[Kasept]

TVG deal could lead to coordinated post times
By Matt Hegarty

Racetracks in the U.S. are more likely to coordinate their live racing schedules to avoid overlapping post times due to the recent acquisition by Television Games Network of its only broadcast competitor, HRTV, according to officials involved in the deal.

The deal will likely result in racetracks being separated into two classes, with the most popular tracks broadcast on TVG and the signals of less-popular tracks residing on HRTV, according to the officials. As a result, racetracks that are shown consistently on each network are more likely to seek separation from the post times of competitors, the officials said, in order to maximize the amount of time that viewers have to evaluate a race and place their bets.

The officials said that a greater degree of coordination will be possible in large part because HRTV and TVG will no longer show the same races on their networks, freeing up slots for 5,000 additional races to be broadcast live annually between the two networks when production operations are consolidated at TVG’s Los Angeles studio in the next several weeks, TVG officials said.

TVG, which is currently available in 35 million households, according to the network, will likely continue to broadcast 6 to 8 live races an hour, which, in an ideal world, would allow for seven to ten minutes of broadcast time between races. Because TVG currently reaches nearly double the households of HRTV, the most popular signals will be concentrated on TVG, making a Saturday afternoon in April a showcase for live racing from Santa Anita, Gulfstream, Keeneland, and Aqueduct, for example.

For some small tracks, however, the merger of the two networks will mean losing airtime on the more widely distributed TVG, creating the potential for strained business relationships. TVG officials said that some tracks have deals guaranteeing a certain number of live broadcasts on TVG, and that those deals will continue to be honored through the term of the contracts. However, the officials said they did not expect those deals to “have a lot of impact” on programming decisions.

As a result, an exact separation between A and B tracks is not likely to take place immediately, if ever, especially as some tracks tweak their live racing schedules to take advantage of empty air-time slots on TVG or HRTV.

“We have been doing a lot of work on scheduling the two networks and it is safe to say that there is plenty of quality content for both,” TVG said, in response to written questions. “As the more broadly distributed platform, TVG will continue to feature many of the tracks that it has in the past in addition to Gulfstream and Santa Anita. There will also be schedule considerations based on regional strength of distribution, availability of signals and other factors.”

Critically, perhaps, the merger will not dampen the competition between TVG’s account-wagering service and XpressBet.com, owned by The Stronach Group, the former parent of HRTV and the owner of Santa Anita and Gulfstream. According to the officials, the deal does not prevent either network from promoting its own account-wagering service alongside the broadcasts of races, so TVG will be free to drive customers to its account-wagering operation while broadcasting races from Stronach Group tracks. In addition, TVG is planning to promote its account-wagering operation on HRTV.

As with any company that owns both racetracks and an account-wagering operation, the Stronach Group retains a far larger share of the revenue from a bet on its tracks when the wager is placed through its own account-wagering service versus the account-wagering operation of a competitor like TVG. That could lead to ill will between the companies if betting begins to migrate heavily to either one of their ADWs.

The situation regarding the broadcast of content from tracks owned by Churchill Downs Inc. is also not entirely clear yet. The contract providing HRTV with the rights to broadcast live races from Churchill’s properties – Churchill Downs in Louisville, Fair Grounds in New Orleans, and Arlington Park outside Chicago – is still in force at HRTV as a result of the merger, according to Scott Daruty, the president of HRTV. But that contract specifically assigns the rights to HRTV, Daruty said, leading to questions as to whether TVG will be able to broadcast the races as well.

It would seem to be in Churchill’s best interests to have its races broadcast on TVG, but the company also operates its own account-wagering company, twinspires.com, and relations between Churchill officials and TVG have not exactly been cordial over recent years. Twinspires.com and TVG are the two largest account-wagering companies in the U.S., and Churchill Downs bought a half-share in HRTV in 2007 as a counterweight to TVG’s market power. The company sold the half-share back to The Stronach Group last year, but its live broadcast signals remained exclusive to HRTV.

Churchill officials have not responded to specific requests to clarify the status of the company’s contract with HRTV since the merger was announced Wednesday.