Racecourse owner Arena seals betting shops deal

Click to follow

Arena Leisure shares surged yesterday after the racecourse operator signed a £55m deal with the Bookmakers Afternoon Greyhound Service (BAGS) to supply live horseracing pictures to British betting shops.

The move will be seen as a coup for bookmakers, as they face pressure to increase what they pay other courses from a new broadcasting venture, Racecourse Media Services (RMS) formed by 30 British tracks and Alphameric, which provides technology to bookies.

Currently BAGS has contracts with all 59 British courses, with pictures supplied by SIS, but RMS would provide a formidable competitor having the power to drive a hard bargain with bookies. It had planned to offer equity to other racecourses and racecourse groups in a bid to further consolidate its position.

But Arena is the second major group secured by BAGS, after Northern Racing, which signed a £25m five-year deal last month.

RMS was always going to struggle to sign up Arena and Northern because its 30 founding tracks are all shareholders in Racing UK, the rival broadcaster to At The Races. ATR is part-owned by Arena and broadcasts from Northern's nine tracks.

Arena's deal comes into force on 1 January, replacing an existing five-year deal with BAGS that started in 2004.

The £11m-a-year deal is a marked improvement on the previous arrangement which generated £7.6m for Arena in 2005 and £9m in 2006, when there was a significant expansion in the number of fixtures.

Bookmakers are understood to be privately delighted with the deal, which secures pictures from Arena's six existing tracks and Doncaster, where redevelopment work should be finished in time for next year's St Leger.

Arena stages 25 per cent of British horseracing fixtures and currently controls three of the four all-weather flat racing tracks, and one of the two with the capacity to stage floodlit "twilight" meetings in the winter.

Bookies see these as important revenue generators, with twilight meetings particularly important at this time of year when jump racing finishes before 4pm.

They had feared tough negotiations with RMS, whose stable includes many of Britain's most important tracks such as Cheltenham, Newmarket and Aintree. But they will now have a much stronger hand, knowing they will have races to show in their shops through BAGS on most days. Arena's chief executive Mark Elliott hailed the deal, which he said would have "a significant positive impact on Arena's earnings".

Arena's shares gained 3.5p to 51p, a new two-year high. In addition to Doncaster, Arena's courses are Wolverhampton, Lingfield Park and Southwell, all of which have all-weather tracks, along with Folkestone, Worcester and Royal Windsor.