Racing Victoria confirmed on June 6 that Seven West Media is its preferred broadcast partner, bringing racing to the general public on free-to-air and away from subscription TV – yet Tabcorp’s Sky Racing is unlikely to miss out.
The move has been put to Victoria’s three metropolitan clubs – the VRC, MRC and MVRC – and Country Racing Victoria for final approval.
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Given the clubs would have been involved in negotiations, it appears to be a matter of a rubber stamp following board meetings to be held this week.
Should it proceed further, Victorian racing will be shown on Seven every day of the year – missing just Good Friday and Christmas day – with a five-year deal to show the full 520 race meetings.
Seven West Media (Seven) chief executive Tim Worner was understood to be influential in the negotiations with Racing Victoria (RVL) – he is a racehorse owner, breeder and punter who races horses under the banner of Indian Pacific Bloodstock.
Victorian racing will not receive any upfront payment, but will share advertising revenues from the broadcast, likely to be heavily based around wagering.
It will be shown on a new Seven’s digital channel as soon as August.
Tabcorp hasn’t been forgotten completely. In the statement, newly installed RVL Chairman David Moodie noted the ongoing “vital importance” of RVL’s alliance with joint-venture wagering partner Tabcorp Holdings.
The statement continued that RVL wished to continue a broadcast relationship with Sky.
“It is RVL’s view that, in addition to the proposed Seven West Media deal, vision of Victorian thoroughbred racing should continue to be broadcast through the Tabcorp Holdings-owned Sky Racing distribution network including its domestic, international and digital platforms.”
So with all that said – who wins, and who loses, and could anything else be in play?
- On the surface, Racing Victoria has smashed Racing NSW in a heavyweight staying test, and by some lengths. Racing NSW are at a significant loss here. While racing deals are complex, the fact that the full 363 days of racing in NSW cannot be seen easily by the general public is a win to Victoria. Would owners, connections, jockeys and trainers prefer to be on free-to-air or just Foxtel and various digital platforms? The answer is surely clear.
- Lee Freedman doesn’t see a long term win – telling Fairfax’s Patrick Bartley that racing shouldn’t walk away from the proven revenue streams in place. “Racing is sick of being sold expensive dreams. Racing isn’t going to reverse the trend of decline by spending fortunes on free-to-air,” the hall-of-fame trainer told Fairfax. “I’d like pictures that aren’t going to cost us all a fortune … yet again,” referring to the TVN vs Tabcorp.
- The Seven deal initially means no upfront payment to Victoria’s three clubs. That money, which was to come from Tabcorp was said to be $300m across 10 years / around $30m per year. While Tabcorp are likely to still be asked to pay for broadcast and digital rights, given the lack of exclusivity, whatever is on offer – if anything – will likely be watered down. Less money short-term is perhaps a concern, but prize money was just increased by some $16.4m by Racing Victoria next season suggesting the bank is in good order. Fairfax hinted that RVL’s Seven announcement is all part of a game against Tabcorp – which would be incredible brinkmanship. The TAB told the Herald Sun and The Roar’s own inquiries it would not comment until later this week after it assessed its position.
- The Australian reported that under the proposed arrangement, the Victorian rights-holder will initially pay about $10-12 million in establishment costs and salaries for personnel bringing together on both sides of the camera. That means $30m each year lost, with $12m more in expenses – a $42m turnaround in upfront funding each year.
- Can Seven support a significant enough broadcast with just one race every 30-35 minutes? It doesn’t sound particularly attractive. Certainly many are dissatisfied with Sky’s rolling coverage which provides little pre or post-race service. Over the weekend, Brisbane’s major Group 1s were quickly cut away past the post to look at Sydney’s pre-race parade, reducing the atmosphere. NBC’s coverage of the Belmont Stakes showed a truly different perspective on covering significant races.
- Tabcorp’s problem with TVN have never been publicly stated – but the surfacing of rival corporate bookmaker advertisements was likely a significant part of the efforts to place Racing Victoria and Racing NSW at loggerheads to rip TVN apart. Tabcorp’s dilemma now runs across several areas. Should they look to sponsor the broadcast on Seven or choose to ignore it completely and allow corporates to run their banners across the lot? Some suggest that the company will become increasingly dedicated to a NSW-first approach across its own platforms.
