTAB, XpressBet and the yet-to-launch TwinSpires account-wagering service at a disadvantage, and it would unfairly penalize customers of those ADW platforms who want access to a broad range of content.
Well gee, isn't it nice of TrackNet to be SO freaking concerned about what's fair for Youbet's competitors! Excuse me for the skepticism, but this old-line liberal is naturally inclined towards the belief that bottom-line oriented public companies such as Magna and Churchill are concerned with just that, first and foremost, and that any stated altruism is to be viewed with doubt. Perhaps I'm wrong in this case, and maybe in the end we will indeed have a wide choice of wagering platforms with no restrictions on content. But in any event, the two companies are obviously using their combined clout and the hammer of the Kentucky Derby to shape the ADW industry into what their idea of what the landscape should be. I find the idea of this single entity being able to exercise this kind of control to be disconcerting.

And that's now. What happens if Empire gets the New York franchise? Their proposal states that New York's racing signal will then be turned over to TrackNet Media, and they would then have Saratoga and the entire Triple Crown series under their control. This is why Assemblyman Gary Pretlow raised possible anti-trust issues regarding Empire in the franchise hearings. Perhaps it's not only those of us in New York who are concerned about Empire's takeout increases and their highly questionable integrity who should be worried about them being awarded the racing franchise.

- Please bear with me for a couple more days, as I finish up the Keeneland meet for the Special; and I'll then be back with my usual copious posting.

3 Comments:

Lenny said...

As far as I am concerned I hope that Tracknet can reel in all of the major tracks. I use Xpressbet when I can not get to the track because it offers no per wager fees, no monthly fees and no fees to view live video. I stopped using Youbet when they began charging monthly fees and I only used TVG once or twice because they charge per wager fees.

As long as Tracknet keeps the same no fee structure I am all for them. Takeout is bad enough, why should I have to pay extra fees on top of it? You also have to think about how much money is "leaking" out of the system with all of the non-track owning ADW's. Tracknet is focused on getting the money back to the tracks and horse owners, where it belongs, not into the pockets of overpaid executives.

I can not feel sorry for Youbet or TVG or any other ADW that charges its customers fees on top of the already outrageous takeout. The only players that benefit are those that wager large amounts of money each month. They get exemption from the fees while the $2 bettor gets the shaft.

Lenny

Anonymous said...

This is a joke; right? Tracknet going to return money to us (horsemen). Not likely. These are publicly trading companies. I am sure the shareholders of these leaky ships will allow one dime out of the corporate coffers. Tracknet like everything else MEC has ever done is about POWER. It has been their mantra and subsequent downfall from day one. Speaking of downfall it will be exactly that for Empire Racing. There will be no license to any entity with Restraint of Trade and Anti-Trust litigation pending. Watch the news in the next 48 hrs. I cant help but wonder what the other 74% owners of Empire are thinking right now. Rediculous! Oh yeah, what happens to Xpressbet and Twinspires next fall come Breeders Cup Day? What goes around......Only people really hurt by this are the players. Shame on them!

AJ said...

OT, but does anyone have a handicapping angle on foaling dates (and if you did, why tell me?!)

Just perusing some for this year's Derby runners, Nobiz was foaled in January, and SS in February - while Hard Spun and Scat will still be technically 2-year olds when the Derby is run (foaled May 10th and 11th respectively).

I'm sure there's info on this somwhere, but I was wondering about the Derby records of late foals, or if late foals improve or regress in the Derby off their previous races.