Talking Footy

Media wars set to cost AFL $7.5m
By Caroline Wilson
November 26, 2004
http://www.realfooty.theage.com.au/realfooty/articles/
2004/11/25/1101219680003.html


The AFL expects to spend at least $7.5 million in its coming court battle against long-time media partner Channel Seven.

The landmark legal action - which will pit the Packer and Murdoch media empires against Kerry Stokes' Seven Network - has angered AFL boss Andrew Demetriou, who has told the 16 clubs that it will cost each of them an estimated $450,000.

Demetriou went as far last week as advising AFL senior coaches and off-field bosses to make their displeasure clear to Seven Network staff.

The legal action will place Seven and its pay TV arm, C7, against the News Limited consortium, which bought the last AFL media broadcast rights.

The consortium is made up of Foxtel, Kerry Packer's Nine Network and Channel Ten. Several months after the five-year deal was signed with them, Telstra came on board as the AFL's official website provider.

Seven is claiming that the consortium colluded against it to secure the $450 million deal.

The case is scheduled for the Federal Court in Sydney next May. Also named against Seven are the AFL and the National Rugby League.

Demetriou revealed that the AFL has already spent $2.5 million seeking legal advice and has budgeted to spend a further $5 million in legal fees in 2005.

However, Seven managing director Ian Johnson said he did not believe the costly dispute would hurt his network's bid to regain the AFL rights.

Seven holds the right to bid last for the next round of free-to-air broadcast rights - although not the pay TV rights - which are up for renewal at the end of the 2006 football season.

Mr Johnson told The Age yesterday: "I respect that the litigation is on public record and I respect that Andrew had an obligation to tell the clubs. I was aware he planned to do so.

"Personally, I don't believe it is an obstruction to us having talks with the AFL regarding the broadcast rights. And in the meantime I am looking forward to those discussions."

Mr Johnson scoffed at speculation that his network could use the legal action or Telstra Dome as a bargaining tool in the next round of media negotiations.

While Seven has held the rights to broadcast Australian Rules football for the best part of 40 years, the AFL has been largely delighted with the first three years of its relationship with the News consortium.

The AFL and Seven remain strongly linked through Telstra Dome, which is owned by Seven but will become the property of the AFL in 20 years.

The Ten Network, which is also the AFL's finals broadcaster, has already gained a head start in preliminary discussions for the next media deal - scheduled to begin in earnest next year - by agreeing to televise 23 prime time Saturday night AFL games into Brisbane next season, along with increasing its prime-time commitment into Sydney.

The AFL was not available for comment last night.



Personally, I'd like to see the AFL stay with Channel 10, I'd even dump Channel NRL 9. Channel 10 has clearly demonstrated its commitment to the AFL in the northern states. As for Channel 7, well they were hopeless for 40 years in the northern states when they had the TV rights.

I agree - Channel 10 has displayed a commitment to the game and I believe their coverage is first class.

I don't see this case going to court - I would be willing to bet an undisclosed settlement is agreed to about 2 weeks before the court hearing. Demetriou says they have spent $2.5 million on legal fees this year alone!

I'm sure Barry Boolocks esq could give them better advice for half the price. Beaussie, you may wish to negotiate a release for Barry subject to a one-off payment to us by the AFL.

I'd like to see Channel Ten be the sole broadcaster of AFL just to simplify the coverage.

Having two channels is just annoying and confusing at times.

Much more simple having AFL on Ten, NRL on 9 and Rugby on 7 :D

Dizzys_on_fire wrote:

I'd like to see Channel Ten be the sole broadcaster of AFL just to simplify the coverage.

Having two channels is just annoying and confusing at times.

Much more simple having AFL on Ten, NRL on 9 and Rugby on 7 :D

I agree Dizzi. The current situation with Channel 9 and its AFL coverage in the northern states is a major let down to AFL fans in NSW and QLD (Friday night coverage in particular).

As it stands, Channel 9 is screwing AFL fans in the northern states and NRL fans throughout the rest of Australia.

I'm predicting there will continue to be two channels covering the AFL, but that it will be Ch 7 and Ch 10.

9 have their commitments to the NRL, and are unable to deliver the northern states the coverage they deserve on Friday nights and Sunday afternoons. And neither 7 or 10 will be wanting to commit the number of hours needed for complete coverage, for more than half the year.

10 have motorsport commitments on Sunday afternoons, and they've fought long and hard to be known as the "home of motorsport".

