The Australian Government in 2009 requested submissions for the review of the Anti-Siphoning legislation. However, there is still no response from Minister for Communications Senator Stephen Conroy on the outcome of the review. It seems a response from the government is now unlikely until after any election. This delay is dangerous and could have a major impact for sporting organisations negotiating their next round of broadcast rights.
As reported in the Sydney Morning Herald, just two weeks ago Senator Conroy told reporters that the new rules would be announced shortly. He said, ‘‘In terms of the anti-siphoning list, we’ve been in ongoing negotiations for a number of months now, we’re not far from a resolution.”
Yet just a week later he said, ‘‘A number of organisations critically involved in this actually asked us not to make some final decisions…they actually wrote to us and said: ‘look, please don’t make any final decisions yet, we’d like to talk further with you’. The goal posts shift a lot in this particular discussion.’’
The indecisive of the Government to reach conclusions over any possible reform is having a material impact on negotiations betweens sporting organisations and potential broadcasters. Not only are current rights deals expiring but the current Anti-siphoning list expires at the end of this year. A key example is the AFL broadcasting rights.
The current broadcast deal between the AFL and Seven, Ten and Foxtel expires at the end of the 2011 season. The current deal is worth $780 million and the next deal will be worth a rumoured $1 billion for the 2012 to 2016 seasons. This morning on 3AW’s Neil Mitchell program, AFL Chief Executive Andrew Demetriou confirmed that negotiations with the networks have ceased until the Government announces any changes to the Anti-siphoning laws.
The AFL is now in the difficult position of being unable to engage the broadcasters in any meaningful negotiation which in turn could hurt its chances of extracting the best price for its broadcast package. This inability to negotiate threatens the financial security of the code over the next five years.
The hold up from the Gillard Government appears to centre on, as the Australian Newspaper speculated that ‘the new Prime Minister will avoid the prospect of releasing a complicated second-tier policy — that may have the effect of frustrating the major media companies — in the lead-up to an election by delaying the decision until after the poll.’
The current laws have infuriated the pay-tv industry as the laws prevent pay-tv channels/providers from directly negotiating with a sporting organisation for broadcast rights if that event is on the Anti-siphining list. For example, Foxtel/Fox Sports negotiated with Seven/Ten for its AFL broadcast rights rather than directly with the AFL.
On the flip side the free-to-air industry is currently barred from showing listed sports as ‘first run’ on their digital multichannels, hence Network Ten must broadcast AFL games simultaneously on Ten/OneHD whilst its coverage of F1 Grand Prix (excluding Aussie F1GP) is shown exclusively live on OneHD.
FrostGlobal.com strongly believes in reform of the Anti-siphoning regime. Free-to-air networks must be able to show high-quality sport on their ‘secondary channel’ to not only drive digital TV take-up (sport is a proven ratings winner) but also to remove anger from the community when a network has scheduling conflicts.
For example, if Seven were allowed to have broadcast the Australian Open Tennis (a listed event) on 7TWO this may have meant that during this year’s Stosur v Williams match that Seve could have continued coverage of the match on 7TWO whilst the 6PM news was broadcast on Seven’s primary channel, therefore providing the best of both worlds.
Whilst this reform is a delicate process as there are many stakeholders involved, a resolution must be sought quickly. The Government needs to announce a regime that achieves the following:
- Allows listed sporting events to be run on FTA’s digital-only channels
- Provide sporting organisations the best chance to maximise broadcasting revenue
- Allow pay-tv a more equal footing with FTA networks when bidding for listed events
- Ensure that IPTV broadcasting is covered in the new reforms
The solution appears to be an adoption of a UK style, A & B list system.
Major sports such as the Australian Open Tennis, International Cricket matches (in Aus), AFL, NRL and Melbourne Cup etc. would sit in the A list. This list would allow FTA networks first choice in bidding for broadcast rights. These events must be shown on a FTA’s primary channel except where the event clashes with a news/current affairs program.
On the B list sports such as overseas golf majors, tennis grand slams and A-league matches would reside and would be available to be sought by Pay-TV and FTA contemporaneously. If FTA were successful in purchasing the broadcast rights then they could be allowed to run the entirety of the event on a multichannel, if desired. There is also rumours that a B list would include possibly 4 AFL and NRL matches each round, therefore allowing sporting organisations to divide the rights in order to maximise revenue.
The regime must also treat IPTV rights separately and falling outside the regime or as apart of a bundle of rights. As broadband speeds increase and the availability of direct-to-TV IPTV through devices such as Telstra’s T-Box, sports broadcasts over the Internet straight to TV could have an impact on terrestrial broadcasters viewing audience. The Government needs to address this now. (FrostGlobal.com will have more coverage on IPTV in Australia in the coming weeks)
The Australian and International sporting industry is awaiting the reforms which will shape the next decade of sports broadcasting within the Australian market. The Government must step into the ring and announce changes to the regime soon to ensure sporting organisations can negotiate their next rights deals in confidence that their deals will not come unstuck by Government inaction.