REG - Catalyst Media Group - Announcement by SIS <Origin Href="QuoteRef">CMX.L</Origin>

Catalyst MediaAnnouncement

23/09/2015 07:00

RNS Number : 8640Z
Catalyst Media Group PLC
23 September 2015
23 September 2015
Catalyst Media Group plc
("CMG" or the "Company")
Announcement by SIS regarding new five year deal with the Racecourse Media Group from 2018
CMG notes the statement by Satellite Information Services (Holdings) Ltd. ("SIS"), a company in which CMG has approximately a 20.5 per cent. interest, in respect of a new five year deal between SIS and the Racecourse Media Group ("RMG") for the provision of pictures and data to bookmakers to commence in April 2018 ("RMG Agreement").
The RMG Agreement ensures that SIS will continue to be an important provider of UK horseracing media and data to the retail betting industry well beyond 2018 when the majority of its present rights expire. However it will significantly change the financial model for those rights. Operating profit as disclosed in SIS's accounts for the year ended 31 March 2015, which are available on the Company's website, were 25.8m (2014:23.9m) and cash balances at that date were 22m. Up to April 2018 the board of SIS expects that the business will continue to generate significant profits and cash though this is dependent, inter alia, upon renewal of existing customer contracts in a time of significant uncertainty in the retail betting market. Thereafter the contribution from racing revenues can be expected to fall substantially from current levels. Other sources of income may arise but are not capable of being predicted at this stage. The board of CMG believes that it should continue to hold the investment in SIS for the immediate future but will review the future of the business in the light of these changes.
CMG understand that the contract has been signed, subject to stakeholder board approvals expected to take place over the next 28 days.
CMG expects to announce its audited accounts for the year ended 30 June 2015 no later than 30 November 2015.
SIS's statement in regard to the new agreement with RMG is set out below in full:
"Racecourse Media Group (RMG) and Satellite Information Services (SIS) have today announced a five-year agreement for the distribution of audio-visual 'pictures' and data to licensed betting offices (LBO) across UK and Ireland for the period 2018-2023.
Under the agreement RMG will maintain responsibility for collecting pictures and data from all its fixtures. SIS will take delivery of the pictures and data from RMG's production facility in Ealing, West London, and will make it available to major bookmakers for inclusion in their in-house channels, most of which are produced by SIS. In addition, the pictures and data will be included in a SIS-produced channel for bookmakers who currently rely on the SIS FACTS channel.
The new deal will represent a far more efficient relationship between RMG and retail bookmakers, with a significant uplift in payments to racecourses and a saving for bookmakers over current arrangements. RMG will share in the impact of their product in retail through a discounting structure that means that payments to RMG drop if shops close.
Market inefficiencies or 'leakage', as it has been referred to in the media, is being greatly reduced - a key objective of RMG's tender process that led to this agreement. The new arrangement also ensures that all retail bookmakers across the UK and Ireland will continue to have access to a package of very important core content from SIS to support their over-the-counter sports betting businesses for many years to come.
The agreement creates a new and positive era of collaboration between RMG and bookmakers, facilitated by SIS, where the parties will work together so the sport can better understand how to enhance LBO content.
Richard FitzGerald, Chief Executive of RMG, said:
"Today's agreement with SIS is a significant step forward for our courses and shows what can be achieved when racing and bookmakers work together. This more efficient rights structure will deliver a significant uplift in payments to racecourses, while bookmakers will be paying reduced costs for guaranteed quality content for the long-term.
"We considered a wide range of options for our rights and this deal offers both the scale of increase and the security we were seeking."
Gary Smith, Chief Executive of SIS added:
"SIS is very pleased to have been able to reach this agreement which we believe represents an efficient, sustainable arrangement for bookmakers, racecourses and SIS for the future. The deal cements SIS' role in the retail betting industry for the foreseeable future and ensures that we have the platform from which to continue the reinvention of SIS, developing new products and services for the modern bookmaking and gaming industry."
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Notes to editors:
 Bookmakers taking the SIS feed will show every race from all RMG courses in their shops, thereby ensuring the continued prominence of the best of UK horseracing to the betting community.
 Under the agreement independent bookmakers will pay exactly the same per shop for RMG's content as the major bookmakers with a separately identifiable amount itemised on their bill. 
 Although the RMG content won't start appearing on the SIS service for independent bookmakers until 2018, SIS intends to engage with the independent bookmakers, via its existing customer forums, to help shape the content package that will be made available to independent bookmakers in the future.
 In addition, as part of RMG's new relationship with the bookmakers, the parties are committed to co-operating so the sport can better understand how to enhance LBO content and ensure RMG's horse racing content is an attractive betting product for today's new breed of betting consumers. This new service is set to invigorate betting turnover via an enhanced, cleaner presentation and production for the betting shop customer.
About RMG
RMG is the umbrella organisation for the 34 racecourses which hold an interest in Racing UK (Sky 432/Virgin 536/Freeview 231/UPC 411), GBI Racing (international betting shop service) and Racecourse Data Company (Joint venture with 57 British racecourses for the licensing and control of Pre-Race Data). For more information, go to www.racecoursemediagroup.com.
The RMG racecourses are: Aintree, Ascot, Ayr, Bangor, Beverley, Carlisle, Cartmel, Catterick Bridge, Cheltenham, Chester, Epsom Downs, Exeter, Goodwood, Hamilton Park, Haydock Park, Huntingdon, Kelso, Kempton Park, Ludlow, Market Rasen, Musselburgh, Newbury, Newmarket, Nottingham, Perth, Pontefract, Redcar, Salisbury, Sandown Park, Thirsk, Warwick, Wetherby, Wincanton and York.
About SIS
Satellite Information Services Ltd is the foremost provider of facilities and services to the digital and retail bookmaking and broadcast industries. SIS works with rights holders, broadcasters and bookmakers, online and in the high street, and offers creative, innovative and reliable end-to-end products and services across multiple platforms. 
SIS delivers multiple channels of live racing, data and commentary from racecourses and greyhound tracks in the UK, Ireland and across the world. In addition, SIS provides data collection and delivery to online operators, as well as streaming solutions, online games, virtual content, numbers and lottery games."
Enquiries:
Catalyst Media Group plc
Michael Rosenberg, Non-Executive Chairman +44 (0)7785 727 595
Melvin Lawson, Non-Executive Director +44 (0)20 7734 8111
Strand Hanson Limited +44 (0)20 7409 3494
James Harris
Richard Tulloch

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