Sell-out claim on AFL TV deal
Mark Day
November 16, 2006
AUSTRALIAN football rights holders Channel 7 and Channel 10 are looking to community television stations in Sydney and Brisbane to meet their obligation to broadcast eight live AFL games a week
and avoid a financial black hole on Friday and Sunday nights.
The surprise move was confirmed yesterday by the acting chief executive of Sydney's TVS Channel 31, Laurie Patton. He told Media: "There have been some discussions and we would be delighted to provide air time for this to occur. We see it as a very strong delivery of our community obligations under our licence conditions."
It is understood the AFL consortium of Seven and Ten has drawn up contingency plans
to purchase air time on TVS and the Brisbane community station Briz31 if no agreement can be reached with pay-TV provider Foxtel.
Negotiations between the groups have been drawn out and acrimonious, with the parties reportedly $15 million apart.
Under the terms of Seven and Ten's $780 million five-year agreement with the AFL, the free-to-air broadcasters have the right to on-sell up to four games a week to pay TV. If no agreement is reached, they will be bound to broadcast all eight games a week on free-to-air. This includes one game on Friday night and a new twilight game on Sunday evening which must, under the contract, be broadcast live nationally.
This will suit Seven and Ten in the AFL southern states
but is a recipe for financial disaster in NSW, ACT and Queensland. The ratings for live AFL head to head against an NRL double-header on Nine on Friday night, and Sunday league games leading into Nine's 6pm news, would be minuscule.
Seven refuses to detail its plans but has made it known that
it has no intention of crippling its prime-time programming in Sydney and Brisbane, and has developed contingency plans with which it is "quite comfortable".
But the AFL is reported to be deeply unhappy with the plan to use the community channels. No AFL official would comment yesterday, but it is understood the AFL is seething over what it sees as a sell-out by Seven and Ten.
"There is no way that this is in the spirit of the agreement," a source said. "The whole aim is to put football before the biggest possible audience. That's what Seven promised. This trashes that promise."
Many households in Sydney are unable to pick up UHF channel 31 
and the channel operator, Television Sydney, is under great financial pressure. TVS has its studios on the campus of the University of Western Sydney and broadcasts from the ABC's Gore Hill tower.
But its UHF signal is weak and regarded as inferior by those who can pick it up.
Station sources admitted there were black spots, including the northern beaches, but the signal was available in most elevated areas of Sydney, from Wollongong to the central coast.
Brisbane's Channel 31 signal is more widely received but neither community channel extends to country areas, which will disappoint the AFL because it is keen to promote its code throughout the nation.
The financial future of TVS is under a cloud. Last month it was reported it would soon run out of cash unless more funds were made available by the University of Western Sydney. It has already committed $1.5 million and guaranteed a $2 million bank loan.
The station is reportedly losing $73,000 a month. As a community station it is entitled to sell up to eight hours a day of air time to outside profit-making companies and it can carry seven minutes an hour of sponsorship advertising.
This means the consortium could buy the air time it needs on Friday nights and Sunday evenings, while keeping the revenue from selling up to 21 minutes of advertising during a three-hour game. A deal with the Seven-Ten consortium might provide financial salvation for the station, as well as being a way to protect as much revenue as possible. But it would be a far costlier exercise than doing a deal with Foxtel, which has offered $45 million for the rights to broadcast four live games a week, plus replays of all other games. Seven and Ten have demanded $60 million.
If the Seven-Ten consortium pays TVS and Briz 31 for air time to show the Friday night and Sunday evening games, it will increase the cost impact of the rights purchase.
The consortium will have to pick up the entire cost of production for eight matches a week, as well as forgo advertising and revenue from Foxtel. Market analysts estimate the negative impact of a go-it-alone decision at $80 million a year.
Seven would not comment yesterday
