- Fox Sports and NYRA Bets have announced a long term partnership agreement and expanded media rights deal.
- As part of the deal, Fox has acquired a 25% stake of NYRA bets.
- NYRA Bets is the New York Racing Association’s account-wagering company.
The mad scramble of the legacy sports/media world to get a piece of the burgeoning US sports betting market has spilled over into horse racing. Fox Sports, a unit of Fox Corporation (NASDAQ: FOX) and the New York Racing Association (NYRA) have announced a 10 year deal that expands their existing broadcasting and promotional agreement. As part of the deal, Fox Sports will take a 25% equity stake in NYRA Bets, the advanced deposit betting platform of NYRA. Fox Sports becomes the official wagering partner of NYRA Bets and, according to the press release announcing the deal, sets themselves up as ‘the leading media provider for elite thoroughbred racing through the next decade’.
The COVID-19 pandemic has produced some strange financial results for the horse racing industry. Despite the fact that live attendance and betting at racetracks was pretty much non-existent in 2020 the overall betting handle on thoroughbred racing in the United States was down only 1%. Cancellations and closures at some tracks meant that 10,000 fewer races were run than the previous year but overall per race handle was good. The results, among other things, make it clear that advance deposit wagering and similar platforms are the future. In the last three quarters of 2020 alone, handle at NYRA Bets jumped by 115% over the same period in the previous year. Horse racing viewership numbers on Fox Sports skyrocketed at the height of the pandemic but have dropped back to a more reasonable level now that the sports world is back in business.
The gain in handle at NYRA Bets was also experienced by the ‘big three’ of ADW (TVG, Twinspires.com, and XpressBet). In December, we looked back at the financials for the horse racing industry in 2020 and considered some of the possible implications:
The final quarter of 2020 saw record wagering numbers. Much of this was due to the completely jumbled schedule of major stakes races but even among daily race cards there was more betting interest. According to Equibase numbers total handle on U.S. races in Q4 was up 5.6 percent, despite an 11.1 percent drop in races held. December–usually a ‘dead month’ in most years experinced a 6.2 percent jump in total handle on U.S. races in December despite there being 7.4 percent fewer races run.
Perhaps the strangest outcome of the 2020 season was the completely negligible impact of the absence of fans and in turn on-track betting. It’s no secret that mobile and remote betting options are the wave of the future but that was clearly demonstrated during the past 365 days. It also presents a curious scenario–would it be more cost effective for the industry to run all but the major race cards without fans?
The NYRA/Fox Sports press release gave some viewership numbers specific to NYRA Bets:
As an unprecedented year interrupted live sports around the world, horse racing operated safely and continuously. NYRA Bets achieved record growth in 2020, as new fans engaged with horse racing by watching an unparalleled amount of coverage across FOX Sports’ family of networks. Driven by a dramatic expansion in this live television coverage, NYRA Bets generated $225 million in wagering handle in 2020, a more than 100% increase compared to 2019.
Fox Sports has done a nice job setting themselves up in the new world of interactive betting as Michael Mulvihill, FOX Sports’ Executive Vice President, Head of Strategy and Analytics, noted in the press release:
“The remarkably rapid expansion of NYRA Bets, and the digital ADW wagering marketplace, make this an ideal opportunity for FOX Sports to deepen and broaden its investment in both premier media rights and the high-growth sports wagering industry. With our investment options in NYRA Bets, FOX is now uniquely positioned as the only media company with strategic stakes in digital bet-taking businesses in horse racing, sports betting, poker and casino gaming. We’re confident that our television partnership with NYRA will fuel continued growth for NYRA Bets in the years ahead ”
That might technically be true, but lest we forget Sinclair Broadcasting (NASDAQ: SBGI) acquired the 21 regional Fox Sports-branded networks in 2019 at a deal valued at more than $10 billion USD. Fox Sports gave up a lot of programming and penetration:
Sinclair acquired the 21 Fox Sports-branded regional sports networks, or RSNs, from Walt Disney Co. in a 2019 deal valued at more than $10 billion. The networks collectively cover 16 National Basketball Association teams, 14 Major League Baseball teams, 12 National Hockey League teams and more than 4,500 live events a year, according to Sinclair. Bally Sports will have 19 RSNs following the rebranding, with Fox Sports Tennessee and Carolinas—which weren’t full-time channels previously—becoming a part of what will be called Bally Sports South.
Sinclair is rebranding the networks to Bally Sports in a partnership with Bally’s Corporation (NYSE: BALY). The ‘net net’ is that Bally’s has a similar portfolio with sports betting, casino gaming, poker and horse racing–and they went out and got the TV access. In addition, Draft Kings and Dish Network have a nascent sports betting partnership that could easily evolve into more areas.
Even so, it looks like a no lose deal for Fox and NYRA from a financial standpoint. It should also benefit the sport of horse racing on a macro level. There’s more racing available via TV and streaming than ever before. Best case scenario–it becomes a mutually symbiotic relationship that establishes Fox Sports as the ‘go to’ horse racing provider and in return grows the popularity of the sport similar to HBO’s one time status as the ‘heart and soul of boxing’.