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Wednesday, April 27, 2011

The Thoroughbred Extortion

Hold off breaking out the champagne bottles to a Meadowlands lease.  The thoroughbred industry is about to to attempt to throw a bomb into the Meadowlands lease over simulcasting dollars.  As reported by Harness Racing Update, the thoroughbred horsemen are threatening to pull their thoroughbred signal (and alluding to having other thoroughbred tracks pull their signal from the Meadowlands) over their demand to get simulcasting revenue from the Meadowlands.  As Harness Racing Update reports, traditionally when the NJSEA ran both tracks, the bred racing got the money raised in simulcasting; as a result the standardbreds got 2/3rds of the simulcasting handle.  Even though the runners were not at the Meadowlands last year, they were given their typical percentage because the two tracks were owned by the NJSEA.  This year, it's a whole new game and Jeff Gural is not willing to play the NJTHA's game.  Yes, 80% of the simulcast handle is on the runners, but with 2/3rds of the horses racing in New Jersey standardbreds, they make up a bigger component of the state equine economic engine.

Well, my first suggestion to the NJTHA is to stop threatening to pull all thoroughbred signals from the Meadowlands, that is unless you wish to be subject to anti-trust violations.  What we are seeing here is an attempt to extort from the Meadowlands as the Maryland Jockey Club (MJC) did to Rosecroft Raceway which forced them into bankruptcy.  Yes, you have the right to pull Monmouth's signal from any Meadowlands operated facility as the harness horsemen have the right to pull their signal from any Monmouth Park operated facility but under current law, it is clear how the purses are to be divided.  Secondly, tell me which out of state thoroughbred track is going to want to keep their signal out of the nation's number one simulcasting center long term and deny themselves the purse money that would be coming their way?  And let's face it, pulling Monmouth's signal out of the Meadowlands will be suicidal for Monmouth as well.

As for the NJTHA's threat they were not given the chance to bid for the contract, I covered that yesterday, but for those that missed it, let me summarize.  If not an emergency situation a RFP would have been issued for the Meadowlands and it would have included a line requiring the facility be used to conduct a standardbred meet of at least 141 days, the same terms (replacing the breed) of the RFP for Monmouth.  I tend to doubt the NJTHA would have been bidding on such a RFP.

Let's face it, it is all about the New Jersey thoroughbred industry now feeling secure about itself, trying to screw the standardbred industry in New Jersey as the thoroughbred industry attempted to do in Minnesota, as they attempted to do in Iowa (also attempting to screw the quarter horse industry) and as was done in Maryland.  We play nice in the sand box when necessary and once the runners feel confident out come the knives to stab in the back of the other breeds (Unless things are different in Canada, this is one of the reasons why I can and never will understand Standardbred Canada's willingness to promote thoroughbred racing on their website.).

The problem is the days of long race meets are over.  Granted, I am not a follower of thoroughbred racing, but name one thoroughbred racetrack which runs long race meets without a racino that has survived?  The only one I am aware of is NYRA and they have only avoided bankruptcy twice with the state bailing them out.  The future of racing, of all breeds is smaller boutique meets.  The NJTHA has to recognize 141 days of inferior racing is going to be greeted with a yawn on track, and a yawn off track.  The standardbred industry in New Jersey has reluctantly recognized this and is cutting their harness meets down to 75-80 days and that is without a subsidy.

The problem is New Jersey bred thoroughbreds are inferior to many other state breds and they know without having a 141 day meet, they can't financially make it.  They only agreed to a shorter meet last year because they received subsidies not only from the casinos, but ironically the standardbred industry. The NJ Breds were able to be financially profitable only because they were running for money which they are not worth; after all how much demand is there for fields of $5,000 claimers?.  Well, the time has come where they are going to have to run on their own merit which means purses significantly lower from last year.  So their choice is to cut racing days so their simulcasting revenue gets divided over fewer days (like the Meadowlands is doing) and/or improve their racing stock (as the Meadowlands learned inferior stock leads to lower handles).

But the NJTHA does have another option if they wish to continue to do business as usual, they can talk to their racing brethren at Atlantic City Race Course and lease their facility.  No, their facilities leave much to be desired, but if they race during a period where fewer tracks are operating and being most wagering is being done off-track anyway, the lack of fan-friendly facilities should not matter.  

But realistically, a compromise will be made where the thoroughbred industry will be able to extort more revenue from the standardbred industry than they are statutorily required to.  So in the spirit of extending a brotherly hand, something which would never occur should the shoe be on the other foot, let me offer a proposal.

For five years, both Monmouth Park and the Meadowlands will agree to carry each other's signal and treat each as a 'premier' simulcast signal, meaning they will get preference when it comes to showing races on the larger television screens and their big races will be promoted as simulcast feature events. 

Let's say each track is scheduled to race 75 days.  Any wagers made at the Meadowlands or Monmouth on the other track's races will essentially be treated as if being wagered at the sending track, with only a .5% commission being taken out by each track taking the wager to cover the expense.  If one track, decides to race more days than the other track, say the Meadowlands races 75 days and Monmouth is racing 100 days, an average daily handle for Monmouth bet at the Meadowlands will be determined and the Meadowlands will take a .5% commission for the average daily handle bet through the Meadowlands for 75 days and the Meadowlands will receive the standard commission for the average daily handle on the remainder of the days.  The opposite will apply for Monmouth taking the Meadowlands' races.  This way, if as the NJTHA is saying more money is bet on thoroughbreds, they will come out ahead of the Meadowlands horsemen for their product, yet the out of state tracks will be treated the same as dictated by current law.

During these five years, it will be up to the NJ thoroughbred horsemen to upgrade their racing stock and make their product more desirable on a national level.  At the end of the five years, the agreement will end and normal simulcasting standards will resume.  With more money currently being wagered on Monmouth races than the Meadowlands races, I am sure this agreement is more than beneficial to the thoroughbred interests and should be detremental enough to the Meadowlands for the NJTHA's liking.

Harness interests are still talking about a May 7 start to the new standardbred meet.  It may be possible, but rather than starting off with a quickly thrown together product at the start, it would probably behoove them to wait a week or two and get the meet started organized and offering the best racing product possible.  It is supposed to be a new era at the Meadowlands so you want to start out on the best possible foot so if it means delaying the new meet, so be it.

One day, I do really hope to concentrate on racing horses.  It would be a beautiful thing.


Anonymous said...

Not a big thing, but California T-Breds race basically year-round without slots. Granted, it's spread out over Santa Anita, Hollywood and Del Mar in SoCal. Golden Gate races 6 months straight, 4 days/week in the North. But your point is well taken.

Pacingguy said...

I am not familiar with California, but I assume Santa Anita, Hollywood and Del Mar are geographically dispered so in effect, they are different local markets, not like Yonkers ahd the Meadowlands being 10 miles apart.

The_Knight_Sky said...

PacingGuy wrote: Granted, I am not a follower of thoroughbred racing, but name one thoroughbred racetrack which runs long race meets without a racino that has survived?

Hawthorne, Arlington Park, Suffolk Downs, Sam Houston, Retama and Lone Star Park. All feeling the pinch from their surrounding states but they're tightening their belts without the slots revenues at this time.