In the lead up to the announcement of the new 2012-2016 television rights deal for the AFL, we are pleased to publish for the first time an original FrostGlobal article from 2006 examining the history and state of AFL broadcasting rights following the announcement of the 2007-2011 rights deal.
FOX FOOTY RIP 2002-2006
For the AFL this was the ideal vehicle, the first of its kind in Australia, a 24 hour dedicated AFL only channel broadcast nationally on what is the monopoly in the Australian pay-tv market, Foxtel. However, ever since Kerry Packer authorised in his final great move for his beloved Nine Network a A$780 million bid for the AFL TV rights for Nine and Foxtel, there has been nothing but turbulence among the football media and media companies alike.
It was clear from the outset that the AFL wanted Channel Nine as their partner for the next round of the AFL Television broadcasting rights.
There are numerous reasons for this and here are just a few examples.
- Despite a 45-year association with the game up until 2001, Channel Seven and the AFL over the past few years have had somewhat of a soured relationship. This was because when the News Limited (25% owner of Foxtel) led consortium threw down a $500 million bid for the AFL rights from 2002 to 2006, with the backing of Telstra (50% owner of Foxtel), PBL (25% owner of Foxtel) and the Ten Network, Seven were left hanging dry, not just with a large gap in their weekend schedule but also financially. This was because the AFL games had been a crucial scheduling component of their C7 pay-TV arm and with Foxtel’s Fox Sports becoming the dominant pay-TV sporting brand (wrestling the NRL rights from C7) in Australia, C7 went bankrupt. This prompted Seven to bring one of the largest law suits in Australia that alleged that Foxtel along with Telstra, PBL, News Limited, Ten Network, NRL and the AFL (among others) colluded to ensure the collapse of C7 by asking for an exorbitant fee to run the C7 Sport channels on the Foxtel platform. It was argued that such a tactic ensured Fox Sports’ market domination and continued growth therefore ensuring the financial prosperity of Foxtel (which two weeks ago posted its first full year profit (A$4 million) since its inception and now has over 1 million subscribers). This is clearly where the relationship was first strained, the fact that Seven was and still is suing the AFL among other corporations it blames for the failure of C7 in the Federal Court [the Federal Court eventually ruled against Seven in the case]. Not the best start to a marriage whose purpose is to try and develop the game within Rugby League heartland (ie. New South Wales and Queensland) and to prevent the increasing rise of soccer amongst young Australians at a grass roots level.
- It has been widely accepted that Channel Nine has brought the standard of football broadcasting to a new level, at least on Friday night coverage of games. With in-depth analysis from Dermott Brereton and Garry Lyon and commentary from Dennis Commetti and until this year Eddie “everywhere” McGuire, not to mention some 20 cameras covering the game, Friday night at 8:30 is an experience not to be missed and some fear, including the AFL, that due to the huge amount that Seven and Ten paid for the rights, coverage will suffer.
- Seven around a decade ago paid around A$10 million to have the first and last bidding rights for AFL television broadcasting deals and during the course of last year they offered 50% of these rights to Ten and a new AFL partnership was formed, now hoping to outbid the might of Nine. This was a problem as many of you may recall back in December last year. Because when Kerry Packer made his last ditch for television rights, in a similar vein to the offer he made to the Australian Cricket Board all those years ago, this time the AFL accepted the bid outright, but they had no option but to offer it for the Seven and Ten consortium to match it and obviously they did.
So that brings us to 2006….
Clearly Foxtel wants footy. With its investment in Australian sporting competitions at a new height with exclusive coverage of the A-league soccer, to its newly acquired rights of Australia’s domestic cricket season, Foxtel needs footy to complement this coverage and more importantly its NRL coverage, which it shares with the Nine Network. The problem once again that has resulted in nearly 9 months worth of negotiating between Foxtel and Seven-Ten, is that Seven is suing Foxtel (part owned by PBL (parent company of the Nine Network)) and Foxtel are trying to underwrite the value of what Seven are offering. With talks stalled this has led to the demise of Fox Footy. However, those who have commented in the past week that this is a sad day for football may be correct in the sense of football related programming that has become abundant since the inception of Fox Footy, such as White Line Fever or On the Couch as it may reduce because of any new deal, however it is not the end of the road.
The fact is that Foxtel is nothing but a third party to the proceedings and has no contracts with the AFL from next year (at this stage) and even if they were apart of the picture next year, it is an indirect link as Foxtel would effectively be a subcontractor to Seven and Ten.
When Seven wrestled the rights back with its new partner in crime, Ten this year, their contract with the AFL stipulated the broadcast of all eight premiership round games must go to air and if no games are sold-on to pay-tv, then all games must be broadcast on free to air television. As the CEO of the AFL Andrew Demetriou said “We’ll have eight games on free to air including, thankfully, into Queensland and NSW live”. The agreement allows a maximum of 4 premiership games per round to be sold to subscription television. However, at this stage of negotiations it looks like the package Seven-Ten are willing to on-sell is three premiership games per week.
It is crucial to point out that even though Foxtel is the dominant force in Australian pay-tv, there have been comments that AFL matches could be broadcast on SBS or the American sports channel ESPN, which is still struggling for an identity in Australia, however if ESPN broadcast AFL matches this would cement itself as a attractive alternative to Fox Sports in the Australian market.
