TVG, HRTV announce merger

Betfair's TVG subsidiary and The Stronach Group have announced a landmark

transaction to improve the quality and quantity of televised horse racing in the

United States, capitalizing on The Stronach Group's investment in an enhanced

racing experience and TVG's investment in state-of-the-art high definition

television capabilities.

Under the deal, TVG will assume the operations of HRTV, which will be

operated from the TVG Studio complex in Los Angeles. The unified television

operations will feature races from Santa Anita, Gulfstream Park, Pimlico,

Laurel, and Golden Gate Fields over a seven-year period, as well as additional

premium domestic and international racetracks.

The agreement paves the way for more than 5,000 additional races from U.S.

tracks to be broadcast over the two networks. Via cable, satellite and telco

distribution, TVG is currently available in 36.5 million U.S. homes and HRTV is

available in 19.5 million U.S. homes.

"This is a very exciting step for TVG and HRTV as it enhances our ability to

deliver premier horse racing content to our viewers, to show more races and to

promote racing in the U.S.," said TVG CEO Kip Levin. "With our recent investment

in our new, state of the art, HD studios now complete, we're pleased to expand

our coverage of the Stronach Group tracks as part of a unified TV platform."

"Combining the significant investments we have made in our facilities and

racing content with TVG's significant investments in television technology and

distribution is the best way forward for ensuring a world class experience for

all of our important customers and our fellow stakeholders in racing," said Alon

Ossip, CEO of the Stronach Group.

The two networks will be able to show more live horse racing, officials

indicated. Today TVG telecasts approximately 27,000 races per year, and HRTV

shows approximately 16,000, with significant overlap and many races on tape

delay due to scheduling conflicts. TVG officials estimate that the two networks

will be able to broadcast live approximately 40,000 races per year -- over 5,000

additional new races than are shown today. The networks will merge operations

over the next several weeks.

Betfair will make an initial payment of $25 million and estimates that it

will pay further consideration totaling $47.8 million over the seven-year

period, although the total consideration is dependent upon TVG's future handle.

Based on projected future cash flows, the present fair market value of these

payments is estimated to be $56.3 million. In the last twelve months, under

previous agreements, TVG paid $4.3 million in television fees to HRTV related to

television content, including The Stronach Group racetracks, for which HRTV has

held exclusive rights. This transaction eliminates the need for TVG to pay those

television fees.

Following the transaction, Betfair will own 100 percent of the equity in the

unified television operation. The transaction does not include XpressBet, the

advanced-deposit wagering company owned by the Stronach Group.

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