Attheraces serve notice; Small courses set to suffer most as consortium pulls the plug

TELEVISION coverage of horse racing was facing an un-certainfuture yesterday after the agreement on coverage of Britishracecourses was abandoned following a drop in betting profits.

Attheraces, a consortium of broadcasters and racecourseoperators, served notice that it will terminate a (pounds) 307mcontract to provide seven-day racing coverage.

The channel is seen as a key component in bringing the weeklyrota of horseracing to British television screens and helpingcourses obtain publicity.

It said contracts would be re-negotiated individually with the 49courses currently bound by the 10-year deal, originally signed in2001, blaming a steep fall in betting profits for a shortfall inincome.

The resulting uncertainty is likely to hit small courses thehardest, industry analysts said yesterday. Although no racecoursesin Scotland are immediately affected, a drop in prize money islikely to be the first casualty of any fall in revenue.

However, one senior source in the racing industry said it wasunlikely that the channel would cease altogether, saying: "They bothneed each other. The courses need the publicity and exposure and thechannel needs income. I'm sure a deal will be worked out."

Attheraces, made up of Channel 4, BSkyB and Arena, which has a33% stake in the company and is a major racecourse operator, alsosaid it was "very optimistic" that the channel would continuebroadcasting.

Ian Hogg, managing director of attheraces, said: "Most othersports would give their right arm to have a channel showing theirproduct live seven days a week. It drives up attendances, increasesincome from the Levy, and sponsors want to see their racestelevised.

"I don't want to get into the detail of negotiations but we havewritten to the chief execu-tives of the racecourses concerned,either saying we will carry on the negotiations or asking to startnegotiations with ones we haven't already. I'm very optimistic thatwe will be here in 12 months time."

Pressure on the channel's income came from a steep drop inrevenue from the Tote, which has been forced under new taxregulations to increase its betting payouts. As a result,attheraces's internet betting arm has had margins slashed by 47%,triggering a get-out clause in the 2001 agreement.

In October, attheraces served a statutory 90-day notice on theRacecourse Association to terminate the contract and in that periodof time further discussions were held between the TV company and theRacecourse Association but no agreement was reached.

The new 60-day notice announced yesterday will mean the currentcontract ceases at the end of March.

"It is all to do with profit we make from each bet," Hogg said."When we originally offered (pounds) 307m, we were funding thatpayment to the courses by a revenue of around six or seven pencefrom each bet we took on the Tote.

"Last year, the Tote reduced their margins and that reduced ourprofit from about six or seven pence to about three-and-a-half,which halved our profit.

"From that, I am meant to pay the costs of running the channel,the courses, the loan repayments, and still make a profit. You can'tdo that if you lose half of your margins."

Nick Smith, head of public relations at Ascot, said: "We listenedto the interview with interest and we will be looking at all of theissues that arise in the coming weeks," he said.

Richard Johnstone, managing director of Ayr Racecourse, whichderives more than (pounds) 300,000 of its annual income fromattheraces, said yesterday: "It is too early to determine what theoutcome of any re-negotiation with attheraces will be. We thereforedon't have any idea what the impact of this decision will be."

However, a senior source within the Scottish racing industrysaid: "This is serious without being a crisis. It will haveimplications such as reducing prize money or putting certainprojects on hold. But we are not talking about cancelling races orshutting down courses."