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The battle being fought
between TabCorp and TVN over the value of vision rights to show racing in
agencies illustrates all that is wrong with an industry funding model based on
one monopolistic wagering provider.
First lets look at the
negotiating style employed by both sides.
For its Victorian agencies
TabCorp offers $219,000 as an opening bid for a service which it used to pay Sky
Channel more than $2 million for. TVN sticks out for its $2.1 million and
TabCorp, suddenly and with no great force applied, ups the bid to $1.265 million
"a
figure we believe is fair and reasonable", according to a
TabCorp spokesman.
Given that this clearly makes the initial $219,000
offer unfair and unreasonable, the
sudden jump to $1.265 million can only encourage TVN to think that there might
be another million or so in the kitty somewhere.
But wait there's more.
In an effort to kick
proceedings along and make himself something of a hero, Racing Victoria's Robert
Nason offers to kick in the $900,000 or so difference as an inducement to
TabCorp and TVN to kiss and make up.
So here we have the somewhat
ludicrous sight of Racing Victoria taking $900,000 out of its left hand pocket
and putting it back into its right hand pocket and trying to make everyone
believe that the TV rights have been "sold" to TabCorp for $2.1 million, which
is TVN's asking price.
While this game has been going
on, Nason has also persuaded the Victorian government to pass legislation
prohibiting a wagering organisation from displaying saddlecloth numbers and
horse names for Victorian races without permission from Racing Victoria.
This is supposed to prevent
the "parasite" corporate bookmakers from betting on Victorian races without
paying a product fee.
However, the corporate
bookmakers thought they were in the process of negotiating a product fee with
Racing Victoria's designated agent, the Australian Racing Board, which has not
communicated with Association of Australian Bookmaking Companies (AABC)
for months. We last
wrote on this issue at the end of May and surprisingly, the AABC still has
not heard back from the ARB, even to let them know that negotiations have been
terminated, leaving the AABC in limbo.
Now the Sydney Morning Herald
reports that Racing NSW CEO, Peter V'Landys wants the New South Wales government
to enact similar legislation.
On one level it is somewhat
pathetic to see racing bodies running to State governments to put in place laws
to force wagering operators to negotiate with them over product fees. The
failure of the ARB to conclude an arrangement with the AABC appears to be at
least as much an industry failing as it is a bookmaker one.
On another level, giving
Racing Victoria what it wanted creates a degree of public accountability to that
body which it may ultimately prefer not to have.
What this means is that by
making it illegal for a wagering operator to bet on Victorian races without
Racing Victoria's permission, it creates a requirement for that permission to
not be unreasonably withheld.
In other words, Racing
Victoria cannot just refuse to negotiate as it appears to have done with the
AABC. More to the point, it cannot just think of a number and double it when it
comes to setting an appropriate fee. And how does Racing Victoria explain why a corporate bookmaker should pay it a fee when Unitab for instance does not?
Which brings us back to the
TabCorp/TVN issue.
Clearly the value of the TV
rights for Victorian and Sydney racing is not fixed in concrete. From TabCorp's
perspective they are worth somewhere north of $219,000, but less than $2.1
million. Nason's offer to subsidise the cost by $900,000 can only have the
effect of discounting the rights value by 40% or so. Not a good signal to send
if you have a piece of legislation going through Parliament which means that you
have to negotiate with other wagering operators in a fair and transparent
manner.
Because Nason's stance can
only mean that whatever the data rights are worth to corporate bookmakers is 40%
less than they they were a few weeks ago. In any event they are worth a great
deal less than the vision rights. Racing Victoria and TVN are also clearly
sending a signal that they are prepared to negotiate commercially without the
crutch of legislation to support them. Why then does Racing Victoria need an Act
Of Parliament to support its negotiations with corporate bookmakers for fees of
a much lower level?
While all this bickering is
going on, the real game has moved elsewhere.
Online poker firm Party Gaming
has gone public in the UK with a market capitalisation close to £5 billion,
making it worth nearly as much as TabCorp. More to the point, it did not exist 5
years ago.
How many thousands of
potential Australian racing fans are now playing poker online with Party Gaming?
How many existing racing fans now prefer to bet in the online, challenging
gambling environment provided by Party Poker, which pits player against player
rather than some mindless machine? Does Party Poker take 17% of your money (with
rounding) before paying out the winning players?
How badly does the racing
industry's preferred gambling partner compare on every level from technology, to
value for money and mental stimulation?
Wagering firms around the
world (including TabCorp) are moving their operations to the internet and
towards activities which don't demand a product fee. Why is Australian racing
making it so difficult for operators who like racing to expand their online
product offering? Even if no product fee was to be paid, racing would still
benefit from increased exposure and the fan creation capacity which comes with
it.
When wagering operators are
also prepared to pay a product fee, why play stupid games like "no talkies" and
go running to the government for help?
Instead of demonising them,
how much better off could racing be if it explored co-operative ways that
corporate bookmakers (and even heaven forbid Betfair), could help racing to
attract today's technology savvy young punters? Their life choices are still
being formed. The lifetime value of such fans is incalculable but racing seems
incapable of understanding this.
Can someone please show some
leadership?
© 2010 Published 06/07/05
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