Melbourne Cup broadcast attracts low offers as Tabcorp plays hardball

The country’s three commercial television networks will lob lower than expected offers to secure the Melbourne Cup broadcast rights, complaining about the terms proposed by Tabcorp, which is running the process.

The ASX-listed wagering group must sublicense the rights to a broadcaster under Australia’s anti-siphoning laws and under a deal which it is working towards with the ultimate owner of the event, the Victoria Racing Club.

The Melbourne Cup is the most watched race in the local thoroughbred calendar and a major source of revenue for Tabcorp. The broadcast rights are currently held by Paramount-owned Network Ten, but expire this year. A deal is also crucial to the VRC, which is under immense financial strain and reliant on the revenues from the Melbourne Cup broadcast.

Four sources, who requested anonymity to speak freely about the process, said Tabcorp wants a 50 per cent share of all wagering advertisements during the four-day carnival, while the VRC wants to control production and commentary for the race and mounting yard feeds.

These terms, which were put to the networks, are considered unworkable by several executives including Paramount. Some also believe a sublicensing arrangement – which would run for five years from 2024 – would reduce the commercial value of the race carnival.

But Paramount, Nine Entertainment Co (publisher of The Australian Financial Review), Seven West Media and racing.com are still expected to submit offers by early next week, albeit at a lower rate than the current deal and on the condition that some requirements are removed.

Tabcorp, Ten, Nine and Seven declined to comment.

It is unclear what a reduced offer means for Tabcorp, which is hoping to secure a similar broadcast deal to the present arrangement. The company, which already owns the international broadcast rights to the marquee thoroughbred event, was granted permission by the VRC to explore interest in sublicensing the domestic rights before it agrees to sign a deal for them. Financial Review