Ten Network Drops Bid To Secure Melbourne Cup Rights

Network Ten has been in the news lately because of its move to step away from bidding for the Melbourne Cup Rights. The Australian commercial television network will broadcast the Cup for the last time this year, which will mark the end of its five-year contract with the Victoria Racing Club (VRC). It has cleared the way for Nine Entertainment and Seven West Media, which will be vying for the broadcast rights from 2024.

Network Ten issued a statement regarding their move and stated that they have declined the invitation to secure the broadcast rights. They insinuated that the renewal of the contract was not considered because of the VRC’s partnership with Tabcorp, a wagering giant. Here are the details on why Ten Network has decided to drop the bid to secure Melbourne Cup rights. The Network has hinted at the preferences of its viewers getting affected by the new deal between Tabcorp and VRC. Let us understand this in detail.

The Reason behind Network Ten’s Withdrawal

The Network has cited commercial constraints as the reason behind their decision to move away from negotiations for contract renewal. They stated that during the negotiations, they realised that Tabcorp and VRC are interested in shifting the focus to core racing and wagering. It means that the coverage will not be paying attention to fashion, celebrities and marques during the event, which is a significant part of Victoria’s racing industry.

However, the Network is inclined to provide its audiences every moment of the Carnival instead of reducing it to simple racing and betting broadcast products. It would interfere with the preferences of the viewers and advertisers of Network Ten, and thus, the decision was finalised. Understanding the needs of the target is of utmost importance, and this is why entrepreneurs who acquire a business for sale Melbourne undertake market research to improve their products. It helps them to meet the audience’s expectations and maintain their market share.

The betting giant Tabcorp recently signed a deal with VRC that allows it to control the broadcast rights for free-to-air television, pay television and digital media. The agreement has made it clear that the broadcast will be filled with gambling ads, making sponsors sceptical about advertising during the broadcast of the Cup. Tabcorp will retain 50% of the advertising assets and be involved with the production, which appears to be the primary reason behind the Network's decision.

VRC and TabCorp’s Take on Network Ten

While Network Ten made it clear that they will not be competing for the broadcast rights of the Melbourne Carnival Cup, VRC and Tabcorp are said to have been looking at other television networks because of the lower ratings of Network Ten. They wish to reach a wider audience by giving the rights to Network Seven or Nine. In 2022, the event witnessed the lowest viewership of only 610,000 viewers.

Tabcorp is obligated to sublicence Melbourne Cup broadcast rights to a free-to-air network under the anti-siphoning laws. The largest gambling company has also got international rights for the event for the next two years and is inviting pitches from free-to-air networks in Australia currently. VRC and Tabcorp expect to close the deal for $120 million for the domestic rights of the Cup for the next six years.

Why Television Networks Are Not In Favour of the Bid

According to the VRC and Tabcorp deal, the latter will get a 50% share of all wagering advertisements that will be aired during the event, which has made the pitching networks think again. It will involve incorporating Tabcorp’s TAB brand in half the betting advertising and combining TAB’s betting odds in the broadcast. Many are looking at this sublicencing offer as a less-than-ideal way of broadcasting the Cup with restrictions on advertising. Also, Tabcorp will be working on putting talent from its own company in front of the audience through the free-to-air broadcast.

Network Ten had secured the broadcast rights for the Cup in a $100 million deal for five years that started in 2019. They acknowledged their partnership with VRC and stated that it helped them to engage younger audiences. They even received the Logie nomination for the Most Outstanding Sports Coverage for airing the 2022 Melbourne Cup Carnival. However, they did not agree with the terms of Tabcorp and dropped out of the bid. On the other hand, Network Nine and Seven are running in close competition to secure the rights.

The VRC and Tabcorp Deal and Melbourne Cup Carnival

The Melbourne Cup Carnival is the most viewed race in the country and generates exceptional revenue for Tabcorp, the largest seller of betting and gaming products in Australia. The deal between VRC and Tabcorp is yet to be finalised, and there are speculations that it might not go through if they are unable to get the desired amount from the bidding. Securing a profitable deal with Network Seven or Nine is highly significant for VRC, which is undergoing financial strain and Tabcorp, which needs the expected revenue from the Cup.

However, they need to keep their profits in mind while grabbing the broadcast rights, which will involve various terms and conditions. This is the reason why most seasoned entrepreneurs undertake due diligence before buying a Melbourne business for sale because it helps them to determine the viability of the deal. The Melbourne Cup Carnival is a four-day event that includes thoroughbred horse racing, fashion, food, culture, and entertainment. It covers the highly popular Melbourne Cup Day, Victoria Derby Day, Oaks Day and Stakes Day.

Organised by VRC, the event takes place on the Flemington Racecourse, and its prize money goes to the tune of $8,000,000. The Carnival provides the perfect party experience to the people who come in hordes to enjoy the exuberant environment and thrilling races. The Melbourne Cup Carnival 2023 will begin on November 4 and conclude on November 11 and will be aired on Network Ten.

Wrapping Up

With Network Ten opting out of the bidding process for the broadcast rights of the Melbourne Cup, the suspense around the airing of the event has increased. While Network Ten has made its stand clear, the competition between Network Seven and Nine will ensure a significant profit for VRC and Tabcorp.