Now a one-horse race for Melbourne Cup broadcast rights after Seven West Media withdraws

Seven West Media has withdrawn from the bidding process for the Melbourne Cup broadcast rights, leaving Nine Entertainment in the box seat.

Major disagreements have broken out among Victorian racing officials as a result of Nine Entertainment Co moving into the box seat to claim Melbourne Cup broadcast rights in what could be a cut-price deal.

Nine is now the only bidder left in the race for free-to-air rights to the race that stops the nation after rival Seven West Media told race host Victoria Racing Club it was frustrated by the bidding process and was withdrawing its bid.

The move, revealed by The Australian online on Thursday, means Nine is likely to clinch a deal as soon as next week, though deals between the VRC, Nine and wagering giant Tabcorp still need to be ironed out.

Tabcorp has been brokering a free-to-air deal for the VRC, having struck an agreement – which is yet to be finalised – with the VRC for all its domestic and international broadcast rights. It then has to deal with one of the ­networks under a sub-licensing agreement, given the Cup is on the federal government’s anti-siphoning list.

In more recent weeks, Tabcorp has left much of the negotiations with Seven and Nine to the VRC, which is ditching incumbent broadcaster Network 10 at the end of its five-year $100m cash and contra deal following the 2023 race this November.

Tabcorp is understood to have offered the VRC, the operator of the famous Flemington racetrack that hosts the Melbourne Cup, about $25m in cash annually for all its rights and would then offset some of that cost by onselling the free-to-air rights.

Multiple sources say Nine has offered the VRC about $4m in cash annually for the free-to-rights, slightly above Seven’s bid that has now been withdrawn.

There has been a strong preference for Seven to gain the Cup rights by Tabcorp and governing body Racing Victoria, which owns the Racing.com broadcast service, given Seven broadcasts racing on Saturdays every weekend of the year.

Victorian government officials have also indicated a preference for Seven. The Victorian government helps funds racing in the state via its exclusive wagering licence, currently held by Tabcorp, and other measures including major event spending.

But the VRC wants Nine to showcase the entire carnival, including coverage of fashion contests and celebrity appearances, rather than share race day coverage on Seven with races in Sydney and Brisbane – which would likely stimulate more wagering.

Nine also does not want Racing.com to cover the Cup carnival given it is carried on free-to-air via Seven spectrum.

This in turn has angered Racing Victoria officials and those from other racing clubs Melbourne, who have expressed concern that a racing-owned channel would not show what are usually the biggest race days of the year in Melbourne.

As first revealed by The Australian earlier this year, Tabcorp has taken control of the entire suite of Cup rights, including digital, international and pay-television rights, as part of a deal recently struck with the VRC.

Tabcorp also has a sponsorship contract with the VRC at Flemington. Its overall deal with the VRC, and also that of the free-to-air broadcaster is slated to run from 2024 to 2029.

Free-to-air networks would be required to have Tabcorp’s TAB brand as 50 per cent of all the ­betting advertising inventory and its betting odds would be integrated into the coverage. (Tabcorp and Ten currently have a similar arrangement.)

Tabcorp’s prospective deal with the VRC is not yet finalised, though are likely to be agreed to by about mid-September unless further complications arise.