- The deal includes digital rights, which means streaming by Seven on mobile devices and computers.
- Sportsbet, who currently stream Racing Victoria races on its digital platform may be less compelled to continue to pay a percentage of turnover on Victorian races given that it is now on TV and on rival digital platforms.
- Racing.com’s digital platform is also in question but likely to continue given the indications about digital streaming. RVL and Seven are likely to save costs by using the one platform, although it would surprise to see Seven give. Will Moonee Valley come to that party, given they haven’t yet?
- The deal could include coverage on Presto – Foxtel and Seven’s digital streaming app, although nothing has been mentioned.
- Can one race club hold the rest of Victoria at ransom if they don’t like the deal? And although board members are meeting to decide around a table, will clubs be canvassing members and participants?
- The negotiations show a rather interesting distance between Fairfax and News Corp. Fairfax insist Tabcorp are “far from beaten”. News say it’s a rubber stamp away, with the MRC an “unabashed supporter”, and Country Racing Victoria and MVRC “taking their leads” from RVL. Does that mean it’s down to the VRC only, who already have a relationship with Seven due to the Melbourne Cup carnival?
A final thought – surely Australian racing’s continual get-square, us vs them, state vs state approach isn’t creating fierce, profitable competition. It spells disaster in the end. Queensland Racing continues to struggle, having the slate wiped clean yet again.
It won’t matter which state has better wagering when too much time and resources have been spent fighting each other rather than making the code great and getting the best horses on the track more often, rather than making money in the breeding barn.
Imagine a national body that incentivises a kind of Australian Championship or Nationals event where horses are encouraged to win a Group 1 in at least two or three states to claim a bonus in a season – think the Global Sprint Challenge on a local basis.
All in all, we await to see where the pen lands on this current negotiation process.
Update: Tabcorp has made an announcement to the ASX on behalf of subsidiary Sky Racing this morning, as follows:
Tabcorp (ASX: TAH) notes the announcement by Racing Victoria Limited (“RVL”) on Saturday, June 6, 2015, that it is recommending to its four member racing clubs that its preferred outcome for the broadcast of Victorian thoroughbred racing is to partner with Seven West Media.
Tabcorp made a Formal Offer on June 1, 2015, in accordance with a timetable agreed with RVL. At the same time as submitting its Formal Offer, Tabcorp gave notice that the current interim broadcasting arrangements with Victorian thoroughbred
racing will cease on June 15, 2015.
Tabcorp has not received a decision from RVL and its member clubs in relation to its offer.
This is clearly Tabcorp giving notice to Racing Victoria – saying this protracted negotiation arrangements must end.
Jury Duty – listen below to a discussion with Racing.com’s Shane Anderson, with Wayne Hawkes, Jake Norton from the Melbourne Racing Club, and Michael Lynch on Tuesday’s edition of Jury Duty as they discuss the latest in Racing Victoria’s broadcast rights negotiations – from the start until around the 23 minute mark on this particular issue.
Jordan
Guest
It's a very good idea As I'm a vivid supporter of the vic racing industry and owning an off the track thoroughbred But some of the international racing would be great to have on free to air like Epsom, Champions day, breeders cup, Dubai World Cup and the big jumps races from overseas Plus the big racedays both metro and country This would be great to showcase not only the Australian quality but the worldwide quality
Bondy
Guest
Tristan That's a bloody long time for a horse to live , I didn't see him race I was in my late teens . Two New Zealand equine warriors have passed this year & Rough Habit ...
Tristan Rayner
Editor
Too true. Was going to write-up but haven't had a chance all day.
Bondy
Guest
I just heard on the news Bonecrusher's passed , sad news .. . (http://www.smh.com.au/sport/horseracing/bonecrusher-dies-champion-race-horse-will-always-be-remembered-for-iconic-1986-cox-plate-win-20150611-ghlb5v.html
Craig
Roar Rookie
Can you explain to me Matt where there are limitations on vision to the sport caused by Racing NSW? The only vision limitations I experience currently are on Victorian racing with those aweful "we cannot show this race due to contractual arrangements". This seems to be the latest "spin". Racing NSW limiting coverage. The exact opposite is true.
