Betfair's TVG acquires HRTV
Betfair Group plc ("Betfair") has today announced that its subsidiary TVG has acquired the HRTV horseracing television network from The Stronach Group. As a result of the acquisition, TVG now has long-term television rights to the racecourses owned and operated by the Stronach Group.
The television operations of the Stronach Group's HRTV will be combined with Betfair's TVG network. Following the transaction, Betfair will own 100% of the equity in the unified television platform. As part of the acquisition, TVG has acquired broadcast rights to all races from Santa Anita, Gulfstream Park, Pimlico, Golden Gate Fields and Laurel Park for a term of seven years.
Purchasing HRTV and thereby securing these long-term rights strengthens TVG's ability to drive incremental wagering on its advanced deposit wagering platform and is expected to lead to additional advertising and distribution opportunities.
Betfair will make an initial payment of $25 million and estimates that it will pay further consideration totalling $47.8 million over the seven-year period, although the total consideration is dependent upon TVG's future handle. Based on projected future cash flows, the present fair market value of these payments is estimated to be $56.3 million. In the last twelve months, under previous agreements, TVG paid $4.3 million in television fees to HRTV related to television content, including The Stronach Group racetracks, for which HRTV has held exclusive rights. This transaction eliminates the need for TVG to pay those television fees.
In the year ended 31 December 2013, HRTV had revenue of $9.5 million and losses before tax of $3 million and, at 31 December 2013, had gross assets of $2.5 million. It is anticipated that the transaction will be earnings neutral for Betfair in year one and accretive thereafter.
Betfair CEO Breon Corcoran said: "This deal strengthens TVG's position as a significant player in the US horseracing industry, bringing together the US' leading racetracks under a single TV network for the first time.
The enlarged TVG operation will now show the most exciting racing action globally whilst offering a world-class betting experience. We believe this is a very compelling proposition for our customers".