TrackNet/Cooperative Dispute Taking a Toll

A dispute over signal rates between TrackNet Media Group and 17 racetracks in the Mid-Atlantic region is a primary reason Gulfstream Park’s interstate wagering handle was down about 15% through the first seven days of its 2010 meet, Gulfstream president and general manager Ken Dunn said Jan. 14.

The contract dispute is preventing members of the Mid-Atlantic Cooperative from receiving simulcast signals from Gulfstream, Santa Anita Park, Golden Gate Fields, and Fair Grounds Race Course & Slots. Martin Lieberman, executive vice president of the cooperative, said that as of Jan. 14, it didn’t have an agreement with TrackNet Media for transmissions of signals, including that of Oaklawn Park, which will begin its meet Jan. 15.

In recent years, the Mid-Atlantic Cooperative has provided between 12% and 13% of Gulfstream’s interstate wagering handle, Dunn said.

Gulfstream’s interstate wagering handle through the seven race days ended Jan. 13 was down about $5.4 million from the same period in 2009, Dunn said. The decline has cost the Hallandale Beach, Fla., track about $100,000 that would have gone to purses, and about $100,000 “from our bottom line,” Dunn said.

Even if the dispute isn’t resolved quickly, Dunn said it will not impact Gulfstream’s purses or other aspects of its racing program.

The Mid-Atlantic Cooperative is made up of 17 Thoroughbred and harness tracks in nine states, along with their off-track betting outlets and account wagering platforms. Monmouth Park, Meadowlands, Philadelphia Park Casino & Racetrack, and Delaware Park are among its members.

TrackNet Media is a joint venture of Magna Entertainment Corp., the parent of Gulfstream, and Churchill Downs Inc. TrackNet Media operates as a facilitator for simulcasting and wagering, by negotiating contracts to disseminate tracks’ races to other locations.

CDI owns Fair Grounds, while MEC owns Santa Anita and Golden Gate Fields in addition to Gulfstream.  Oaklawn is among the non-MEC and non-CDI tracks for which TrackNet Media negotiates distribution agreements.

TrackNet Media’s contract with the cooperative expired several months ago. Negotiations involve the split of simulcast revenue at the Mid-Atlantic sites and the length of the contracts. There also has been word TrackNet is seeking some sort of “television fee” linked to the broadcast of races on HRTV, which is owned by CDI and MEC.

Another sticking point is racing from Laurel Park, which is located in the Mid-Atlantic region and owned by MEC. The track’s signal currently isn’t available at other Mid-Atlantic wagering outlets because of the dispute.

CDI tracks don’t release handle figures, but there have been anecdotal reports wagering on Fair Grounds racing is down at least 15%. The signal from the Louisiana track hasn’t been available since the meet began in early November 2009.

Patrick Troutman, executive vice president of TrackNet Media, and Lieberman declined to discuss details of negotiations. Each said the cooperative wants a longer-term contract than what TrackNet Media is proposing.

“We received a new proposal from (the cooperative) earlier this week, and we are considering it,” Troutman said Jan. 15. “It is unfortunate that customers at those locations are caught in the middle.”

Lieberman said the betting outlets have fans that follow all of the blacked-out tracks. Gulfstream is popular among those bettors partly because many of the horses racing there ran at northeastern tracks late last year, “They have been following jockeys and stables that are now at Gulfstream,” Lieberman said.

“Gulfstream Park and its horsemen are suffering economic consequences,” Dunn said of the dispute. “It is unfortunate that racetracks are suffering losses in revenue and purses, and customers are not able to bet on tracks that they follow.

“This is creating the image of greedy racetrack owners fighting with each other. But it is not as simple as that. The parties need to make decisions that are best in the long-term for all those involved. I do not know what the offers are in this situation.”

Gulfstream opened its meet Jan. 3 and will race through April 24.

The Miami-Fort Lauderdale region experienced several of its coldest days on record this month, including the Jan. 9-10 weekend. On Jan. 9, Gulfstream had the Gulfstream Sprint Showcase with five stakes. With temperatures in the 40s and amid a steady rain, Gulfstream that Saturday moved three non-stakes turf races to the main track. All-sources handle for 10 races was just under $7.3 million.

“With better weather and without the Mid-Atlantic situation, we expect it would have been $10 million or more,” Dunn said.

Last year, Gulfstream’s average daily all-sources handle was $8.4 million. A precise number for this year’s first seven days wasn’t readily available.

Gulfstream’s on-track betting through Jan. 13, for the combination of live races and simulcasting, was down about 9% from the same period in 2009, Dunn said. “We can attribute a good part of that to the record 80-year cold snap,” he said. “When we have good weather, I expect we will bounce back. Our product is very, very strong.”

High temperatures were in the 70s in South Florida Jan. 14-15.

Gulfstream has a 10-race card Jan. 16, with 116 entrants not including also-eligible horses. The feature races are the $100,000 Marshua’s River, at 1 1/16 miles on the turf for fillies and mares 4-years-old and up, and the $100,000 Dania Beach, at one mile on the turf for 3-year-olds.

On Jan. 17, Gulfstream will offer the $100,000 Sweetest Chant Stakes at one mile on the turf for 3-year-old fillies. Gulfstream will offer a special Monday card Jan. 18 for the Martin Luther King holiday.

Gulfstream also has added Monday, Feb. 15, Presidents’ Day, to its live schedule. It has dropped two Wednesdays, April 14 and April 21, from its live calendar.

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