Tabcorp to pay up to $40m for Melbourne Cup broadcast rights, giving Nine free-to-air deal
The race that stops the nation is heading to Nine as part of a unique broadcasting deal that the VRC has struck with wagering giant Tabcorp.
Tabcorp will pay about $35m to $40m a year for Melbourne Cup broadcast rights in a “groundbreaking” deal the wagering giant has finally clinched with the Victoria Racing Club.
As part of the deal, Tabcorp will get some revenue back from sublicensing the free-to-air rights to Nine Entertainment and about 60 other countries, and also gains a collection of other rights and sweeteners from Melbourne Cup host the VRC.
The six-year deal, details of which were first revealed by The Australian last year, means the broadcast rights for a major Australian sporting event is now held by a wagering company for the first time.
In a twist, it can be revealed that the VRC could soon broker an Australian broadcast rights deal for the annual popular Royal Ascot race meeting in Britain, which potentially could then also be shown on one of Nine’s free-to-air networks.
That deal is separate to the contract it announced with Tabcorp on Tuesday for its Melbourne Cup and associated four-day racing carnival.
Tabcorp gains international media rights, domestic media rights for the Melbourne Cup that are sublicensed to Nine, Flemington sponsorship rights and integration into Nine’s free-to-air coverage for its TAB brand. Tabcorp had brokered a deal with Nine under which the broadcaster gains streaming, mobile and digital, and social platform rights, while Tabcorp also has the ability to onsell the Melbourne Cup carnival coverage to other wagering operators.
The VRC is even understood to have included in the deal Tabcorp’s marquee in the up-market Bird Cage precinct at each Melbourne Cup carnival and corporate box facilities elsewhere on the Flemington racecourse.
Broadcast veteran Eddie McGuire is likely to be Nine’s host for its coverage.
Tabcorp’s Sky Channel service also broadcasts the Melbourne Cup. The wagering operator may have a longer-term strategy of having Sky shown on a free-to-air television network in the future.
The new Melbourne Cup deal starts with the 2024 carnival this November and moves the free-to-air coverage from Network Ten, which had previously paid $100m in cash and contra to the VRC for just the local domestic media rights.
With the inclusion of other rights such as international broadcast rights and sponsorship deals, it is difficult to compare the cost of Tabcorp’s new deal with it and Ten’s previous arrangements.
But the cost of the deal, and the revenue and profit benefits potentially flowing from it, was not considered material enough for Tabcorp to reveal it to the ASX on Tuesday. Nine, which is understood to be paying only up to about $5m for its rights annually, also did not put out a release to the ASX.
Separate negotiations will now take place with the Victorian racing industry owned Racing.com broadcasting business, which has until now broadcast the Melbourne Cup carnival across its various services. A deal with Racing.com for at least the 2024 event is expected to be clinched by November.
VRC chief executive Steve Rosich told The Australian that while the terms of the Tabcorp deal were “commercial in confidence” but stressed that the contract was “the most significant media partnership arrangement in our history and we’ve been able to generate value not just for the VRC but also our long-term partner in Tabcorp and our newest partner in the Nine Network”.
Tabcorp chief executive Adam Rytenskild described the deal as “one of the most exciting and innovative in global racing” and “this is our strongest deal to date and, with the new Victorian licence, cements our growth platform in Victoria for the next era”.
Tabcorp announced in December that it had extended its Victorian wagering licence deal with the state government for 20 years in a contract worth $864m in current terms.
It has agreed to pay the Victorian government $600m upfront in June, ahead of its new licence beginning at the end of August, in return for the continuation of its exclusive wagering licence.
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