12/01/2014 5:02PM

Impasse over simulcast fees for Stronach tracks

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Major simulcast sites in Ohio, Pennsylvania, Texas, and several other states on Monday dropped the signals from tracks controlled by one of the U.S.’s largest racing companies due to an impasse over the terms of a new contract, officials for both sides of the talks have confirmed.

The impasse is pitting Monarch Content Management, which controls the simulcast rights to Santa Anita Park, Gulfstream Park, Tampa Bay Downs, and a handful of other major racing signals, against the MidAtlantic Cooperative, a collective of Thoroughbred and Standardbred racetracks that banded together more than a decade ago to increase their leverage in simulcast negotiations. Monarch Content Management is owned by the Stronach Group, the private racetrack company.

The impasse has yet to have a significant impact due to the paucity of Monarch tracks that held live race cards Monday, the first day of the blackout. However, Laurel Park in Maryland and Tampa Bay Downs in Florida resume racing Wednesday, while Golden Gate Fields in Northern California resumes racing Thursday. More significantly, Gulfstream Park in south Florida begins its highly popular winter meet Saturday, and Santa Anita begins its winter meet Dec. 26.

Though they would not provide specifics, officials for both sides said the impasse revolves around the rate that Monarch is seeking for the signals. So-called content providers like Monarch, Churchill Downs Inc., and the New York Racing Association have been aggressively seeking higher rates for simulcast signals over the past several years, with some success.

Scott Daruty, the president of Monarch, said on Monday that Monarch was seeking changes to the structure of the contract that would charge some sites in the cooperative a higher rate than other sites. The cooperative currently represents 23 racetracks, including nearly all of the tracks in Pennsylvania, Ohio, and Texas, along with a smattering of harness tracks along the Eastern seaboard.

“Some of those sites [in the cooperative] don’t even run live racing anymore, and they’re still insisting that they all pay the same price,” said Daruty. “We’ve questioned whether that one-size-fits-all model should continue to apply.”

Daruty said Monarch offered to allow the sites to continue to offer wagering on the signals while the two sides talked through December, but that the cooperative declined.

“It’s unfortunate racing customers are going to pay the price,” Daruty said.

Phil O’Hara, the executive director of the MidAtlantic Cooperative, confirmed that Monarch offered to allow simulcasting to continue on an interim basis. He said Monarch had not yet responded to a proposal the cooperative sent Oct. 30, and that agreeing to the short-term extension was not in the cooperative’s best interests.

“We figure it’s better to discuss this with a long-term resolution as the goal,” O’Hara said. “We’ve been waiting since Oct. 30 to get a proposal back from them, and we figured that was enough time.”

Content providers like Monarch and Churchill have been pushing up simulcast rates at a time when the racing industry is struggling to maintain its betting figures. Handle on U.S. races has declined nearly 30 percent from the high-water mark in the mid-2000s, and a sharp decline in the foal crop has begun to put additional pressure on the live racing product. At the same time, the industry has shown no indication that it is creating new fans or stopping its loss of market share to competitors in the gambling and entertainment businesses.

Like Churchill, the Stronach Group owns and operates a national account-wagering company, XpressBet.com, giving the company an enormous amount of leverage over simulcast sites that do not take the company’s signals. If the impasse results in a local blackout, customers who do not face state-based restrictions on ADWs can open accounts with the online companies that offer the signals, which, in most cases, are owned by the companies that own the blacked-out tracks.

The MidAtlantic Cooperative said customers of its members wagered $1 billion last year. The Thoroughbred members include Parx Racing, Penn National, Atlantic City Race Course, Delaware Park, Charles Town, Colonial Downs, Suffolk Downs, Sam Houston, Retama Park, ThistleDown, Mahoning Valley, and Belterra Park, along with about a dozen harness tracks.

