A dispute over betting revenues has left British betting consortium attheraces plc trying to renegotiate its U.K. media rights agreement. A Thursday deadline for reaching a new agreement came and went with no new deal.
attheraces, a joint venture between Channel 4 Television, BskyB and Arena Leisure Plc, secured the media rights to 49 of the 59 British racecourses for 10 years, starting July 1, 2001, for £307 million.
Insiders have the opinion that the group heavily overpaid the Racecourse Association (RCA) and is now trying to bail out of the agreement.
A paragraph in the original agreement states that when Tote revenues drop below 20 percent for 90 consecutive days, the contract becomes null and void. The partly state-owned Tote, a system introduced to Britain in 1929 to offer pool betting on racecourses, reduced its profit margin to attract more players.
The 90-day limit was reached Oct. 24, leaving a second deadline of Jan. 22. Arena Leisure noted on the 23rd that "the announcement issued earlier by attheraces regarding the original media rights contract negotiated with the RCA, acting on behalf 49 U.K. racecourses (GG Media is the media rights-holder to the other 10 of Britain's 59 racecourses) under the terms of the contract the deadline date for renegotiating the contract has now been passed, and the RCA and attheraces have not reached an agreement. A Board meeting of attheraces is scheduled and further announcements will be issued in due course as appropriate."
Live coverage of over 20,000 races is planned by attheraces for 2004.
Arena Leisure Plc's Interim results for the six months ended June 30, 2003:
- Group turnover increased by 22 percent to £19.1 million (2002: £15.6 million).
- Group EBITDA increased by 114 percent to £4.1 million (2002: £1.9 million).
- Group operating profit increased by 209 percent to £3.2 million (2002: £1 million).
- attheraces losses reduced to £5.6 million.
- Pre-tax loss reduced by 55 percent to £2 million (2002: £4.5 million).