Seven Network could snatch Tabcorp TV racing rights: sources

The negotiations between Tabcorp and TVN have fallen over after running for almost two years. Photo: Anthony Johnson
The negotiations between Tabcorp and TVN have fallen over after running for almost two years. Photo: Anthony Johnson

Wagering giant Tabcorp could have its NSW and Victorian thoroughbred racing broadcast rights snatched by the Seven Network, which is considering stepping in as negotiations between Tabcorp and racing-owned broadcaster ThoroughbredVision Network fall over, sources said.

The protracted talks between Tabcorp and TVN that have been running for almost two years fell over on Wednesday, leading the crucial races to be pulled from Tabcorp's Sky Racing.

Sky is broadcast into about 5000 pubs, clubs and TAB outlets, and is an important driver of wagering activity.

After the last agreement expired in December 2012, the parties have rolled over short-term agreements so the vision could be broadcast into venues while negotiations continued. But Tabcorp walked away from this scenario, on the basis that it was not progressing to a long-term solution.

Seven is currently paid by TVN to broadcast 25 premium race days a year. It may make an offer to buy rights, which it could onsell to pubs and clubs, sources close to the negotiations said. This could allow TVN to offer digital rights online-only bookmakers too.

The chief executive of TVN Bruce Mann has accused Tabcorp of "unrealistic" demands that have caused an impasse in negotiations. Mr Mann, a former pay television executive, said Tabcorp was demanding "to pay us less than what they pay today".

The former deal, which was agreed to in 2006 after a similar dispute pulled vision from Sky Racing for months, allows for television broadcast only. It is said to cost about $40 million a year.

Since that time, however, online wagering has boomed. Tabcorp is pushing for the deal to be extended to digital as well, to enable vision to be shown on its websites and tablet and smartphone apps too. Mr Mann said Tabcorp also wanted digital rights for its online-only brand Luxbet.

"They want more rights, they want the inclusion of digital and they want to pay less than they're paying today and they want an eight-year deal," he told Fairfax Media.

The negotiations are fraught, given the intricately linked nature of wagering and racing. TVN is owned by five race clubs, but reports to a board that includes representatives from Racing NSW and Racing Victoria. Both of those bodies operate wagering in their states in joint ventures with Tabcorp.

Seven did not respond before deadline. A racing source said a deal with Seven would be unlikely as it would jeopardise wagering revenue, which funds the industry.

At the same time, however, sources said that Racing NSW is considering breaking away from TVN to negotiate with Tabcorp separately.

Mr Mann said that Tabcorp had also attempted to link "unrelated" issues to the broadcast deal. These included the option of penalty payments if the state bodies sold international rights without Sky and protection from any future increases in race fields fees, charged by the racing authorities. On fees, Mr Mann said it was "wildly inappropriate to connect that into this entity".

A separate source said Tabcorp had demanded penalties of $4 million from each state if the international rights clause was breached.

Tabcorp's Media and International executive Brendan Parnell was not available for an interview on Thursday. However, on RSN radio's Racing Ahead program he said Tabcorp wanted a deal that would provide the "best wagering outcome for racing".

"It's unfortunate from a customer perspective that what we believe was an attractive package wasn't accepted by TVN yesterday," he told the show.

Deutsche Bank analyst Mark Wilson said the dispute could drag down Tabcorp's earnings by 3 per cent. "When split picture last occurred in 2005-06 the impact on total wagering turnover was [about] 3.5 per cent," he said.

Tabcorp shares fell 4.1 per cent to $3.97

This story Seven Network could snatch Tabcorp TV racing rights: sources first appeared on The Sydney Morning Herald.