02/18/2015 12:10PM

TVG acquires lone television competitor HRTV


Television Games Network, the most widely distributed live-racing broadcast channel in the U.S., has acquired its only television broadcast competitor, HRTV, and will gain the exclusive broadcast rights for the racetracks owned by the Stronach Group for seven years, the companies announced Wednesday.

The acquisition is likely to be greeted warmly by TVG’s existing customers, allowing for live television broadcasts of races from Santa Anita in Southern California and Gulfstream Park in Florida for the first time in a decade. TVG, owned by the British-based exchange-wagering company Betfair, is currently available in 35 million households, and it typically broadcasts six to eight live races an hour from racetracks across the country.

Scott Daruty, the president of HRTV, said that both networks will continue to operate, but that the networks will be coordinated out of TVG’s Los Angeles headquarters and will no longer carry the same programming. Daruty likened the arrangement to ESPN and ESPN2.

“I think this is a very good thing for the racing industry,” Daruty said. “We’ll no longer be showing the same thing on both channels, and the best content will be available to everyone.”

However, Daruty acknowledged that TVG does not yet have any agreements with satellite or cable networks guaranteeing the addition of a new channel. HRTV has limited distribution compared with TVG, which is available in sports packages on both DirecTV and Dish Network and many national cable providers. Though Daruty said details have not yet been worked out on which tracks will be broadcast on which network, it’s likely that TVG will carry the most popular signals due to its much wider distribution.

TVG and HRTV both use live broadcasts of races to drive betting to their associated account-wagering platforms. While TVG’s account-wagering operation carries the same name, HRTV promoted the account-wagering operation XpressBet, owned by the Stronach Group. XpressBet, which provides account-wagering services to Daily Racing Form, is not a part of the transaction.

In a letter to its employees obtained by DRF, HRTV officials said they began exploring a “merger” with TVG because of concerns over HRTV’s ability to secure broader television distribution for the Stronach Group’s racing signals.

“Satellite and cable networks have continued to consolidate, making it harder to persuade them to carry and show two separate horse-racing networks,” the letter said. “This consolidation of carriers looks to be an accelerating trend. Therefore, we felt that the best way to assure continued, and even expanded, viewership of our horse race tracks was to enter discussions with TVG to seek to combine our respective networks.”

TVG will pay the Stronach Group $25 million initially for HRTV’s assets, according to a release from Betfair, a publicly traded company. The deal also will require TVG to pay ongoing fees to the Stronach Group for the broadcast rights to its racetracks, which Betfair estimated at $48 million over the next seven years.

Officials for both companies stressed that TVG’s effort to obtain high-definition slots with satellite and cable providers was an important component of the deal to merge. TVG has built an HD studio at its headquarters in Los Angeles and has urged racetrack partners to upgrade to HD equipment, though it has not yet been successful in gaining an HD slot on either major satellite provider or outside of several small local cable markets.

“I have to say that I’m extremely impressed with their state-of-the-art studio,” Keith Brackpool, chairman of the Stronach Group’s West Coast operations, told the California Horse Racing Commission at a meeting Wednesday. “At The Stronach Group, we’ve spent a lot of money for facilities for live racing. It was starting to become a fairly obvious marriage here. The last three months of putting this together have been extraordinarily complicated. We’re excited about it.”

HRTV was started in 2003 as a competitor to TVG, which was then the only horse-racing network on television. At the time, HRTV was owned by Magna Entertainment, a publicly traded company controlled by owner-breeder Frank Stronach that later went bankrupt. The Stronach Group acquired the company as part of an acquisition by Stronach of the assets of Magna Entertainment’s successor, MID, which also went bankrupt.

In 2013, according to Betfair, HRTV had revenue of $9.5 million from rights fees and advertising and a pretax loss of $3 million, with assets valued at $2.5 million. One of HRTV’s largest revenue sources was TVG, which paid HRTV $4.3 million a year for the the internet-streaming rights to signals controlled by HRTV.

“This deal strengthens TVG’s position as a significant player in the U.S. horse-racing industry, bringing together the U.S.’s leading racetracks under a single TV network for the first time,” said Breon Corcoran, Betfair’s chief executive, in the release announcing the transaction. The release said that Betfair believed the deal would be “revenue neutral” for the company based on higher handle on the Stronach Group signals.

Churchill Downs Inc. acquired a 50 percent share in HRTV in 2007 when it began building its account-wagering company, twinspires.com. Churchill sold its half-share back to the Stronach Group last year as part of a deal giving the Stronach Group the rights to operate Calder Race Course’s racing operations for the next six years. Twinspires.com has gone on to become the U.S.’s largest account-wagering company.

Churchill Downs Inc. also owns Churchill Downs in Louisville, Ky., Arlington Park in Chicago, and Fair Grounds in New Orleans. Officials of Churchill Downs did not immediately respond to requests for comment.

Santa Anita and Gulfstream have always been two of the most popular signals in the country among bettors, but the two tracks’ importance on the national racing scene had expanded over the last year due to upheavals on each track’s racing circuit. In 2013, Hollywood Park closed, allowing Santa Anita to pick up an additional two months of racing dates each year. In Florida, the deal between the Stronach Group and Churchill Downs Inc. has resulted in Gulfstream expanding its meet from four months a year to 10 months. 

In its letter to employees, HRTV said some of its current employees would be offered positions at the combined network or other jobs at the Stronach Group, though others will be let go “where the right role is not available.”

In contrast to TVG, which devoted almost all of its airtime to live racing broadcasts and commentary, HRTV broadcast numerous pre-produced features on racing topics and the sport’s history. The network won three Eclipse Awards for programs produced by the network’s staff and an additional two Eclipse Awards for independently produced broadcasts that aired on the network.

