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Thursday, January 19, 2012

Kodak Files for Bankruptcy, What Racing Has In Common

A sad bit of Americana is biting the bullet as news comes that the venerable Eastman Kodak Company has filed for Chapter 11 Bankruptcy today.  What does Kodak and horse racing have in common.  For 131 years, Kodak depended on film to fund the company, believing film would always be used.  Finally, it awoke and realized this fad, digital cameras heralded the digital age, but it still thought it could survive by keeping on selling film and developing it. 

Eventually it realized too late that film was history and they went into the digital printer business, but too late to save the company.  Unfortunately for Kodak, no one proposed that they be able to build a filcino where you could by film and play the slot machines.

Which brings us to horse racing.  As mentioned in the famous Zelinski Report, harness racing hasn't changed it's business model from the 1950's (and this applies to the runners as well) and it finally woke up and realized society was passing it by.  Sure racing could survive, but the format (delivery, type of product, type of wagering) would have to change.  The only difference between Kodak and racing is that state governments started having problems and needed financial help so they gave racetracks slots to share the profits with.    Sure, racing added simulcasting and reluctantly added account wagering, and in a stroke of genius, developed the Strategic Wagering Program but who are we kidding?  It is still the 'same pig with lipstick on it'; the same product with no prospect of drawing in new fans.  The racing hasn't changed, the type of bets are essentially the same; the time between races is painfully long, and the takeout for racing is still in the film age while casinos offer takeouts in the digital age.  

For those of us who truly love racing, we can only hope leadership can arise and get racing into this digital age before time runs out.  Let's face it slots, is keeping the business from going into Chapter 11.

Fortunately, there is a glimmer in East Rutherford, NJ.  A slight Europeanzation of the sport with a 1 1/2 mile series with fourteen horses; the promise of a 16 horse 1 1/8 mile race down the road with the Hambletonian Society.  Who knows how European the racing will get?  Don't be surprised to see more innovations both on and off the track at the Meadowlands.

In a perverted sort of way, what Christie did to the Meadowlands may be a blessing as it gave Jeff Gural the opportunity to get into a market where the horsemen are equally desperate trying to avoid their own Chapter 11 and willing to make changes they would unwilling to make with slot machines. 

Personally, I think Gural has basically told the rest of the industry to keep on fiddling like the orchestra on the Titanic while he has work to do revamping this sport.  When he comes up with a model that works, the rest of the industry can either join him or go down with the ship (I apologize if the analogy causes heartache with anyone at this time, re: the Italian Cruise ship).  This has been noticed in Canada where Gural will be speaking this weekend in front of a sold out crowd.  Certainly he has his detractors but in an industry which fights change it is to be expected.  All I can say to the deteractors is remember Kodak.


Rahul said...

I was comfortable with a box camera in 1950s, no high tech, simple black andwhite pics. I could appreciate Kodak when we visited Rochester, US. They had made a camera as cheap as one dollar, every student had it. I cannot reconcile it can go for bankrupcy!

helena said...

Filing for bankruptcy is a big step. But, it can be just what you need to do. Or, maybe, it's the last thing you should be considering.
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