Carlton pulls £860m bid for horseracing TV rights

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The Independent Online

Carlton Communications, the television company, withdrew its enhanced £860m offer for the media rights to British horse racing last night, leaving just one bidder in the auction. Earlier this week, the group had increased the value of its bid, from £530m to £860m, in a letter to the Racecourse Association (RCA), which represents the UK's 59 racecourses. No public announcement was made.

Carlton Communications, the television company, withdrew its enhanced £860m offer for the media rights to British horse racing last night, leaving just one bidder in the auction. Earlier this week, the group had increased the value of its bid, from £530m to £860m, in a letter to the Racecourse Association (RCA), which represents the UK's 59 racecourses. No public announcement was made.

The letter set a deadline of last night for acceptance of the offer. As there was no decision by 5pm yesterday, Carlton allowed its offer to lapse.

It is thought that the television group had become frustrated at the inability of the RCA to choose a bidder with whom to hold exclusive negotiations.

Carlton refused to comment but industry sources said that the group felt that no progress could be made unless it was in exclusive talks, which would allow Carlton to sign up the other media and betting partners it would need.

"Carlton is not prepared to be used as a fall-back, to help the RCA's negotiations with the other side," one industry insider said.

At the beginning of this month, Go Racing, the rival bidder comprising Channel 4, BSkyB and the leisure group Arena, offered £750m for the media rights. At the time, the bid appeared to dwarf an existing offer from Carlton, on which the television company had put a value of £530m. Go Racing has also set a deadline of Monday.

Stephen Atkin, chief executive of the Racecourse Association, said: "We don't think there's a measurable difference between the bids at the moment, and there are some outstanding issues we want to resolve. We don't feel that the deadlines set by the bidders are the best way to go about this. This is not a delaying tactic. It is difficult to be precise about our timetable but the pace is hotting up."

The value of two competing offers is muddied by the fact that cash comprises less than half of each of the offers. Go Racing's bid consists of £320m in cash, £80m worth of marketing expenditure, and £350m in predicted shared revenues over the 10-year period. These shared revenues will come from betting and the selling on of media rights.

Carlton has offered £320m in cash and £50m worth of marketing. In its latest offer, it also increased the revenue sharing element of its bid from £130m to £490m. The viability of the new revenue share figure, which depends on the assumptions made about the level of betting that racing would attract, has been verified by Pricewaterhouse-Coopers, the auditors. Both bidders have proposed setting up a dedicated racing channel, as well as carrying coverage on terrestrial television.

The BBC yesterday said that it had signed a non-exclusive deal with Carlton and Go Racing, to carry some of the racing coverage whichever side wins.

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