MATT
Guest
The interesting thing is TVN were offered the same proposal through a consortium ( read Ch7) some year ago for Free to air coverage - they chose to go with TABCORP. How long are NSW racing going to lie in bed with this mob and limit the exposure to the sport. They disbanded TVN to suck up to their Tab corp buddies and now look like getting locked out of Free to air coverage every day of the year....nice one Vlandys
no one in particular
Guest
A boutique channel is now pie in the sky stuff. It was tried and failed. The market rejected it and all stakeholders lost money. It won’t happen again. While there are some racing fans that want it, they are very much in the minority. While racing is still broadcast on other channels it fulfills the markets needs. It’s the same reason we don’t have a dedicated rugby league channel, or cricket channel or golf channel or tennis channel.
no one in particular
Guest
So it seems as though Victorian clubs are going to use the money they used to waste on TVN for little return will be used on this 7 venture for little return. What will be on this channel from 6pm to 11am each day? How will they generate revenue in these 17 hours per day? To me, the whole Victorian racing rights saga smacks of arrogance. They think that what they are for 10 days a year is what they are year round. The sycophantic Melbourne media about anything Melbourne don’t help
Jason Cornell
Expert
on the mark http://www.afr.com/business/sport/seven-in-the-race-for-a-wagering-licence-20150609-ghjsm9?stb=twt
Bondy
Guest
prawnmachine In reading that link , I'm in NSW when can I watch racing from Victoria I assume at the start of the Spring Carnival on Ch 7two ? ....
SMKB
Guest
I've started laying the Market Movers on Betfair Bondy. I'll be as rich as you once were if it keeps up like this :)
SMKB
Guest
Tristan - did you read about the explosive revelations at today's Cobalt inquiry in Sydney? My first reaction, given that all the "bad stuff" seemed to be coming out of Melbourne, is why this hasn't/wasn't being dealt with by RVL? It appears that the Sydney inquiry is doing the dirty work that should have already been dealt with in Melbourne. The relevance to what we are talking about is that I think that the administrators in Victoria have become so obsessed with Racing NSW and broadcast rights, that the day to day operations are starting to suffer. I am very worried about Victorian racing. It appears to have gone from a position of stability and national leadership to one of instability in a very short time. Some bad decisions are being made. I think walking away from Sky and in the process thumbing your nose at $300 million will be yet another one. Yes. The failure of TVN was disappointing. But there were many reasons why it failed. The main reason it failed was that they could not write enough advertising invoices. Nothing to do with Racing NSW. RVL needs to move on from this. The "blue sky" of advertising revenue on Channel 72 vs. $300 million? C'mon. Give me a break. Channel 9 announced to the ASX on Friday that the FTA advertising margins had been soft and they were warning the market about profit. If you want to make an assertion that "RVL has smashed Racing NSW", come back to me in 2025 and tell me if RVL made up for that $300 million they knocked back 10 years ago :)
prawnmachine
Guest
http://goo.gl/mMVKnf I think the game of brinkmanship just reached another peak. How do you reconcile the moaning from the clubs & TABs during the EI induced blackout with this decision that, not only underlines what consideration they all have for punters and the pubs and clubs that SKY have gouged for years, but will inevitably hurt sales. If you ever see the words "innovation" or "vision" in another Board report or press release I think you're entitled to be sick.
prawnmachine
Guest
Hold onto those romantic thoughts, just don't let them cloud your common-sense. I've been to Dubai and the chief topic of conversation is "how good would this be if you could bet on it". Still, I'm sure there's people who could watch a roulette wheel, just for the sheer joy of it. For sure feature meetings deserve and support feature coverage. They present more peripheral content than just the betting and provide an easy entry point for new and infrequent audiences. Just don't try to be too clever or overload them with expert analysis - it reinforces a view that only experts (& crooks) can win. If, however, they focus on making betting more accessible and entertaining than every meeting can be a feature, or at least an opportunity for audiences to engage more frequently. We blokes all love being 'tragics' and elevating our pursuits above the norm, but watching horses race is not the real game - it's betting on which one will win. The business of breeding, training, riding, feeding, etc, is full of family and friends. It's fantastic but ancillary, and will fall by the wayside if people stop betting. Punters, on the other hand, won't stop betting if horses stop racing.
