Racing Victoria's media rights asset can be a long-term win

The racing media rights issue throughout Australia but more particularly in Victoria and New South Wales at times looks a little like a jigsaw puzzle or a game of snakes and ladders.

I have consistently maintained that media rights are arguably the second most important asset for the industry, ranking only behind the licence to conduct race meetings.

The media rights plan proposed by Racing Victoria to the Victorian racing clubs in my view presents a fascinating strategy. It is clearly a long-term strategy where the success or otherwise of the move to Channel 7 will not be known for some many years.

I compliment Racing Victoria on its recommendation and in particular with its vision to venture outside of conventional lines and bring racing to the fore on a free-to-air channel.

From a financial perspective I suspect it will be a very costly strategy in the first few years however successful and strong businesses do not focus on the short or even medium term alone but rather on the long-term.

The Roar’s article on this matter is very comprehensive and in my view correctly sets out the facts.

In the concluding paragraphs it speaks about the New South Wales versus Victoria conflict which clearly harks back more to the Racing NSW versus TVN debate or rather debacle.

However that’s all history and at this point in time there is little or no chance for either state to turn back.

Very clearly the industry was lacking in some real leadership at this critical time. In my view John Messara as Chairman of both RNSW and Racing Australia could have done a lot more to unify the states on this critical issue. The industry needed a real leader at this point, a real captain’s knock. However, that was not to be.

What was missing from the article was reference to the Andrew Twaits factor.

Racing Victoria are fortunate to have a very clever strategist sitting on its board and I understand heading up the media rights matter.

In my opinion Andrew Twaits runs rings around his counterparts in New South Wales and has his eyes clearly on the future, a very promising future. He is unquestionably a superior intellect, businessman and comes from the top end of town. He is well-connected and respected. That’s the difference.

The real objective of the industry is to ensure that the industry’s funding is properly positioned to allow it to run properly and efficiently. That really means that costs are minimised, returns to owners are maximised and racing facilities and infrastructure meet the highest standards.

I have long held the view that the industry should own the tote. Yes Tabcorp have been and continue to be a magnificent partner, however one must not forget that under the Tabcorp arrangement much industry money i.e. punters money ends up in the pockets of those who have nothing to do with the industry. Significant shareholders include JP Morgan nominees at 21 per cent, HSBC nominees at 17 per cent, NAB nominees at nearly 12 per cent, and so on, as of 2014.

I suspect the endgame on Victoria’s media strategy is that at a point in the near future the Victorian industry together with Channel 7 will form a bookmaking joint venture – the objective being to partly return industry funds to the industry.

I believe this is the Twait strategy and guess what – he was once CEO of Betfair so he knows all about bookmaking.

I further understand that Tabcorp’s licence to exclusively operate the tote in Victoria is due for renewal or renegotiation in about nine years. It follows that one could certainly ask were Tabcorp / Sky Racing naive in its negotiations with TVN late last year.

Should the Victorian industry adopt this strategy and engage in a bookmaking/tote business on the back of a free to air coverage on Channel 7, I say watch this space.

Interesting times ahead!