The Culture, TV Audiences & the Opposite of Monopoly

Good day racing fans.

Lance Armstrong was interviewed recently about his love of golf, via Golf Digest:

"Cycling, when I was competing was the Wild West. Nobody considered doping cheating. Anything goes, and it was every man for himself. Golf is different from the culture of cycling. You might consider me the last guy to have anything to say about cheating but in golf I love adhering to the code of honor that we didn't have in cycling. If I moved the ball in the rough and got caught I just wouldn't regret it, I'd be heartbroken. When I think of reform in cycling, I think about golf."

Golf is not squeaky clean as a sport - just study what recently passed Charlie Sifford went through to play it - but the participants (in a recent poll, 92% of parents said they would be happy if their kid ended up a golfer, when compared to other sports) and the game itself are both generally beyond reproach. Tiger Woods, for example, didn't get skewered by tour pros and many others much for his human indiscretions, but he has had whispers follow him with some of his interpretation of the rules.

It's no secret that horse racing's culture is closer to cycling. Unless something radical happens, like it did for cycling, or baseball, I don't think that will change.

Dan Needham took a really deep, interesting look into television and the Triple Crown. Howard Cosell, the titan of sports, always quick to analyze what was happening in any sport when it came to its presentation, summed up something we all know, but hear plenty of vitriol about even today.

“You have to be willing to alienate - or at least talk at a sophisticated level they’re not at all pleased with - the serious horseplayer,” he explained. “You can’t be concerned with them. You have to worry about the 99 percent who are watching just because it’s the Derby.”

Today I do say I disagree. If TV is being used for ratings, like it is for the Triple Crown, expanding the audience with fluff has worked, yes, but horse racing does not run on TV ratings. A lady doesn't wear a floppy hat to Mountaineer, there are no zoot suits at Thistledown. But they do bet there. In my view, racing loses when it does not promote the interesting, deep, puzzle solving that is handicapping, as much as it can. 

Here's a chart. It's takeout rates in California from 1953 to 1989.

To the left of the arrow is a period that I would consider horse racing a monopoly, to the right of the arrow it was no longer a monopoly. That chart goes to 1989. Takeout is higher now in California and now stands between 20.5% and 21%.

I was trying to figure out how those in charge could possibly think raising prices 30-40% in a newly perfectly competitive market was wise? Especially when simulcast came in and allowed for rapid fire losing (take goes down for those games, or they die).

If four restaurants moved into a town where for 50 years you were the only one, would you double your prices and expect to succeed? Would you blame it on the weather if you didn't?

This chart helps explain why we see food trucks, begging for handouts, hand wringing and all the rest. Racing is trying to put square pegs in round holes when it comes to betting. That simply cannot work, so you have to do other things.

Have a nice Thursday everyone.

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