Archives for July 2017


Start with the working premise that most people are honest, depending, of course, on the rigidity of one’s concept of honesty.  Implicit in the premise is that if most people are honest some are not.

Proof is readily available on a weekly and daily basis.  One hears and reads of insider-trading convictions, wealth managers defrauding their clients, lawyers making off with escrow money, doctors overbilling Medicare, school teachers cheating to elevate their students’ scores on standardized tests, world-class athletes using performance-enhancing drugs, accusations of footballs being deflated in the NFL, possible fixed matches at Wimbledon, pump-and-dump stock schemes, and so on ad infinitum.

There is nothing new about this…human nature has not changed for the worst.  The difference today is that we hear about incidents of actual and alleged wrongdoing quicker owing to 24-hour news and social media.

Irrespective of the competitive human endeavor–in which participants are evaluated and often compensated on outcomes–some people will not resist temptation and will cross the line into unethical or illegal behavior.  No amount of moralizing will deter such actions, rather the only solution is to set rules and enforce them with strict oversight and meaningful penalties for flouting the regulations.

Which brings us to the scandal at Penn National Race Course.  A newspaper headline cogently summarized the situation: “Trainer Testifies [in federal court] that She and Nearly All of Her Colleagues Drugged Horses at Penn National.”

The article explained why such a scheme could go undetected: [The trainer] “estimated that 95 to 98 percent of the trainers at the racetrack used illegal drugs on the horses within 24 hours of the races, testifying that it was a known practice and that testing wasn’t done for the drugs in question at that time.”

The public-relations fallout and economic damage to horse racing from deceit like occurred at Penn National is immeasurable.  The casual reader of headlines like “Nearly All of Her Colleagues Drugged Horses…” is likely to surmise that this shady practice is rampant at all racetracks. The horse-racing bettor is tempted to find a fairer game to wager on.

The various interest groups in American horse racing had better unite behind federal drug regulation and enforcement, or they will sooner or later dispatch their own sport.  The words George Orwell wrote in Keep the Aspidistra Flying ring true:

“The mistake you make, don’t you see, is in thinking one can live in a corrupt society without being corrupt oneself.”

Copyright © 2017 Horse Racing Business

See Part 2 of “Corruption at Penn National Race Course” on Thursday, August 3, 2017 for unanswered questions about the scandal.


On Monday (July 17th), Horse Racing Business published “Technological Disruption in Horse-Racing Media,” and in it opined:

“While content that attracts readers or viewers is, of course, imperative, more so is the ability to disseminate the material effectively because so much high-quality content is available for nothing.  What matters most is the proven capacity to entice the right demographic to read or listen to what you have to say.”

Also on Monday, an article–“Publishers are Doubling Down on Video”–appeared in the Wall Street Journal that provides actual examples of how some well-known old-line print-oriented companies are responding to destruction of their longtime business models.  A few key excerpts are as follows:

  • Condé Nast and other legacy magazine publishers are redoubling their efforts in online video after learning from their stumbles over the past few years.  Those who tried unsuccessfully to build centralized, destination websites for their brands are now more concerned with distributing their work on platforms like Facebook, YouTube, Snapchat, and MSN.”
  • “At Condé Nast, traffic at the Scene [the name for its video hub] and its related branded video channels fell from a peak of 13.5 million unique visitors in October 2014 to 4.9 million unique visitors in June 2016…But the switch to publish and distribute stories on Facebook, mainly for young women, has worked.  In May [2017], the Scene attracted 98.3 million video views across Facebook…nearly triple the 36.4 million online video views the Scene generated in October 2016.”
  • “Time Inc., like Condé Nast, created a centralized video destination called Daily Cut several years  ago, but it never caught fire and is now in the process of being closed.  The company is experimenting with different models to distribute its biggest brands on streaming-media platforms.”

In the age of social media, horse-racing publications (print and online) and horse-racing telecasts will increasingly have to distribute content in non-traditional ways.  As Baby-Boomers gradually give way to younger generations in which information-seeking on social media is second nature, simply putting up a website and filling it out with news stories or scheduling a telecast on channel XYZ at a certain time will be insufficient to remain a going concern.

The requisite cultural change for media companies is to think of themselves as comprehensive creators and disseminators of useful content for a specific demographic rather than, say, as a magazine, a website, or a television network.  Call it technologically-driven new-age journalism.

Copyright © 2017 Horse Racing Business


The ongoing struggle of traditional media outlets to compete or even survive in the digital age is well documented.  A few for examples:

  • Total weekday and Sunday circulation for U. S. daily newspapers fell in 2016 for the 28th consecutive year.  Weekday and Sunday circulation (print and digital combined) both declined by 8%.
  • Advertising spending for print ads in the New York Times fell by 16% in 2016, whereas spending for digital ads grew by only 6%.
  • The number of subscribers to cable television in the United States decreased by 16% from 2011 through 2016.  ESPN has lost over 12 million subscribers since 2011.
  • A recent article in the Wall Street Journal–titled “Magazine Ads Go Out of Fashion”–said:  “The luxury industry’s global spending on digital advertising was $1.09 billion in 2016, up 63% since 2013.  Spending on magazine ads fell 8% over the same period to $2.6 billion.

Trends in the United States for horse racing are similar.  With the demise of Thoroughbred Times, the industry was down to one weekly print magazine–The Blood-Horse–with international reach and the Daily Racing Form is the only daily print newspaper.  Online publications such as Blood-Horse Daily and Thoroughbred Daily News are more contemporaneous.  The Paulick Report and the Blood-Horse websites are even more timely in that they are updated throughout the day.  In addition, numerous blogs, some quite expert, weigh in on various topics, such as handicapping and bloodstock breeding.

The Paulick Report is a textbook case-in-point of how an insightful start-up entrepreneur can quickly disrupt an entire industry by skillfully leveraging the power of the Internet.

Any print publication or conventional electronic channel has an uphill battle today amidst the media tide propelled by reader/viewer demands for timeliness, brevity, and free access.  People will undoubtedly persist in cutting the cord with cable and satellite television and abandoning print media.  The behavior of millennials in particular is anti-print, anti-conventional TV, and anti-pay for content.

This does not necessarily mean the death knell for existing old-line media companies.  To illustrate, the Wall Street Journal increased digital subscribers by 23% in 2016 and the Chicago Tribune saw a 76% rise in digital subscribers.  Glamour magazines are replacing lost advertising revenue by acting as advertising agencies for their clients.  The chief marketing officer of Vogue told the Wall Street Journal “We’re starting to become a creative agency.”  Some magazines are “joining with fashion brands to create digital movies and other content.”

Coming back to horse-racing media, the implications of the disruptive sea change are clear:  The human skill sets needed to compete for readers or viewers (and therefore attract advertisers) will increasingly require creativity in timely delivery of useful (to the reader or viewer) digital content rather than on old-fashioned journalism.  While content that attracts readers or viewers is, of course, imperative, more so is the ability to disseminate the material effectively because so much high-quality content is available for nothing.  What matters most is the proven capacity to entice the right demographic to read or listen to what you have to say.  If a media company can do this for themselves, it may be able to attract former advertisers as digital clients.

Copyright © 2017 Horse Racing Business