SAVILL WRONG ON MEDIA RIGHTS
published in The Racing Post, April 25, 2001

As the GG Media deal with smaller racecourses goes unconditional, David Holdgate, Chief Executive of SIS, clarifies the impact on racing of alternative media rights sales.

Self-sacrifice is always easy - when it's the other chap you're recommending it to. The GG-Media offer to the smaller racecourses delivers such huge financial advantages that its opponents have been forced to appeal for it to be considered "not just in money terms". The smaller courses should reject the offer, they argue, for the good of racing as a whole.

There are two flaws to this argument. First, it is not the business of the smaller courses to lay down their commercial lives for the benefit of their bigger brothers. They have responsibilities to their shareholders, and there is no question that the GG-racing deal simply makes the best financial sense for them. But secondly, and perhaps more important, the idea that a second media rights deal will somehow undermine racing's ability to negotiate simply does not stand up.

At SIS we do not represent some narrow sectoral interest. Our very position as the gateway between racing and betting means that we are committed to the concept of a united and healthy racing industry, and we would do nothing to undermine that.

We are absolutely in favour of presenting a united front to Government on the levy replacement and of the bold plans to improve the racegoing experience on the track. It must be realized, however, that racing is intertwined with betting - indeed is underpinned by it. So, if racing must present a united front, it needs to present it with bookmakers, not against them.

To do that, there needs to be some coherence and sense of urgency. At times, though, it seems that racing has descended into tribal squabbles, whether over demands for cash, or over perceived threats to the power and influence of individuals and the organisations they lead.

The smaller courses are being told to think of racing as a whole. But it is because the Go Racing bid does not serve the interests of racing as a whole that this situation has come about. Peter Savill says he was not surprised at the emergence of GG-Media. Nor should he have been. The financial pie had been sliced to the benefit of those with the biggest plates. For the smaller courses there were not much more than crumbs on offer, but they were being told to bite their tongues and accept the deal for the good of racing.

But the idea that the smaller courses should placidly accept the (very) short end of the stick "for the good of racing as a whole" was always a spurious one

The Levy, and whatever replaces it, will always depend on a substantial contribution from bookmakers. But the GO Racing deal, with its projected ownership of the media rights and aggressive plans to challenge traditional betting markets will make it far more difficult for bookmakers to make levy payments at anything like the current level. A decline in levy receipts can only impact badly on any levy replacement. Thus the grand plan to raise more money for racing was likely to lead to exactly the opposite result

When GG Media approached us at SIS to ask if we would be interested in bidding if their approach to the smaller courses was successful, we had been waiting for more than a year for the RCA to respond to our offers. Racing, and the RCA's members deserve better than this. The introduction of a little competition into the process may prove a salutary and healthy experience.

The heart of the BHB's argument against selling the media rights of some racecourses to an alternative to Go Racing is that it would undermine the levy replacement.

Let's be quite clear here. Nothing about the GG-racing offer or the SIS bid denies the opportunity for levy replacement negotiations, although it may be uncomfortable for those who believe that only one formula - their formula - can deliver the effective replacement. All that is on the table here are media rights, 'unbundled' in the jargon of broadcast services. We are not opposed to the basic idea that media rights should provide a commercial alternative to the levy. What we are opposed to is the idea that there should be one seller (the BHB) and one buyer (Go Racing). Indeed, it could be argued that by introducing competition into the sale of media rights, the end total could be more than the BHB ever dreamed of.

An important part of Peter Savill's recent article in the Racing Post centred on attacking SIS. Yet, if you are talking of the good of racing as a whole, then SIS is one organisation which can be said to have contributed to that, providing a vital link, and service to both racing and betting. By even the most objective measures, SIS have a superb history of top quality service and unbroken transmission. Since 1987, we have delivered a continually improving product. There has been an increased volume of coverage, more races at more meetings, coordination of race times, uninterrupted commentaries and overseas racing.

This means, at today's prices, SIS has contributed about £200 million pounds to the RCA. This is not to mention the increased levy which has resulted from betting on our overseas racing coverage.

We introduced our evening service on an optional basis, allowing customers the choice of opening or not and we introduced the Sunday service on the same basis. And we did it despite opposition from some of the major companies - including some of our own shareholders. Our commitment as a company is to all our customers.

What too many in racing do not seem to realize is that speed is of the essence. Massive investment in new technology will be a must for anyone in the race transmission business. SIS is about to commence a digital roll-out to re-equip the transmission and receiver equipment throughout the estate of 9,500 shops. This will involve a capital expenditure programme of more than £30million over the next 2 years.

We will replace and upgrade production and transmission facilities at SIS to improve the range and quality of the service we supply. We will move transmission to a different, digital, satellite transponder. We will replace the dish and receiver in each shop.

If racing wants to catch the wave of the future, it must not stand in the way of multiple media rights sales. It cannot afford to become hung up on just one version of a grand plan. It has to be flexible in its interpretation, encourage it, use it, understand it. We can then all get to the same destination if we stand together.