The racing industry has found itself in the midst of yet another crisis as it was confirmed yesterday that attheraces was ending its media rights agreement with 49 UK racecourses.
Attheraces has served 60 days notice on the Racecourse Association (RCA) to terminate the £307million, 10-year media rights contract signed in 2001, and has already started renegotiating the deal with the individual racecourses.
The broadcaster was quick to blame the RCA, saying that negotiations had been unproductive and that there had been fewer meetings with the RCA than the company would have liked and the RCA spent most of the negotiation period involved in debate about the validity of the process.
The RCA has expressed its regret at the termination of the deal. Chairman Keith Brown responded to attheraces accusation, saying: We are driven to the conclusion that attheraces is utilising the Tote take-out rate as an excuse to get out of the media rights contract and seek to strengthen its negotiating position with courses or groups of courses.
The attheraces contract stipulated 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.
While the true extent of the repercussions of the termination is not clear at this stage, the outlook could be bleak for some of the racecourses concerned.
The courses may be forced to repay some of the money they have already been paid by attheraces. In addition, the courses will have to be persuaded that, in the long run, it is in their interests to accept less money for TV rights, even though it will, inevitably, result in smaller prize-money.
Alan Delmonte, communications manager at the British Horseracing Board, the governing authority for British Racing, has attempted to calm any ensuing panic.
Alan says: It is important to remember firstly that the bulk of the sports overall income from data and pictures emanates from sources other than attheraces, and secondly, that it is attheraces express desire to secure the long-term viability of the channel and to maintain its relationship with British Racing.