Clouds Gathering For TVN & Sky Showdown

By: Ryan Clark
July 27th, 2011

A battle of epic proportions is looming on the airwaves with Sky Racing and TVN locked in a stalemate over the future of television broadcasts in this country.

With the club merger in Sydney forming the Australian Turf Club, the ATC becomes a 50 percent owner of TVN along with the three Melbourne metro clubs.

As it stands now TVN has the rights to horse racing in Sydney and Melbourne.

Sky Racing has a deal with TVN to also show footage from those tracks, however that deal expires in December of 2012.

That date may still seem a long way off but already the tensions can be seen between the two parties which are both looking to increase their market share and take bigger priority in the Australian marketplace.

Already some lines have been drawn in the sand and debate has already arising in the public sector with various stakeholders arguing for an agreement which suits them best.

Chairman of the ATC John Cornish says he’s in no hurry to broker a deal though and he’s happy to let the drama play out for a while at least.

He says his major interests are in building ties with the Asian racing industry, primarily through the creation of a national TOTE.

“That should be a priority for racing. If we can get the TABs and state governments to pool the totes it will take away a lot of the support for the corporate bookies,” Cornish said.

“If we can make our tote pools considerably bulkier then we are going to engage with the bigger punters and open up a whole range of opportunities in Asia.

“If the provinces in China embrace racing, as I believe they will, the additional betting turnover into our national pool could be huge.

“Also, technology is changing so rapidly we don’t know for sure where the racing product will be broadcast in two to three years. Broadband could have a big role in racing.

“These are things we need to get a better handle on before we have to sit at the table and play hard ball with Sky Channel.

“I think we have to hasten slowly. What’s the hurry?”

There may be a little bit of hurry though, these negotiations are tipped to be a long and drawn out process if the early stance of both parties is anything to go by.

TVN Chairman Harold Mitchell says if Sky don’t come up with an offer which they deem to be fair they’ll have no issues with withholding the Melbourne races from them altogether.

As it stand there appears to be four solutions to the standoff.

The first and most likely outcome is that the two operations come together in a joint venture.

With the current tough talking that seems a while off but when all factors are considered it would be the best result for the Australian racing industry.

Secondly, Sky could sell its networks to TVN, something that TVN already pushed for with a $420 million bid earlier in the year.

Third is that the current deal is retained, just with an adjustment of funds, TVN to draw more cash from Sky.

Finally the sale could go the other way with Sky to absorb TVN.

That is by far the most unlikely of solutions and one which would shock many after the huge financial investment as well as man hours put in to build the network.

TVN is still extremely keen to buy out Sky Channel however Sky maintains their business is not and will not be for sale.

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