HBLB Betting Exchange Consultation

[Cav]

Totally agree Ricky. How many exchange big hitters lay a full book on Betfair ffs Beyond clueless, although looking at Paul Roys performance on ATR the other week that just about sums the BHA up when it comes to betting revenue.

[jose1993]

Cav et all , this is just a smoke screen , the amount raised even if they got Betfair to pay double would be at best 15 millon …mere change

Mr Roy and his mates should look at the media rights money and have a chunk of that , as its quite meaty

I mean if we can see it why cant they ???

Ricky

Precisely. What has happened with all this "media rights" money that the racecourses seem to have pocketed? Turf TV – what on earth happened with that great boost? It’s why I’m tired of reading the whining of Roy about the Levy, the exchanges. The constant blaming the betting industry is starting to become tiresome. At least Arena Leisure are making money…..

[wit]

On this question of media rights money, Jockey Club Racecourses (Holdings) Ltd in its most recent filed accounts (y/e 31 December 2008) says the following:

-it acts as holding company for its wholly-owned subsidiary which manages and operates 14 racecourses

-its 14 racecourses are (as divided by it):

Large courses:
· Aintree
· Cheltenham
· Epsom
· Haydock Park
· Kempton Park
· Newmarket
· Sandown Park

Smaller courses:
· Carlisle
· Exeter
· Huntingdon
· Market Rasen
· Nottingham
· Warwick
· Wincanton

-the individual racecourse companies return dormant accounts so no individual allocation of figures, just aggregation for the group

-group turnover for 2008 was £95.1m (2007 – £86.9m). The 9% increase “follows an increase in racedays of 35, to 341 from 306”.

-there was additional group turnover for 2008 of £21m (2007 – £7.4m), being “share of joint ventures’ turnover – relating to the group’s joint ventures Racing UK Holdings Ltd and Amalgamated Racing Ltd [trading as TurfTV]”.

-payments received from those joint ventures in 2008 (listed as related party transactions) were:
from Racing UK – £1.5m (2007 – £689k)
from TurfTV – £10.9m (only started full trading 1 Jan 2008)

– no statement as to how the £10.9m from TurfTV compared to what had been received from BAGS/SIS in prior years. But with the increase in turnover being referred to only in the context of extra racedays, and given that TurfTV started out charging shops roughly 31/59ths of what SIS charged for all 59 courses: £6,500 as against £12,800, I’m guessing the £10.9m was basically a straight, if pro-rated, replacement of BAGS/SIS payments in 2007.

-as regards levy:
in 2008 the group accepted HBLB contributions to prize money of £14.3m (2007 – £1.1m)
but it also waived HBLB contributions to prize money of £11.3m (2007 – £22.4m)

(loans and capital grants from HBLB are each addressed elsewhere in the accounts)

difficult to know how to scale up those figures to cover all the GB courses for 2008, but a rough multiplication of (59/14) x £10.9m would suggest around £46m of bookie money for media rights reaching the courses in 2008, plus maybe another £6m of RUK/ATR money ?

would that kind of figure justify the word bonanza for media rights money in 2008, compared say to prize money from levy in the period (say between £60m-£76m) ?

(roughly assuming prize money was 66% of the total levy yield for calendar 2008, that total yield being somewhere between the 2008/9 figure of £91.6m and the 2007/8 figure of £115.3m)

£46m is a bit different from the £200m+ figure bandied about by some.

[ricky lake]

Wit , great stuff as always , however it gives food for thought , certainly the new government will have some interesting stuff to read for racing’s funding as a package its participants and donors , thing is though , between SiS and Turf TV , around 200 million is paid to the courses , which begs the argument , why do we have to pay then a daily levy grant as well ??

Surely the whole funding issue must be addressed , and then the rabble should issue fixtures and charge for them accordingly to pay for their exhorbitant costs

Currently we are engaged in the politics of spite , which as always will leave a taste and make us as an industry even more fragmented , oh for leadership with vision and perhaps a brain cell or two

cheers

Ricky

[Maxilon 5]

Thanks Wit. Excellent work as usual.

[wit]

Hi chaps

I’m trying to understand the £200m media rights figure.

When SIS sued TurfTV, the Court was told that in 2008 there were “around 8,700 LBOs” in Great Britain, of which Hills and Ladbrokes each owned “about 23 per cent”. So Lads and Hills together had about 4002 of all LBOs in GB.

The accounts of SIS for April 2008 – March 2009 say that its sales in that period to Ladbrokes were £26.67m and its sales to Hills £25.63m.

So 46 per cent of LBOs in GB paid SIS £52.3m in the year ended March 2009 (as against £54.74m for y/e March 2008). In other words about £13,000 per Ladbroke / Hills LBO.

That in itself seems very odd, because for the whole of y/e March 2009 SIS had no media rights to sell for 31 of the 59 courses.

So SIS kept on charging Hills and Ladbrokes (and by extension the LBOs of others) the same price for 28 courses as it had previously charged for 59 courses ?

The SIS accounts do caution that not all related party transactions need to be disclosed, and they do say the figures for sales are “as invoiced”, so its possible that there were undisclosed credits back to Ladbrokes and Hills (as SIS shareholders).

However, taken at face value on the info disclosed, it would seem that SIS charged Ladbrokes and Hills more than double per shop at £13,000 to what TurfTV was quoting as its per LBO charge for that period – £6,000.

Does that sound right, Barry ? What would you reckon the figures per average LBO ?

If indeed that was the case, then we seem to be talking collections from LBOs in 2008 of – assuming every single LBO of the 8,700 signed up to both services and paid full whack to each of the two suppliers – (8,700 x £13,000) around £113 million by SIS and (8,700 x £6,000) around £52m by TurfTV .