hersbar More than 1 year ago
The problem with the horse racing industry is that the guys who controls the business end of it forget that without bettors it would not be a horse racing industry. But since racing and casinos have merged in many markets many horseman feel that they don't really need the horse bettors as long as the slot machines are paying the purses.
ralph More than 1 year ago
its not good for racing to have disputes like this more and more people turn to casinos and card playing and this sport needs positive and modern action or most of it will be gone
SalvatoreC More than 1 year ago
merieno If you don't supply a product seems to me your overhead is less!! you can pay or let your handle suffer. any way seems to me without the winter meet at gulfstream , you might as well have no racing in the winter.
Benny Bean More than 1 year ago
On sick of this. So long Xpress bet. I'm done with you. Time for TVG
rkccasselberry More than 1 year ago
After 40 years in the game I am very quickly losing interest. Like to handicap but also like to put a dollar or two behind my handicapping. Very discouraging when you pick right but can not get rewarded because of this blackout. At least 20 years ago you expected that if you could not make it out to the track, but online betting made it so nice. Why does the powers running horse racing insist on taking one step forward and three steps back at every chance they get. I live in PA and this blackout had better get lifted soon or I am out.
Gary Albano More than 1 year ago
Just the rich trying to get richer at the expense of the already declining fan base . They will eventually cut their own throats, and they will deserve it. When you go to a casino or an otb and you buy a racing form for 8 bucks and only 2 of the tracks are available to bet you are getting robbed and that will leave nasty taste in your mouth and a lot of people will not go back. In a day where they should be bending over backwards to keep customers and try to entice new ones greed will ruin everything again. Gary A.
darrasps More than 1 year ago
Why Does He Need More Money To Build A 2 Story Statue of Pegasus in the parking lot for his pompous butt to see! Sounds like another obama. Haven't we had enough? When will the people get it! Just for this i lit his website up for $1400 take that you pos!
Ian GW More than 1 year ago
Lot of angry people at my local turf club today who wanted to play Tampa and were turned away. I don't understand why they allowed to keep the signal open to play and they still decide to blackout? Who are these people making these decisions and why are they involved in this game? Are they competent? A automatic black out seems to me a pride thing rather than a logical decision.
Michael Lacolla More than 1 year ago
It's a us against them thing. Midatlantic Coop was offered to continue to show races while negotiations continue but declined. This could be long. Last impasse in 2010 took 7 weeks to resolve. As a fan I am getting tired because we are disrupted during these disputes.
Ian GW More than 1 year ago
I agree. I find the coop at fault since they had the chance twice to keep the signal open why they negotiate. That is the right and logical thing to do for the customer. Why is the customer even involved in this?
1971 Whippet More than 1 year ago
I always hoped that he'd be elected to the Austrian Parliament. He might've been too busy for horseracing. Can't win 'em all.
Frank Reach More than 1 year ago
Free enterprise at work. Monarch has every right to negotiate higher fees for their signal, as Mid Atlantic has the right to decide to not pay the higher fee and not take the signal. They will either come to a compromise agreement on a price....or not. But, let's think this through for a minute. Bottom line is does it make them money....which relates to really what do the horse players play. Truth is Monarch puts on an INFERIOR product. Their racetracks are poorly run, their takeout on the pools are too high, and the truth is horse players wager more with NY tracks, Kee and So Cal racing.....why? Simple.....the NYRA puts out a better product and has a LOWER takeout. So, it's true, because Monarch gets a little better upper hand in the winter due to Gulfstream starting and Tampa Bay....now they dig in, take a stand and try to get more money for their signal....which is FINE. But, MidAtlantic can choose whether it's profitable or not to pay. If I was MidAtlantic I would NOT pay. I just wouldn't. In my opinion Mr. Stronach has been bad for racing, puts out a horrible product and as a horse player....yes, I'll initially miss those tracks...but, let's face it a stand has to be made somewhere. Those players can, of course, wager on those tracks another way if they really want....but, players will still wager NY, Kentucky and So Cal freely and will be just fine without the Stronach tracks. Now, if Monarch put out a better product ...then it's worth paying for it. Of course, they public just screams for their racing...and yes, even I want all these tracks as options to watch and wager..but, this is why free enterprise works best...let the market determine if they buy the signal or not. At this time, Monarch is trying to charge too much...that's obvious to me....but, it doesn't make them wrong...it just means put out a better product or lower your cost. It'll get worked out. But, bottom line the customer is us horse players....and first things first...lower your takeout of the pools...and people will flock to bet and guess what? Profits go up. Good luck all.