Betfair acquired TVG in 2009 as part of a strategy to gain a foothold in the U.S. in case exchange wagering or other forms of gambling were legalized. The acquisition has allowed Betfair to lobby state legislatures for bills approving exchange wagering, efforts that have been successful in California and New Jersey.

Despite the passage of those bills, Betfair has not been able to launch exchange wagering in California due to a lack of agreement between all racing constituencies in the state, while its effort in New Jersey has been stalled by a delay in approving rules to govern exchange wagering. In addition, many legal experts have questioned whether exchange wagering runs afoul of federal regulations prohibiting bookmaking.

Exchange-wagering platforms allow customers to accept wagers from other customers on sporting events, including horse racing. Because customers can bet on horses to lose, the platforms have raised concerns about race fixing, though Betfair has countered that it voluntarily alerts regulators to suspicious betting patterns.

– additional reporting by Steve Andersen

Hugh More than 1 year ago
when I have TVG on, I use the mute button until the races come on.
Anonymous More than 1 year ago
What I was afraid would happen did. TVG sacked most of the on air talent of HRTV and replaced them with their clowns.
johhnyoct More than 1 year ago
Really don't think you ever watched TVG, they far better talents without a question. Please watch TVG and open your mind alittle.
gregthegreat50 More than 1 year ago
I think it is a joke the best programs against the odds the edge and all the rest I look forward to those show,s . Have not bet since don't even no if I will bet the derby. Paul mr baseball can't pick his nose and Rick mr personality and worst handicapper of all time Todd needs go back to fla. miss hrtv and the great cast. They have a least some personality
Anonymous More than 1 year ago
This merger is a joke. I have been a long time horseplayer and I am done. I haven't placed a bet in a month. Horseracing always claims it needs more customers but instead they lost one. I turn on HRTV and went from major tracks to Turfway and Hawthorne? I have a Twinspires account but refuse to watch on a computer when I own a 60 inch TV.
johhnyoct More than 1 year ago
I'm not sure you call yourself a horseplayer when you can't see talent. TVG is bring in a lot more customers so one loss has been replaced with 100 more members. You need to tune to TVG for the major tracks with better people.
Dee Englehart More than 1 year ago
This merger has angered many fans including me. Not only is HRTV not showing any major races anymore, the commentators that were there for years have been let go. The team at HRTV were some of the most knowledgeable people in the business, they were personable. Since this team of commentators are no longer on the air, I watch races on Twin Spires and CalRacing. I hate watching on the computer but I refuse to watch TVG because I don't like the commentators and I don't like the fact that they are all about wagering. Plus I don't appreciate watching people attempting to be comedians while they give the rundown of the races. With all due respect to Paul, I don't want to get horse racing advice from a former major league baseball player. I'm sure he wouldn't want to get baseball advice from professional basketball players. I don't like the fact that they show some of the races at the finish instead of on tape delay like they always did on HRTV. If people at TVG were smart, they would actually read all the negative comments about this merger on their Facebook and Twitter pages. I also know there are fans that have sent letters and emails to TVG plus there is a petition on Change.org to save HRTV. At the Eclipse Awards, the call went out to everyone in the sport to embrace the fans and get them more involved in the sport but all this merger has done is alienate fans. My hope now is that Laffit, Kurt, Peter, Michele, Aaron, and Jeff find a way to start another horse racing channel to compete and overtake TVG because I know people will tune in to watch. I just don't know what is it going to take for TVG to realize that this is not what the people want. When are the higher ups at TVG going to start caring about what the fans want. When is someone going to listen?
johhnyoct More than 1 year ago
TVG was the only network that gave you picks, HRTV only talked about non-racing things. Maybe they would give a pick when there loading into the gate, not too help.
Mary Campbell More than 1 year ago
I am sickened by this change. I enjoyed watching the Player with Aaron and Jeff. They are 2 of the best in my opinion, I loved Race Day America. I also liked the Horizon. So does anyone know who lost their jobs?
Philip More than 1 year ago
Keep Geno and "the Paulie Man" and dump Jeff Siegel? What? Are you kidding me? Schrupp is too full of himself and gets to be irritating very fast. The Mig and Zoe on "The Horizon" will be missed. Pincay has great presence and Hoover often has some good insights. Can do without Lurie and White but the rest of the HRTV crew was way better than the TVG crowd.
judy More than 1 year ago
This is enough to make me sick. HRTV- tho smaller -was more polished and professional and had the best information. All their shows second to none and now TVG thinks all HRTV fans will gladly go along with them. I , for one, will not. My cable provider carried both stations and despite TVG having the better feed with HD, I still preferred HRTV with Kurt, Jeff, Laffitt, Zoe, etc. Now what is left of HRTV is a shame. And to add insult to injury ,it is now populated with TVG clowns. I need a drink.
Rick Vercruysse More than 1 year ago
Rick VercruysseLess than a minute ago rick in spokane cant believe HRTV is gone and for you to put tvg in as the only broadcaster of horse racing is terrible! the tvg crew are the most egotistical hosts on tv ! you could have at the very least have kept the shows like "the edge" "against the odds" and "the player". wont watch or wager with tvg so you lost this customer!
Rick Vercruysse More than 1 year ago
rick in spokane cant believe HRTV is gone and for you to put tvg in as the only broadcaster of horse racing is terrible! the tvg crew are the most egotistical hosts on tv ! you could have at the very least have kept the shows like "the edge" "against the odds" and "the player". wont watch or wager with tvg so you lost this customer!