That would make £165m in aggregate collected by SIS (owned 49% by Hills, Ladbrokes and Tote, plus 7.5% by Fred Done) and by TurfTV (owned 100% by the 30 RUK courses plus technical partner Alphameric). I guess £165m two years ago is getting closer to £200m now as a figure.

But (extrapolating from the accounts of GB’s biggest racecourse owner) it seems likely that the racecourses only got to see about £46m of that £165m ?

So what happened to the other £119m ?

Is it a case of the racecourses getting only 20p from every 100p billed to LBOs by SIS, and 44p from every 100p billed to LBOs by TurfTV ?

If now two years on in 2010 the bill to LBOs is indeed upped from that £165m to £200m, how much of that are racecourses now seeing ?

something like £56 million ?

I don’t see how the racecourses would be seeing anything like £200m from SIS and TurfTV for media rights.

Or have I missed something ?

[ricky lake]

Wit , leave it with me I will ask a little bird !!!

thanks as always for your post , some very interesting stuff there

I hope Mr Roy is reading ……he might just get the idea

cheers

Ricky

[jose1993]

If now two years on in 2010 the bill to LBOs is indeed upped from that £165m to £200m, how much of that are racecourses now seeing ?

something like £56 million ?

I don’t see how the racecourses would be seeing anything like £200m from SIS and TurfTV for media rights.

Or have I missed something ?

Very interesting and worthwhile reading, Wit. I’m no expert on the media rights of Horse Racing and what value they hold, but on the ROA website Paul Dixon might give us some further clarification.

"Mr Dixon also estimated that income to racecourses from picture rights would increase from more than £60 million last year to nearly £90 million in 2013 – “it may even overtake the Levy as the biggest source of funding coming into racing”. "

So around 60 million would be right then???

[wit]

thanks ricky.

jose – yes, i guess if (again by extrapolation from Jockey Club Racecourses’ 2008 accounts as above) we add £6m per year from RUK/ATR to around £56m now from SIS/ TurfTV, we get ballpark to Paul Dixon’s £60m.

[ricky lake]

So lets assume 60 million is near enough right , why then do we need to raise another 100 million to give the courses even more ??

or have I missed something

Ricky

[jose1993]

http://www.britishhorseracing.com/resou … nd_SIS.pdf

As of 2008.

[wit]

many thanks – so basic rates per LBO in 2008:

TurfTV £6,500

SIS £11,100 (down £1,900 from £13,000 pre-TurfTV).

for the courses, maybe not be a question of raising more, just redistributing away from the bookie-owners of SIS what is already being raised but currently kept by them.

if I ran an LBO and I was not one of the bookie-owners of SIS, I think I would want to know why SIS, suddenly since the advent of TurfTV, is charging me significantly more per race.

if I owned a racecourse and I saw that LBOs are ready to pay that increased cost per race, I would be looking to cut out SIS as middleman as soon as I could and get at that extra money per LBO by selling my rights through a middleman part-owned by me, like TurfTV.

of course this will not have escaped the bookies who own SIS.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

…..In 2010 Phil Siers, ex sales and marketing director of TurfTV, made a shock move from TurfTV to SIS.

This is without doubt a major case of gamekeeper turned poacher and could mean that TurfTV’s entry into the market is now much more difficult than it may have been.

Whilst TurfTV has made great inroads into the marketplace this is thought to have occurred due to the management expertise of Siers and Alan Morcombe (TurfTV’s Executive Chairman) and the loss of Siers may mean that they are now unable to consolidate their success.

It is clear that the loss by TurfTV of live horse racing from South Africa is the first success of Siers in his new role.
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

http://en.wikipedia.org/wiki/Satellite_ … n_Services

SIS chief executive David Holdgate said: "I am delighted to be able to bring someone of Phil’s experience into the business."

http://www.thefreelibrary.com/Former+Tu … 0217017793

obviously quite good for SIS shareholders if it was to be SIS, rather than any rival, that again was able to benchmark the differential beween what was paid out to courses to buy TV pictures, and what was collected from LBOs on resale of those TV pictures.

SIS recently bought the BBC Outside Broadcast operation, further consolidating its technical dominance in uplinking.

and technically, is it not already the SIS "fat pipe" that delivers TurfTV’s (as well as SIS’s own) course pictures to LBOs?

(Racecourse Technical Services – the patrol camera operation on course – however remains owned by the BHA.)

For SIS to have leverage anywhere along the delivery pipe between racecourse and LBO would seem to be not the best of news for either a racecourse or an LBO owner who is not also an SIS shareholder.

[Never Nearer]

Turf TV was still able a couple of weeks ago to sign Ascot to a deal to March 2018, so it clearly doesn’t plan to go anywhere soon.
http://www.turftv.co.uk/ascot-sign-long … h-turf-tv/

(Is Ascot the only racecourse that straddles the ATR/SIS RacingUK/TurfTV divide?)

if I ran an LBO and I was not one of the bookie-owners of SIS, I think I would want to know why SIS, suddenly since the advent of TurfTV, is charging me significantly more per race.

At the time it lost the Turf TV courses SIS demonstrated to the satisfaction of nobody except itself and its shareholders that LBOs were, doubtless to their considerable surprise, in fact paying scarcely anything for the coverage of those tracks.

That’s a position that remains dimly illuminated following your diligent analysis on this thread. But then I don’t suppose the cover price of the Racing Post will come down if it comes to pass that there are indeed 250 fewer fixtures in 2011.

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