In a move that clearly demonstrates the present and future value of horse racing and interactive wagering on home television, United Video Satellite Group of Tulsa, Oklahoma, is buying control of ODS Technologies, L.P. and its Television Games Network brand for more than $30 million.
The action comes as a result of an arbitration proceeding in which the three-member panel used the great equalizer—money—to resolve a series of ongoing disputes between ODST and United Video, which previously was a 10% limited partner in the deal. After months of testimony, the panel established a bidding process for the company that resulted in United's apparently successful offer to purchase the equity of the other partners, including ODST's primary financial resource to date, Ventures in Communications. Ideally, USVG could be a major catalyst for the Television Games Network, since United Video is owned by the huge cable operator Tele-Communications Inc., or TCI, which in turn has become increasingly involved with Rupert Murdoch's giant News Corporation in recent months. In recent weeks, United Video has been at the center of a $2 billion deal to put News Corp.'s TV Guide and United Video's Prevue Channel together.
United Video's aggressive move into racing validates two factors: its obvious belief in the future of racing on television, and the extraordinarily effective job done by the ODS team, led by its vice president of business affairs (and former HTA executive assistant) Tom Aronson, in putting together a franchise of the nation's leading thoroughbred tracks to support the TVG network. United Video's decision to buy is further evidence of its strong belief, since the exclusive 'Founders' Circle' contracts signed by 12 tracks -- including Churchill Downs, Hollywood Park, Gulfstream and Santa Anita—reportedly do not automatically convey with the deal. If they do not, it would mean that United Video will need the agreement of those individual tracks to keep the franchise and TVG together as a package. Given the power on both sides of the table, such an agreement would seem strategic, sensible and likely, and could supercharge TVG in its quest to bring quality horse racing entertainment—including harness racing—and interactive wagering into homes worldwide.
Strengthening its predominant position in that quest, TVG announced late last week that it has successfully concluded negotiations with the National Thoroughbred Racing Association for a five-year agreement, making TVG the NTRA's first major corporate sponsor and giving the network exclusive sponsorship rights in the interactive media category. That agreement also calls for TVG and NTRA to jointly fund the critical legislative initiatives around the country necessary to open the home wagering market.