HRTV & TVG Merge

By T.D. Thornton 

Wednesday's acquisition of HRTV by TVG will not result in immediate changes over the next 30-45 days, but as the merger is phased in, viewers can expect side-by-side channels that offer complementary programming similar to the way sports networks ESPN and ESPN2 operate on a larger scale. 

Under the terms of a jointly announced $47.8 million deal (plus future handle-based considerations), Betfair subsidiary TVG will assume control of HRTV, which is owned by the Stronach Group. Broadcast operations will be consolidated from the TVG studio complex in Los Angeles. Betfair will own 100% of the equity in the unified television operation, and TVG now has the rights to carry Stronach-owned tracks like Santa Anita and Gulfstream Park for the next seven years. 
The transaction does not include XpressBet, the Stronach-owned advance-deposit wagering company. It will remain separate from Betfair's TVG wagering platform. 

“From TVG's point of view, they're consolidating the TV stations. They'll be running two TV stations in parallel,” said Alon Ossip, chief executive officer of he Stronach Group. “From our point of view as racetrack owners, it makes sure our races will be seen nationally. It's very important that we expand our pie rather than fighting for the same pie.” 

According to a joint press joint release, TVG telecasts roughly 27,000 races per year while HRTV shows 16,000, “with significant overlap and many races on tape delay due to scheduling conflicts.” TVG officials estimated that the combined networks would be able to broadcast live approximately 40,000 races per year. 

“We actually show hundreds of races every year on tape delay because we have so many content commitments,” TVG chief executive officer Kip Levin said at the California Horse Racing Board's monthly meeting on Wednesday. “So this gives us more shelf space, and a way to figure out how to do this with a bigger spotlight on premium content.” 
Keith Brackpool, the Stronach Group's director of West Coast operations, explained to the CHRB that “the main high-definition channel will feature the premium racing, and the [racing from lower-tier tracks] will go off at a slightly faster rate on the second channel. We intend to keep two channels going. The branding of those two channels will be discussed over time.” 

Ossip said his preference would be a rebranding to “TVG1 and TVG2,” but that “TVG will decide” on renaming.

“There's two points: To show more races and to show them in the proper light,” Ossip said. “It's going to be a lot more professional than it ever was before.” 

When asked if on-air hosts would continue to nudge viewers toward the TVG betting platform, Ossip indicated that would likely be the case, but he envisioned it would be “a little less over the top.” 

According to the release, TVG is currently available in 36.5 million U.S. homes and HRTV is available in 19.5 million US homes. 

Although the two companies are spinning the merger in a positive light, it remains to be seen whether the consolidation of two broadcast networks devoted exclusively to horse racing into one entity will benefit consumers in the long run. 

According to the independent media watchdog site www.freepress.net, “the more independent outlets a community has, the more different viewpoints will be presented on the air. But what happens when there's no one left to compete? When one company owns everything…it can cut staff and not worry about getting scooped by a competitor.” 

Then again, the flip side of this argument is that the racing industry is often accused of not working toward unification, and that squabbling between exclusive rights holders is what often holds back the growth of the sport. 

Ossip said “these two channels never competed.” He framed the merger in terms that suggested the Stronach Group would be able to free up resources that had previously been spent on keeping its television network running. 

TVG, too, will be freeing up resources: In the last 12 months, under previous agreements, TVG paid $4.3 million in rights fees to HRTV related to television content. According to the release, the merger eliminates the need for TVG to pay separate television fees. 

“The Stronach Group will be focusing on what we're good at, TVG will be focusing on what they're good at,” Ossip said. “By doing this, we think there will be a much better product on the television stations. It gives us the ability to use a lot more of our resources at the track level. Everything at the end of the day comes down to enhancing the customer experience.”