Racing: Savill's public spat a barrier to data deal

If you are a certain type of lawyer, you love nothing more than the sight and sound of a speeding ambulance. If you are a journalist, then a spat which involves money, threats, aggression and mutual antipathy can have much the same effect.

This is why the dispute which blew up last week between Peter Savill, chairman of the British Horseracing Board, and the Tote, the government-owned bookmaker, is a welcome Christmas present, and unlike an ambulance, it does not demand to be chased. Instead, with a commendable lack of decorum, both sides are conducting their argument in the letters column of the racing press. Best of all, the row shows no sign of going away and could soon end up in court.

The root of it all is money, specifically the 2.5 per cent of betting turnover (which is closer to three per cent after VAT) which Savill is demanding from bookmakers from 1 May next year in return for the right to use live pictures and data from British racing. This, Savill says, is a strictly non-negotiable payment, although bookmakers who sign a licence agreeing to his terms by the end of this year will pay a reduced rate of two per cent of turnover until May 2004.

At a board meeting of the Tote this month, Savill – who, as BHB chairman, is also a Tote board member – argued that the Tote should sign up before 31 December. Savill, who is closely identified with the plan, then withdrew from the meeting, but his arguments were not accepted in the ensuing discussion. Last week, the Tote announced that it would not apply for one of the BHB's licences at either the full or concessionary rate.

This was a considerable setback for the BHB. In the "them and us" atmosphere which has taken hold since Savill's arrival at the helm, the Tote had been seen as being broadly on racing's side. Instead, it now stands shoulder to shoulder with other bookmakers, who complain that they cannot afford to pay two per cent of turnover, never mind two and a half. They also object on commercial grounds to some of the terms of the licence, not least its non-negotiability.

The fallout has included a letter to the Racing Post from the three independent, Government-appointed members of the Tote board, affirming their belief that they made the right decision. Savill, meanwhile, has complained to the Department of Culture, Media and Sport about the Tote's conduct, a remarkable thing for a member of the Tote's own board to do. He is also unhappy that he was forced to withdraw from the board's discussion of the licence issue, although given that the funding plan is something of a personal crusade, it would seem clear that he faced a conflict of interest.

Savill also suggested – again publicly – that the Tote's decision was influenced by fears that the Office of Fair Trading's investigation into the issue of rights payments would be extended to include the Tote if they agreed to the BHB's terms. This the Tote firmly denies. "The decision was taken purely on commercial grounds," Nigel Roddis, the Tote's company secretary, said yesterday. "When the figures were produced by Tom Phillips, the chief operating officer, they were not commercially viable, and the board unanimously rejected the offer at two per cent. Turnover is up [after the abolition of betting duty], but margins are being squeezed, and there are costs incurred in taking additional bets."

It did nothing to calm tempers when, on Saturday, the BHB announced its intention to sue both the Tote and Coral-Eurobet over their alleged failure to agree a one per cent royalty fee on internet turnover. This is a small but relevant piece of the overall picture, and further evidence of the BHB's determination to exploit its picture and data rights in every way possible.

Roddis confirms that he is "expecting a writ" when he arrives at work this morning, while Vaughn Ashdown, managing director of Coral Eurobet, said yesterday that papers were served on the firm last week, despite the fact that the firm is already making agreed payments on internet turnover to both the BHB and the Levy.

"We want to be promoting horse racing," Ashdown said, "and all this fighting and the belligerent stance of the BHB is doing nothing for anyone. The general public must wonder what the hell is going on. He [Savill] keeps saying this is non-negotiable, but if you're a monopoly supplier, you've got to negotiate. They're saying you can take it or leave it, and you'll have to take it because your business won't survive if you don't. If that's not the abuse of a dominant monopoly position, I don't know what is."

A clever man like Savill must appreciate that sooner or later, a negotiated settlement is the only way forward. Whether he is smart enough to realise that sooner would be better than later remains to be seen.