The attraction of having all eight games on FTA each week is not an attractive proposition to all. There is criticism from some circles that because for commercial reasons the games will not be be replayed on Seven or Ten, those who work night shift or for other reasons cannot watch the game at the first instance will be disadvantaged. Here, in my opinion I think that the Federal Government is at fault and not the television networks or how AFL contracts are written. In the United Kingdom, the advent of multichanneling or as it is better known, Freeview, is a successful TV model, without the inherent monthly subscription cost of pay-tv providers such as SKY. Freeview provides a one-off payment of anything from 30 pounds sterling to 100 pounds sterling, which allows a television set to receive some additional 30 to 50 TV channels and the same again for radio channels.
What implications does this have for the broadcasting of sport in general on television and the demise of Fox Footy? If the Australian Government, in their new media reforms, were to permit a more viable multichannel option than currently being offered and match the UK model, sport for free-to-air (FTA) viewers would prosper and the demise of Fox Footy would be somewhat insignificant. For example, during the Soccer World Cup in Germany this year, the BBC and ITV shared television rights for the tournament. In some circumstances the BBC were unable to broadcast matches on their flagship ‘BBC 1’ and ‘BBC 2’ channels and instead offloaded games, such as Australia v Croatia onto their Freeview channel ‘BBC 3’. This meant the general public could still see the match, without needing to buy a subscription to SKY or Telewest. Another example is that ITV this year had the television rights to the Tour de France and UK Boxing, but they did not show these on their flagship channel ‘ITV 1’ but on their sister Freeview channels ‘ITV 3’ and ‘ITV 4’ respectfully. What this shows is that sport can successfully be broadcast on a channel that is effectively free-to-air with a one–off payment rather than a monthly subscription channel. Those who say that this is just the same as shipping programming off the main channel to the demise of the public are erroneous for these reasons.
The effect that multichanneling could have in Australia is enormous for both the AFL broadcasting and general sports. For example, an AFL FTA broadcaster could in Northern Markerts (NSW and QLD) carry an AFL game on their digital-only multichannel, but in Southern Markets (VIC, SA and WA) broadcast the game on their flagship channel. This would provide the AFL a potentially wider audience than pay-tv, whilst still making the broadcast financially viable in areas where ratings are naturally going to be lower and therefore less attractive to advertisers as the multichannel targets a more niche audience. Furthermore, the programming opportunity for replays speaks for itself. Once again we draw attention to England, and more specifically Channel Four and its digital offshoots ‘More 4’ and ‘E4’. The beauty with the digital channel platform that Channel 4 has adopted for Freeview is that in the first instance their hit shows are shown on its main station and then throughout the week repeats of those shows are shown on ‘More 4’ and/or ‘E4’. Surely this model would be ideal for Seven or Ten in combating criticism should Foxtel not buy replay rights, this programming decision (provided the Commonwealth relaxes multichanneling laws) would enable games to be replayed mid-week. Therefore allowing those who cannot watch the game at standard broadcast times to catch up on them. Furthermore, it would allow the AFL to reach a larger audience than with a pay-tv provider. The Commonwealth government should consider this a priority when the upcoming media law reforms are put through the legislative process.
With the death of Fox Footy, the media has been asking for an explanation. Foxtel has argued that the protracted negotiations between Seven/Ten are a result of the Anti-siphoning legislation that offers first rights to free-to-air networks for sporting events listed on the Anti-siphoning list, meaning that Foxtel cannot deal directly with the AFL but instead with the television broadcast right holders, which in this case is Seven and Ten. Foxtel can rightly blame the Anti-siphoning laws in allowing FTA first choice to the most valuable sporting and cultural events, meaning FTA having more attractive sports programming inventory to offer to advertisers. On the other hand pay-tv is left for example, with second rate tennis matches, as seen with Fox Sports’ coverage of the Australian Open tennis, where Seven as the host broadcaster has first choice of matches, typically those shown on Rod Laver or Vodafone Arenas.
On the contrary, the ethos of the Anti-siphoning regime is to provide the public the best chance of viewing events which are of national and cultural importance to Australia, such as the AFL or NRL regular season. So the negotiations that resulted in Seven and Ten securing rights that obliges them to broadcast all eight games per round on free-to-air (providing no deal is reached with a pay-tv provider), naturally illustrates that the Anti-siphoning regime works and in this case is effective in ensuring that the national game is seen by the largest possible audience. You cannot blame Foxtel for being aggrieved by the restriction placed on it by the 1992 Broadcasting Act (Cth), but in terms of the public interest the Anti-siphoning laws have provided the Australian public with an opportunity for football viewing on free-to-air from a minimum 4 games to a maximum 8 games per week.
Some will see it as a tragedy that Fox Footy as a groundbreaking channel with innovative football associated programming and new interactive match coverage could disappear so soon after it was brought to life, however others will see it as an experiment as Australia’s first one sport channel that has run its course. Either way, when the final whistle blows on this year’s AFL Grand Final television replay on Fox Footy the lights will be turned off at their South Melbourne studio and cease to run. Usually, when that final Saturday in September comes around it is a celebration of our game for both the winner and the loser; however this year it will also be the final time we see Fox Footy. RIP.
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