Tabcorp in surprise bid for Melbourne Cup broadcast rights

The wagering giant is in talks for the telecast rights to the race that stops the nation, that it would then resell to a free-to-air TV network, making it a first for Australian sport.

Tabcorp could be a surprise winner in the race for Melbourne Cup broadcast rights. Picture: Scott Barbour/Getty Images

Tabcorp is in negotiations to snatch the telecast rights for the iconic Melbourne Cup in a deal that could be worth $100m over five years, in what would be a historic move in Australian sports broadcasting.

The potential deal would mean a wagering business owns all broadcast the rights to the biggest horse race in the country for the first time, potentially including free-to-air television, digital and pay-television rights.

Tabcorp would then have to sublicence the free-to-air rights – which are protected by the federal government’s anti-siphoning laws – to one of the networks, but could maintain key digital and sponsorship rights in the deal, as well as potentially telecasting races on its wholly-owned Sky Channel service.

The Melbourne Cup rights, which include the week-long carnival of races at Melbourne’s Flemington racecourse each spring, are currently held by Network 10 but expire after the 2023 race this coming November.

Ten swooped on the rights in 2018, agreeing to pay a record $100m over five years for the rights in a deal that was far above the amount previous broadcaster Seven West Media had been paying.

Multiple sources confirmed to The Australian that talks between Tabcorp and the Victoria Racing Club (VRC), which operates Flemington, have taken place. Tabcorp would not comment.

In a statement, VRC chief executive Steve Rosich said: “The VRC is looking forward to showcasing another exceptional Melbourne Cup Carnival in 2023 in conjunction with our broadcast partner Network 10. The VRC’s media rights process for the 2024 Melbourne Cup Carnival and beyond is confidential.”

Mark Zahra after his Melbourne Cup win in November. Picture: Quinn Rooney/Getty Images

Tabcorp last year clinched a deal with the VRC for Sky for the international rights to the Melbourne Cup for two years. Sky manages the production and data delivery of the Melbourne Cup carnival to international wagering partners in 68 countries.

That deal adds to the existing agreement for Tabcorp’s TAB brand to be the official naming rights partner of the Melbourne Cup carnival’s Champion Stakes Day that takes place the Saturday following the Melbourne Cup itself.

“More than ever, we value our loyal partnerships, and we are really excited to be expanding our partnership with the VRC. We’re proudly Australian, and we are proud to be the exclusive wagering partner of Australia’s most famous week of racing,’’ Tabcorp chief executive Adam Rytenskild said about his company’s relationship with the VRC last year.

Tabcorp has also had a deal with Network 10 to be the broadcaster’s wagering partner for its Melbourne Cup coverage.

But should Tabcorp win full broadcast rights, it would likely sublicence the free-to-air coverage to the highest bidder between 10, Nine Entertainment and Seven, the latter of which already shows horse racing on other Melbourne tracks throughout the spring carnival and feature races in Melbourne and Sydney.

The potential move comes as concern is rising about the financial strength of the horse racing industry in Victoria, including governing body Racing Victoria and the racing clubs that include the VRC, Melbourne Racing Club and Moonee Valley Racing Club.

The Australian understands that Racing Victoria have engaged consulting firm EY to find savings and efficiencies across the industry, with the clubs and Racing Victoria heading for financial losses or breaking even at best this financial year as wagering on racing softens due to cost of living pressures.

While a pending EY report stops short of recommending mergers between the three main clubs in Melbourne – which hold prestigious races such as the Caulfield Cup, Cox Plate and Melbourne Cup each spring – it is said to have found potential savings of $10-$15m across the entities.

The clubs will be encouraged to explore ways they can share back office services, such as procurement and other office costs, as funding pressure on the industry mounts.

Racing Victoria executives this week raised the prospect of prize money cuts for many classes of races this year, as funding from wagering – the main source of revenue for the industry – starts to decline from previous Covid-19 lockdown highs.

The VRC is one club under financial pressure, after the Melbourne Cup carnivals in 2020 and 2021 had to be held mostly or entirely behind closed doors. It has made combined losses of $30m over the past two years, before land revaluation gains, and has $58m in borrowings from ANZ and Racing Victoria on its balance sheet.

Originally published as Tabcorp in surprise bid for Melbourne Cup broadcast rights