[Kasept]

More details in TDN piece that make it more merger than 'takeover'..

TVG & HRTV to Merge

TVG will take over the operations of HRTV, which will be operated from TVG’s studio in Los Angeles, Betfair’s TVG and The Stronach Group announced Wednesday. The merger is part of a joint effort between Betfair’s TVG subsidiary and The Stronach Group to improve the quality and quantity of televised horseracing by capitalizing on The Stronach Group’s investment in an enhanced racing experience and TVG’s state-of-the-art high definition television capabilities.

The newly unified operation will feature races from Santa Anita, Gulfstream Park, Pimlico, Laurel Park and Golden Gate Fields over a seven-year period, as well as additional domestic and international racetracks. The agreement will result in the broadcast of more than 5,000 additional races from across the U.S. to be broadcast on the two networks.

"This is a very exciting step for TVG and HRTV as it enhances our ability to deliver premier horseracing content to our viewers, to show more races and to promote racing in the US," said TVG CEO Kip Levin. "With our recent investment in our new, state of the art, HD studios now complete, we’re pleased to expand our coverage of the Stronach Group tracks as part of a unified TV platform. This agreement is part of TVG’s commitment to deliver the very best in US racing, to generate incremental wagering on our advanced-deposit wagering platform and, to drive additional advertising and distribution opportunities."

"Combining the significant investments we have made in our facilities and racing content with TVG’s significant investments in television technology and distribution is the best way forward for ensuring a world class experience for all of our important customers and our fellow stakeholders in racing," said Alon Ossip, CEO of the Stronach Group.

TVG is currently available in 36.5 million U.S. homes and televises approximately 27,000 races per year. Meanwhile, HRTV is available in 19.5 million U.S. homes and airs 16,000 races per year. There is significant overlap between the two and many races on tape delay due to scheduling conflicts. The merger, which will take place over the next several weeks, will allow the two networks to broadcast 40,000 races per year.

Betfair will make an initial payment of $25 million and estimates that it will pay further consideration totaling $47.8 million over the seven-year period. The total consideration is dependent upon TVG’s future handle. Based on projected future cash flows, the present fair market value of these payments is estimated to be $56.3 million.

Under previous agreements over the past year, TVG paid $4.3 million in television fees to HRTV related to television content, including The Stronach Group racetracks for which HRTV has held exclusive rights. This merger eliminates the need for TVG to pay those fees.

Following the merger, Betfair will own 100% of the equity in the unified television operation. However, the transaction does not include XpressBet, the advanced-deposit wagering company owned by the Stronach Group.