If I Hit the Lotto on Tuesday I'll buy TVG and fix racing... You're Welcome

Courtesy of Patrick Patten

I play the lotto not because it is the worst odds imaginable, not because I don't realize it's a "stupid" tax, but it allows me to write these dreams out like I really have a chance.  TVG is up for sale, and the NTRA has always been a fan of the channel.  So why not buy it outright, and do something good with it.  My suggestion:  Fix racing with it.   

I'd buy TVG and then buy every wagering & broadcast signal "exclusively."  Then I'd let every track I bought a signal from buy into TVG and form an LLC.  Getting over the pie-in-the-sky hurdles of winning the lotto, getting cooperation, and having something work in racing, it's not that bad of an idea. 

The basic structure is that the tracks form an LLC to obtain both wagering and televising rights exclusively from themselves (the tracks) and let the LLC sell signals back to everyone based on common interests. 

Assume the blended rate is 20%.  Each party entering the agreement agrees that the LLC will pay members 8% for exclusive gaming and television rights that the LLC can sell.  What each track will pay for a signal from the LLC is left up to the members of the LLC.

How I see it working:

NYRA, Tracknet, Keeneland, Podunk Downs join the LLC.  They are each free to purchase other signals outside the LLC, but anyone purchasing members signals goes through the LLC, including LLC members. 


Purchasing Signal:

An ADW platform asks to purchase signal - Flat fee is 14%.  Rebates can be had depending on how many customers they have, and handle wagered, treat them as they treat their customers. 

ADW w/ Television access- Flat fee is 14% Extra rebates can be had if they purchase the exclusive television right (separate from wagering) of certain tracks, they can have that track's signal cheaper.  The wagering rights are separate from the television rights (this fixes the current mess w/ one sentence I'm pretty sure).

Tracks - Flat rate is 12%, the rate can go up or down depending on purses/race, race days, breakdowns/starter, drug policy, whatever they see fit to put here.

Money:  The LLC is for profit.  If the LLC can buy for 8% what it  sells for 11% then the money left over (after an operating budget approved by everyone in the LLC) would be split amongst member tracks based upon last years all source handle and/or some other mechanism. 


Weakness & Solution:  Allow tracks of certain size (size can be handled in various ways, but lets just say handle under X dollars) to partner their signal with others so as to create better competition, a quality vs quantity situation.  The LLC does not have complete a la carte pricing where a buyer can pick and choose tracks as they need but a buyer could buy the NYRA, Traknet, invididually and then West Coast (could be GG, PM, Emd) or the Mid-Atlantic group (MTH, PHA, Md) etc.

Trigger the start.  Sing up tracks one by one, but they won't have the contract go into effect until X% of wagering dollars is linked up.  If you get 25% of the tracks on board the other 75% will undercut and win, so pick a target and use that to get everyone on board.  No one left behind. 


Strengths: A reason to cooperate.

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