A follow-up to: When the Biggest Bet in the Room Folds
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So FanDuel is leaving. The question that’s now making the rounds — in backstretch conversations, on social media, and in the uncomfortable silences of industry boardrooms — is a simple one.
What replaces it?
And the answer, if you’re being honest with yourself, is just as simple.
Nobody knows. And almost nobody with the means to do something about it is in any particular hurry to find out.
I’ve Been Here Before
Let me be transparent about something, because context matters on this one.
I was part of an earlier attempt to build a racing media platform. The Elite Racing Network, launched by Louis Masry — yes, the same Louis Masry of Westlake Stables fame — was a genuine effort to create something different. The ambition was real. The enthusiasm was real. The run, unfortunately, was not long.
One of the core problems, and it’s instructive for anyone dreaming about a successor to FanDuel TV today, was that we weren’t showing races and were programming during the races themselves. If you think that’s easy to overcome, you haven’t tried to sell a racing media product to an audience whose entire reason for existing is to watch racing. That’s not a scheduling problem. That’s a structural one. And structural problems don’t get fixed by better graphics packages.
To be fair, that was Louis’ project and I was just a guest handicapper not privy to any business specifics. The lesson was hard and real: you don’t get to build a racing channel around the edges of racing. You have to be in it, with it, and showing it — which means you need the signals. And the signals cost money. A lot of money.
Let’s Talk About the Money
Here’s where the conversation usually ends, mostly because people don’t want to have it plainly.
FanDuel TV was launched in 1999 as TVG — the Television Games Network — a joint venture of TV Guide, the NTRA, and AT&T Broadband. It took a major corporate consortium just to get it off the ground. When FanDuel acquired rival network HRTV from the Stronach Group years later, the initial payment alone was $25 million. That was just to buy a competitor’s infrastructure — not build one.
Now consider what you’re actually buying if you try to stand something up today. A mid-sized operation with owned studio and equipment — cameras, switchers, control room — runs $200,000 to over a million dollars in initial capital. Core staffing for even a small linear channel runs $600,000 to $1.2 million annually. A mid-size network operation? $1.5 million to $4 million a year, just in salaries. And that’s before you’ve paid for a single second of content, secured a single satellite uplink, or signed a single distribution deal.
Running a broadcast television operation requires millions of dollars in investment, massive technical infrastructure, and in most cases an FCC license. For most content creators and independent operators, establishing a channel isn’t feasible — and even when it is, the costs involved often don’t justify the undertaking.
So when people say a racing channel could just “go digital,” they’re not wrong that the floor is lower. They’re just ignoring that the ceiling of what you actually need to do the job properly hasn’t moved much.
And here’s the part that really stings.
You’re Not Getting Paid to Show the Races
In virtually every other media model in existence, content producers get paid for their content. Racing works the opposite way. If you want to carry live racing signals, you pay the tracks a host fee — and premium signals from tracks like Churchill Downs, Saratoga, Keeneland, Del Mar, Santa Anita and Gulfstream sit at the high end of the scale. For premium tracks, those host fees typically run between 6% and 8% of wagering handle.
So the tracks aren’t paying you to showcase their product. You are paying them for the privilege of showcasing their product, on the hope that it generates enough wagering volume — through an ADW you either own or are somehow attached to — to make the economics pencil out. Twin Spires and TVG alone controlled roughly 71% of the U.S. ADW market as of the end of 2021. Those aren’t media companies with a wagering component. They’re wagering companies with a media component. The TV has always been the loss leader for the betting product.
If you don’t have an ADW — and you’re not going to build one from scratch in this regulatory and competitive environment — your revenue model for a racing network is essentially advertising.
Good luck with that.
Some of us are old enough to remember when TVG’s commercial breaks were dominated by a Joe Theismann prostate commercial running what felt like four times per hour. That wasn’t an accident. That was Madison Avenue telling you exactly who they thought was watching — and more importantly, exactly how enthusiastic they were about reaching that audience at scale. The NFL demographic this was not.
The Model That Works Everywhere Else
To understand how broken this is, just look across the sports landscape. The NFL Network is a fully operational, purpose-built media property backed by 32 franchise owners collectively generating billions in revenue annually. MLB Network. F1 TV. Each of them built on the foundation of a unified, centrally governed sport that decided its media destiny was too important to outsource forever.
Horse racing has two organizations with the wealth, the stature, and — theoretically — the mandate to lead something like that.
The Jockey Club. The Breeders’ Cup.
Both suffer from the same affliction. It’s not exactly rare, but very well-documented in the upper echelons of Thoroughbred governance. It’s called Short Arm Syndrome. That’s the condition where your arms are simply too short to reach the money in your pocket. There is a cure. It isn’t cheap. And the prognosis for voluntary treatment, based on the available evidence, is not encouraging.
The Jockey Club has deployed roughly $100 million from its commercial operations to industry initiatives since 2011 — registration systems, welfare programs, aftercare, America’s Best Racing. Meaningful investments, some of them. But a serious, sustainable, industry-owned media infrastructure has not been among them. In 2015, The Jockey Club purchased a majority stake in Blood Horse magazine — a trade publication. That’s the scale of media ambition on display from the sport’s most powerful private institution.
The Breeders’ Cup, sitting on its reserves, producing a two-day event that generates enormous global attention — and then essentially disappearing from the conversation for the other 363 days of the year.
The Honest Investment Question
Let’s say you’re a private individual with real money and genuine love for the sport. The kind of person who could write a check that wouldn’t require three rounds of board approval and a McKinsey study to cash.
Would you do it?
Think about it the way any rational investor would. When you buy a struggling stock, you want to get in cheap — betting on the upside while the price reflects the uncertainty. This is the opposite. The infrastructure costs are enormous. The audience is contracting, not growing. The regulatory environment is in litigation. The ADW revenue model is consolidated in the hands of two dominant players. The advertising market for a racing channel is, to be polite, not exactly a feeding frenzy on Madison Avenue.
You’d be making a massive capital outlay into a structurally challenged industry, in a media landscape that is itself being disrupted, without the one revenue stream — wagering — that could actually make the numbers work, because that market is already locked up.
Would you do it?
If that money weren’t inherited, almost certainly not. That would mean you made it yourself.
And if it were inherited — well, that’s a different conversation about motivation entirely. The sport has some of those people. We know who they are. And so far, the checks remain uncashed.
The Pattern Continues
FanDuel’s exit isn’t the cause of racing’s media problem. It’s the latest symptom of it. The sport has never truly owned its own distribution, never built a media infrastructure independent of operators who had wagering — not racing — as their primary business. TVG was always Flutter’s product first. FanDuel TV was always FanDuel’s brand extension first. Racing was the programming, not the point.
Now that programming isn’t worth the investment to the people who were carrying it. And the sport’s own institutions — with the resources and the mandate to respond — are busy doing what they’ve always done.
Waiting for someone else to carry the water.
The billion dollar question isn’t really about who can afford to build a racing channel. It’s about who has both the means and the will. In horse racing, those two things have rarely occupied the same room at the same time. And right now, that room is very, very quiet.
All this said: I do have some ideas and my thinking cap on.
Related:
When the biggest bet in the room folds
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