I reckon 10 will go Friday night & Saturday afternoon, with 7 on Saturday night & Sunday afternoon.

How big an audience does motorsport deliver to Ten? I agree, though, about 2 networks as it is a big ask for one Network unless it is totally committed.

Their figures aren't huge, but compared with re-runs of Elvis Presley movies or old sit-coms (anyone for Full House), they do quite well. Footy (any code) will cream the motorsport, but the fanbase are dedicated and vocal, just like Sci-Fi fans when 9 screw them over for a change to the regularly scheduled program.

They actually do quite well from sponsorships though, and they get great leverage for doing long term deals outside of sport.

Fair enough then - it makes sense for them to continue and it will mean a sharing of FTA coverage between 2 networks.

Mikey G wrote:

I'm predicting there will continue to be two channels covering the AFL, but that it will be Ch 7 and Ch 10.

9 have their commitments to the NRL, and are unable to deliver the northern states the coverage they deserve on Friday nights and Sunday afternoons. And neither 7 or 10 will be wanting to commit the number of hours needed for complete coverage, for more than half the year.

10 have motorsport commitments on Sunday afternoons, and they've fought long and hard to be known as the "home of motorsport".

I reckon 10 will go Friday night & Saturday afternoon, with 7 on Saturday night & Sunday afternoon.

I read earlier in the year that Channel 7 was going to make another bid for the AFL TV rights and that they could satisfy the AFL's desires for the northern states by providing prime time Friday night coverage that Channel 9 can't. Sharing the rights between Channel 7 and Channel 10 would also fix up the lack of coverage on a Sunday afternoon where presently Channel 9 switches to NRL coverage at 4pm in the northern states.

I'm not sure what the AFL's feelings towards Channel 7 are though with the threat of legal action in the Federal Court. As the article posted above suggests though, the AFL and Channel 7 still have a close relationship through Telstra Dome. It will be very interesting to see what happens with the negotiations for the TV rights, particularly as Channel 9 has been getting impressive TV figures in the southern states for it FNF coverage. I suspect they wont be willing to give that up so easily.

As for the motorsports discussion here, motorsports will go prime time this week or the week after for the first time on Channel 10, after pressure from sponsors and motorsports fans. Not sure how that will rate in prime time, but it will be interesting all the same.

Beaussie wrote:

I read earlier in the year that Channel 7 was going to make another bid for the AFL TV rights and that they could satisfy the AFL's desires for the northern states by providing prime time Friday night coverage that Channel 9 can't. Sharing the rights between Channel 7 and Channel 10 would also fix up the lack of coverage on a Sunday afternoon where presently Channel 9 switches to NRL coverage at 4pm in the northern states.

I'm not sure what the AFL's feelings towards Channel 7 are though with the threat of legal action in the Federal Court. As the article posted above suggests though, the AFL and Channel 7 still have a close relationship through Telstra Dome. It will be very interesting to see what happens with the negotiations for the TV rights, particularly as Channel 9 has been getting impressive TV figures in the southern states for it FNF coverage. I suspect they wont be willing to give that up so easily.

Channel 7 do still have the first/last bidding rights, I belive they paid $20M for the privilege of bidding in both 2000 and 2005 (correct me if I'm wrong), and the AFL's 2 main concerns are (1) who is going to provide the better coverage, and (2) which big is going to bring in more money.

Mikey G wrote:

Channel 7 do still have the first/last bidding rights, I belive they paid $20M for the privilege of bidding in both 2000 and 2005 (correct me if I'm wrong), and the AFL's 2 main concerns are (1) who is going to provide the better coverage, and (2) which big is going to bring in more money.

Yes Mikey, Channel 7 do still have the first/last bidding rights. That didn't help them last time round though when they couldn't match the dollars being offered by the News Ltd consortium. Apparently Mr Stokes and Channel 7 have been hurting badly ratings wise since losing the AFL rights.

As for the main concerns of the AFL, I have read that the AFL's number one concern is apparently correcting the football blackouts in the northern states. Such statements from the AFL would suggest they are less than impressed with Channel 9's coverage in the northern states.

I for one hope that the lack of coverage in the northern states is the main concern and is in fact corrected in the next broadcasting agreement. An increased financial investment by the commercial networks would be an added bonus. Surely with the increased TV ratings this season, it could be argued that the costs associated with the next broadcasting agreement need to be increased.