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To: HG who wrote (629)	1/10/1999 1:56:00 PM
From: HG	Read Replies (1) \| Respond to of 663

Does anyone see a need to share information on this merger between now and Feb 17 when shareholders from both companies will vote on the proposal? Or perhaps everyone knows exactly what they are going to do or have already left. I still have a lot of questions and just wonder if anyone else is in the same boat. Regards, HG

To: HG who wrote (629)	1/11/1999 12:57:00 PM
From: Craig Jacobs	Respond to of 663

Interesting piece sent to me by a friend, thought you guy's may be interested in the possibilities... Racing Bets on Cable Operators By ANDREW GROSSMAN May 4, 1998 It is appropriate that attendees of this year's National Show started swarming into Atlanta on the day of the Kentucky Derby: The future of thoroughbred horse racing as a sport could depend on the cable industry. If all goes reasonably well, by the time Derby 1999 comes around, cable operators will have heard the pitch for an interactive digital-tier channel that will let a guy like me watch and wager on the ponies from my armchair in the den. Subscribers will be able to place bets by merely pressing some buttons on a remote control. The question today is who will provide this service: ODS Technologies, a Broomfield, Colo.-based start-up that is pitching Television Games Network (TVG) to cable operators for a late-1998 launch; or Tele-Communications Inc.-controlled United Video Satellite Group. TCI, through UVSG, owns a 10 percent stake in ODS, but the cable company believes that interactive horse-race wagering is such a good bet that it wants more. For much of the last year, the two companies have been locked in an arbitration battle to sort out who owns the technology that is needed to bring the "sport of kings" into millions of cable homes. Both sides are sworn to secrecy, but an arbitration panel is expected to issue a final report in June. Sources in the racing industry believe that the arbitrators are taking their time because they are trying to convince the warring parties to come to their senses and join forces again. These sources believe that TCI's distribution dominance -- through its own subscribers and through those of its MSO partners, such as Cablevision Systems Corp. -- is a compelling argument for ODS to give TCI a bigger share of the business. And distribution will be even more critical for TVG because it faces a problem that most other start-up networks don't: It's only legal in the eight states where telephone betting is allowed -- New York, Kentucky, Pennsylvania, Oregon, Maryland, Connecticut, Nevada and Ohio. The business is too small for competition, and the bad news for ODS is that TCI has a pretty big presence in many of those states. TVG has signed "exclusive" deals with 10 prominent racetracks, but the tracks can break the pact if TVG fails to meet certain performance standards. That's why compromise is in the air. That's good news for racing, which is depending on cable to expand its base into the home and to create new fans via the tube. That's the only place where casinos can't crush the sport. In state after state, gambling is booming, but people are abandoning racetracks for the high style and hospitality of casinos. In the last few years, the amount of money bet on racing -- both on- track and at off-track sites -- has dropped from $19 billion to $15 billion. Why is racing dying? Casinos are more hospitable to their clientele than racetracks (free drinks, versus paying for parking and admission); the action comes hot and heavy at casinos; and any plunger can figure out how to pull a slot machine, as opposed to the vastly more rewarding, but very challenging, pastime of trying to pick a winner at the track. So racing is counting on the couch-potato vote. "There's a very good business in here for horse racing," said Tom Aronson, vice president of business affairs for TVG. "It should be obvious that if we were building something that nobody was interested in, we would not be in arbitration right now." This is a business worth fighting over, agreed Pete Boylan, UVSG's chief operating officer. "This is an excellent opportunity for the cable industry if it is carefully pursued or managed in a very responsible way in states where it is legal and supportive of it. It could provide an exciting, additional unregulated revenue stream that is a very attractive return on bandwidth for operators," Boylan said. Just how will operators make money? No one is giving away their business plan, but operators could get compensated based on the number of subscribers that they bring to the table. "It will be richer for them than home shopping," insisted Jay Barchus, TVG's vice president of affiliate sales, who will man a modest booth at the show. TVG would love analog carriage, but it also realizes that a racing channel would be an excellent digital-tier driver. More than most hobbyists, racing fans spend money on their obsession -- lots of it -- and forking over $10 per month to root home a winner would be chicken feed to them, no how matter how many losers they pick.