British racing’s £307m media rights 10-year contract with the attheraces Consortium is in jeopardy after confirmation came on Thursday that the broadcaster gave 90 days notice of its intention to terminate the deal back in October.

The contract stipulates that the gross margin on Tote bets must be 20% during any three-month period, but the margin fell below this figure after the Tote decided to reduce its take-out on some bets last year.

Attheraces’ decision to quit will depend on whether or not a compensatory deal can be negotiated before the 90-day period runs out next week. But such a deal would mean that the 49 racecourses which signed the original deal could see a drastic fall in income.

Smaller independent racecourses would be hardest hit and could be forced to pay back some money that they have already received from attheraces, with potentially devastating results.

The two sides – British racing and attheraces – have seven days in which to renegotiate the agreement. Thereafter, attheraces will have a further 30 days in which to decide whether or not to abandon the deal entirely. The stakes are high, though, since the broadcaster has already invested millions in setting up a satellite channel and associated systems that it would be reluctant to abandon.

Ian Hogg, managing director of attheraces was noncommittal in a statement regarding the negotiations: “We are in ongoing confidential discussions with the RCA and we are not in a position to comment on the specific detail of these negotiations. We hope to be able to resolve these issues as soon as possible.”

But there is little sign of progress in discussions so far, and this, combined with the fact that attheraces’ intention to quit the deal has only just come to light, has caused some confusion in the racing world.

While attheraces will be desperate to reduce payment due to the courses, having initially paid what was widely believed to be too high a price for racing’s media rights, the courses will be desperate to maintain their current rate of income.

Tom Earl, spokesman for attheraces, remained positive on the matter in spite of what appears to be a deadlock, saying: “We are confident of a positive outcome to these negotiations.” Attheraces stressed that it remains “firmly committed to the future of UK horseracing.”

The Racecourse Association, which represents Britain’s courses, has been in regular dialogue with attheraces about the agreement but was being equally cagey. “If issues have arisen in relation to the Tote, these are to be resolved between the RCA and attheraces by good faith negotiations. To comment any further would upset the delicate balance of these negotiations.”