Tristan Rayner
Editor
Will - The only way all the clubs will agree (apart from the MRC, who are all-in) is to see the modelling and revenue projections. You can understand the attraction of a free-to-air channel to provide coverage but asking for a leap of faith won't work - it has to be tangible. The clubs know this.
Tristan Rayner
Editor
Hi prawnmachine, Another strong comment. As a hopeless romantic, I'd probably watch and attend if you couldn't bet. I imagine it'd be an odd but not unenjoyable experience - just as in Dubai. Your salient point stands. I'm thinking of the keen racing fans (aka tragics) when I say there's a good argument to be made about servicing those interested in feature races, the pre-race parade, education, analysis from respected experts, post-race analysis, celebration of champions, valuable replays etc.
Tristan Rayner
Editor
SMKB - I'm happy to admit I might be proven wrong. My thinking at the time of writing was that Racing Victoria at least still has two options on the board, rather than quickly signing off with Tabcorp and not attempting to advance their position significantly (as per Racing NSW). It's either a masterstroke (with plenty of inherent risk to reject upfront cash) or it will have just frustrated the hell out of some clubs, Tabcorp, and punters (given the June 15th announcement).
SMKB
Guest
How could you interpret this as "RVL smashing Racing NSW"? (and emboldening the print :) ) From where I sit, racing in Victoria was soaring up until a couple of years ago and now is in such a mess the very viability of the great racing product that is Victorian racing is being threatened. - We have had in-fighting at the board level (read Twaits v Cattarall) - We have integrity issues (read Cobalt, Nikolic v Bailey, jockey betting scandals, Vlahos etc.) - We have a business that went broke (read TVN) Now we have the big possibility that significantly less people nationwide will be watching Victorian racing. Given that revenues are dependent upon betting turnover (Racefields), by making Victorian racing obscure to the national audience it follows that revenues will drop. People in NSW and Qld will not be switching off their local racing to watch Victorian racing on obscure portals - remembering that they now contribute to Victorian racing when they bet on it. If there is any interpretation to be made about "Victoria v NSW" here (I don't think there is), I'd say Victoria is taking a very big risk whereas the NSW approach is more conservative.
prawnmachine
Guest
Thanks Tristan. Truth, sadly, is nobody would watch the Melbourne Cup, if you couldn't bet on it; only a very tiny minority would pick Super Impose out of a line up, or the difference in the finish of the Derby from a Class 1; jockeys and trainers aren't that marketable (i.e. sexy) to younger audiences; the hosts aren't much better. Endless slo-mo of models, champagne, barriers opening, wobbly foals, and lunging necks on the post, won't change that. The difference, and why racing persists, is whether you were on or not, whether you won or not, whether what you saw might help you win next time. That's why next-to-jump is, and should remain, the absolute focus of all coverage and wagering, until such time as we can edit our own streams. Lose it and you will lose their attention - they will slowly drift off and bet on other things. Sport is by far the betting medium of choice of the younger generation. The chief reason it hasn't already dwarfed racing is there are just so many fewer opportunities to indulge. Meanwhile Tabcorp make $70M plus out of Trackside! The industry has to take the audience view of the offer or go nowhere. Unfortunately, those running the various industry f(r)actions not only ignore the importance of punters, they have a healthy disdain for those who do punt. It's an expensive way for 7 to enter the market but been so heavily invested in sport the link makes sense, and perhaps even RV get back a slice of what they have so dearly missed. So don't waste all the energy and effort on trying to make racing entertaining - make betting and winning on racing entertaining. That's really what we all want, isn't it?
Tristan Rayner
Editor
SMKB - That's blatantly untrue and I'm not sure what you're getting at given this and this. The point is, how many punters how many are watching via the Racing NSW web site? This is all about TV rights. Racing NSW's digital rights are non-exclusive. This situation has everything to do with TVN, which was Racing NSW vs Racing Victoria/clubs with Tabcorp deeply involved, too.