New agreement explained
There has been a great amount of commentary in the media in recent times about various
aspects of this deal, but the process has been ongoing for over a year now.
It started with the engagement of media rights consultants, who advised on the global sports betting market and carried out in-depth analysis of domestic and international markets.
This analysis was followed by the release of an extensive invitation to tender, which contained five separate packages, Licenced Betting Offices, Streaming and Digital, International Fixed Odds and Tote, Direct To Home, and UK Terrestrial. It is a compliment to the quality and standards of Irish racing that some of the leading sports betting and broadcasting companies in the world were vying for our product.
The shortlist was whittled down, and the Media Rights Committee (MRC) moved to a preferred bidder phase, commencing contract talks with SIS and RMG who clearly had the best bid at the close of the tendering process. This process was also independently evaluated, and the decision was verified by Deloitte, who concurred with the outcome.
The winning bid included upfront payments, a minimum guarantee, in running data, and race sponsorships.
The bids received were all performance-based, and ensured that every racecourse received fair and transparent payments which would be directly attributable to activity at their own track. It also became clear that, contrary to extensive media comments, it was the larger tracks who were not receiving the full value of their rights in the previous deal, and that the smaller tracks were being overpaid, based on their performance.
It became apparent that some racecourse’s media income might be impacted in the early stages of the deal, as the new performance-based model kicked in. To protect those impacted, an easing-in provision was designed where the big tracks agreed to continue to supplement the smaller tracks media rights payments for the first three years of the deal, until the market growth projections passed out the adjustment period.
Another change negotiated was that charges to racecourses would be based on a percentage of income rather than on a fixed fee, meaning that those who earned more paid a higher proportion of the costs.
Other challenges that presented along the way included the unique situation of Dundalk, who had a potential offer on the table to buy the racecourse, together with a proposed change to the funding structure of their winter series. Another was the severe impact that switching to a performance-based model would have on Laytown, who only race once a year. The Media Rights Committee, Horse Racing Ireland and AIR all recognised these unique situations, and worked to resolve the issues to the satisfaction of both racecourses.
On February 27th, racecourses were presented with individual and combined financial projections, while contract negotiations continued with SIS and RMG with assistance from legal advisors, Byrne-Wallace (for MRC) and McCann-Fitzgerald (for AIR). Completed contracts were then circulated to AIR members with a notice of the EGM.
During this period AIR met with several racecourse boards and addressed many queries from members.
On Tuesday, members voted on the deal which had been unanimously approved by the AIR board. They voted 21-5 in favour of the proposed deal, with Kilbeggan, Limerick, Thurles, Roscommon and Sligo and Thurles rejecting it. As a result, 85% of the Irish fixture list will continue to be shown on SIS and Racing TV. These include all major flat fixtures, classics and Group 1 race; all major National Hunt fixtures and all bar one of the Irish Grade 1 National Hunt races; and Dundalk’s all-weather fixtures.
AIR is particularly pleased that the 21 racecourses who voted for the deal will have access to ITV coverage, international betting markets, and will also continue to have all of the major Irish fixtures available free to air on RTÉ and TG4. AIR is looking forward to extending their partnership with SIS and RMG and which has proven very lucrative for Irish racing
Irish Field
