Crikey told you first, but now Chanel No. 9 explains just how Rupert Murdoch and Kerry Packer have a common interest in seeing next year’s Ashes series in England on Foxtel.
So why has it come as any surprise that the 2005 Ashes cricket tour won’t be seen on the Nine Network, nor Seven or Ten? If you go to this Crikey article several months ago, you will find many of the arguments advanced by Nine this week through its Spinning department and through the News Ltd papers. I
Readers should keep in mind that ownership pattern of Nine, News Ltd and Telstra – it is the key. And forget any posturing from Seven or Ten, they are in the same boat as Nine – 2005 is going to be a tough year.
The only way Seven will change its mind if it believes it has a chance of snatching the domestic coverage from Nine in a couple of years time and it needs to build brownie points with the cricket authorities.
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The tour might be seen on SBS and the ABC, but only if the heavens open and this Howard Federal Government has a sudden attack of nerves, which is unlikely given the distance to the next election and the size of the recent mandate.
Check out this piece in The SMH which is John Howard trying to make a non-core promise without actually doing anything at all.
That’s a stand we know of old from the PM, but seeing so many people voted for it recently, it is not a problem any more to shift, evade, but appear to be concerned.
And seeing so many people who voted for him and his party want cricket on free to air TV, then they only have themselves to blame, after Nine and News. It all goes back to the way the deal was done.
Premier Media, formerly Fox Sports picked up the Australian Pay TV Rights. It was able to do that because Premier is not a deemed Pay TV operator. The Federal Department of Communications could deem it thus, and thereby trigger the anti-syphoning rules, forcing the tour to be shown on a free to air network.
But don’t hold your breath waiting for the Howard Government. It may try and find a compromise, but take on Telstra (itself a shareholder remember), PBL (Packer and Nine) and News? You have to be joking!
Premier will on-sell the rights to Fox Sports, which will then on sell the tour games (One Day matches and Tests) to Foxtel, for a nice, fat, profit-making fee. Foxtel chairman Sam Chisholm, now off the Telstra board and in bed with the Packers, will no doubt manage his conflict well and ensure the fee is kept to a minimum so that Telstra minorities are not screwed yet again.
But with the costly and still expensive conversion to digital needing a loss-leader and customer stimulator, the 2005 Ashes cricket tour will be a godsend. It is just what the struggling Foxtel, PBL, News and Telstra have been looking for.
Rugby league and AFL football have done nothing because they have had to be shared with free to air networks.
Remember Super-League ten years ago. And then the Super 12 Rugby. They were to be two big subscriber drivers. But rugby isn’t a big spectator sport in most of Australia and Super League was fought to a near death draw by the official and rebel leagues.
That ended in a truce and the absurdity called the National Rugby league, half -owned by News and half owned by the Australian Rugby League.
Both have made no return on the hundreds of millions of dollars News still has on its books in loans and other funding for Super League and the settlement.
Now there’s a chance for the subscription driver to help, at last, boost the flagging fortunes of Foxtel.
It will not be the booster that the Premier League was at BSkyB in the UK when Murdoch merged Sky and Britain Broadcasting and the then CEO, Sam Chisholm bet the bank and the company on snatching exclusive coverage (with a limited amount on free to air) and using it to drive and build the business, thereby entering the lore of media barons actual and potential the world over.
That deal led to the escalation of values for sports rights, an escalation that may have faded a bit, but has produced values still far away from what they were 12 years ago when it all started.
Now here the Foxtel partners have a chance to drive subscribers to pay TV from free to air using the exclusive rights to the Ashes tour.
That’s why the story was leaked to the News Ltd tabloids last Wednesday, so they can wax lyrical on the nasty free to air networks and how big brave Foxtel will save the coverage, somehow.
PBL and News make more money selling Fox Sports to Foxtel than they do from their 25% stake apiece in Foxtel (actually it’s profits in Fox Sports compared to losses in Foxtel).
The exclusive cricket rights (and Foxtel and Fox Sports pulled the same trick with the UK Soccer several months ago) will be used to improve subscriber numbers for Foxtel, thereby boosting cash flow, advertising and eventually reducing losses and producing profits. They will please News and PBL a little, but not as much as Telstra which resents the rip-off that Fox Sports is.
The Federal Government likes it as well because more subscribers for Foxtel improves the viability and valuation of the struggling Pay TV business, and that will translate into better prices when the T3 sale comes around in the next 18 months or so.
So don’t expect the Federal Government to go into bat (sorry!) for cricket fans.
If you want to watch all the coverage of all the games, you will have to have Pay TV, or go to a pub.
Consider also the role of the Nine Network. They have known for the best part of a year that this would be the outcome, and it and its spokes people have maintained the fiction that they had not made a decision.
Now, thanks to Nine’s chief spinner, David Hurley, it is clear Nine had no intention. It cannot interrupt the Rugby league or the AFL coverage next winter, they are too important, especially on Friday nights.
Saturday evenings is ‘who cares for Nine” but Sunday evening is peak ratings time, the most popular night of the year.
With a resurgent Seven network next year and a tougher Ten Network, Nine would be giving up enormous revenue and ratings share to cover the cricket.
“It’s a massive commercial decision,” Hurley told The Sunday Herald Sun.
Not based on sporting values, but “commercial”. It certainly is one that always meant there would be no free to air cricket next winter.
That’s why Nine, News and perhaps Foxtel dreamed up this little lurk. Don’t under estimate the tender hand of Samuel Hewlings Chisholm in all of this either.
But you were warned by Crikey in winter that this would happen. Cricket Australia should keep this in mind when calling for bids for the next cricket contract in Australia. Nine should be made to pay.