RACING Victoria believes a broadcast rights deal with Seven West Media can be at least as lucrative as a contract with Tabcorp's Sky Racing and that it can survive Tabcorp turning off Victorian horse racing vision on Sky from Monday onwards.

JOHN STENSHOLT & PATRICK BARTLEY report for FAIRFAX MEDIA that internal fiscal modelling prepared by Racing Victoria show it making a net profit of several million dollars in the first year of a mooted deal with Seven on the broadcast deal alone, from about $16 million of revenue, including advertising on a new racing free-to-air channel and income from corporate bookmakers paying to show racing vision on their websites.

There would be about $12 million in costs associated with the move, including a substantial amount in production for a new Seven free-to-air channel that will carry Racing Victoria's racing.com brand.

The modelling is for domestic broadcast rights only, for which Tabcorp is understood to have offered the racing authority about $16 million, as part of a package including digital and international rights that could be worth $20 million to $25 million – less than the $30-million-annually figure that had previously been widely reported.

Similar costs on the Tabcorp offer would bring the net profit Racing Victoria would make from the deal to a similar result it projects from opting for Seven. 

Bumper 2015 financial year profit

Racing Victoria, set to announce a bumper 2015 financial year profit of more than $15 million, also believes it has enough fiscal strength, coupled with the Seven deal, to survive for at least a short period of time without vision on Tabcorp's Sky.

Tabcorp said on Tuesday it would stop showing Victorian racing on Sky from June 16 onwards. It has cancelled meetings with Racing Victoria executives, who now expect the wagering operator to follow through on its threat to cease the vision.

"It is unfortunate it has got to this," Racing Victoria chairman David Moodie said about the stand-off with Tabcorp. "I would like to think this can be avoided as it is not in anyone's best interests."

Racing Victoria and Seven are understood to have offered an olive branch to Tabcorp in the form of international rights, as well as a deal for it to be the only wagering advertiser on the new channel and the racing.com website.

Wagering on Victorian horse racing has grown by more than 5 per cent in the past 12 months. Racing Victoria believes if it can get that growth figure to 6 per cent with Seven, at least $15 million will flow to its bottom line annually.