Part I – Why Foxtel needs the Ashes to help business and why free to air TV let them go; followed by
Part II – The official line from the News Ltd papers.
Ashes TV rights – Part I
Another of TV’s little secrets struggled out into the public glare in Canberra Monday, and a right furphy it was.
The line that the commercial free to air networks claim they missed out on the chance to buy the rights to this winter’s Ashes cricket games in the UK, has been exposed for what it is – hot air.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
A story from the Fairfax website on the Senate hearing in Canberra Monday morning – Revealed: how free TV declined Ashes rights – looks at the same issue.
Free to air, Pay TV and a host of others with an interest in the issue will be grilled by the Senate committee.
David Malone, the head of the Premier Media group told the hearing that the three commercial free to air networks knocked back the rights to the ashes four years ago in 2001.
As the story says, he tabled a letter from the UK Group selling the rights, which revealed the rights to the Ashes TV broadcasts were only sold to Fox Sports in 2002 after the networks said they were not interested.
The UK company said the rights were offered to the free to air broadcasters a number of times.
Now a little bit of history. David Malone is a former Nine ad salesman and a trusted media executive. Premier Media group is owned 50-50 by PBL and News Ltd (News Corp) and operates the two Fox Sports Channels and other Pay TV businesses.
They sell the channels to Foxtel (i.e. Telstra) which pays per subscriber. The two companies have made as much out of this deal as they have lost in the 25% shareholdings in Foxtel (up to the heavier spending of the past 18 months on the digital rollout).
Fox Sports and Premier Media Group do not have a Pay TV licence (like Foxtel). They therefore can buy the Pay TV rights to any sport on the so-called anti-syphoning list because those rights cannot be sold to the holder of a Pay TV licence until they have been offered to a holder of a free to air licence.
As the story reveals, part of David Malone’s testimony was on the Ashes rights, but that was used to run an anti-syphoning list attack to free up more rights.
Even though Premier can buy anything it wants, it knows (and so does its two owners) that if it was to buy say the whole rights to the AFL or Rugby League (like its Murdoch affiliate, Sky did with UK soccer) the Federal Government could quite easily change the law to ban such activities.
And as powerful as the Murdoch and Packer interests are, they do not want to antagonise a Federal Government that is about to change the media laws later this year.
So why did the networks reject the rights? Because the tests will be broadcast at peak winter ratings. The cricket doesn’t get anywhere near as many people watching as CSI, Dancing with the Stars, Big Brother, 60 Minutes etc etc.
So in commercial terms the networks’ initial rejection was understandable.
The Nine Network’s rejection was even more understandable given that its associate, Premier Media Group (half-owned, remember by PBL) was waiting in the wings to pick up the rights.
Once the pay TV rights were bought, the networks could then moan and groan about how they wouldn’t want the rights because they would be on Pay TV at the same time (an odd argument that should really be made by the Pay TV operator which would have been charging viewers to watch something that was on free to air TV!)
More importantly with the very costly digital conversion program now in full swing at Foxtel, it needs a driver to build subscriptions past replacement of existing analogue customers. The Ashes and one day games against the old cricketing enemy would be ideal, so there is a lot of holding breath at Foxtel while the ABC tries to buy a slice of the free to air action (for the good of the people and John Howard!).
But while David Malone’s letter and comments have sprung the free to air networks, there’s a much more important agenda here for Premier, Foxtel, News, PBL and Telstra.
Sport is the biggest driver for subscribers to Pay TV. Football in the UK and the US have shown that and it’s something Rupert Murdoch and his executives understand. Super League was to be the big driver for Murdoch and Foxtel (pre PBL’s involvement) a decade ago.
It was to be a replication of what Murdoch and Sky did with UK soccer. That didn’t work. Now they have the chance to use the Ashes cricket.
They all need the Ashes on Foxtel to help business!
Ashes TV rights – Part II
Just for you, the official line from the News Ltd papers this morning, and Fox Sports. The Free to Air TV Networks are to blame for the impasse over the broadcasting of this winter’s Ashes test series from England.
We explained what the agents for the English cricket authorities said in a letter produced at yesterday’s Senate hearing in Canberra, but we also explained that there was another agenda behind the Pay TV industry’s plotting, especially News Ltd and PBL and their jointly-owned Premier Media, which controls Fox Sports.
So in the News Ltd press this morning the gospel according to Premier and News in The Australian, which thought the issue was so important they sent Chief Political Correspondent, Steve Lewis, along to the hearing. Here’s his report – Networks rejected rights to the Ashes.
Over at its Sydney stablemate, The Daily Telegraph, Luke McIlveen had the warm story of how the Nine Network thought the Poms would be such duds that they prevaricated and wouldn’t sign on the dotted line and that story was kindly shared with the News Ltd associate, Fox Sports on its website – a sort of gospel from the oracle – here.
The Daily Tele story in particular had nothing from the opposition, Free TV Australia, which is a bit rude and a bit too obvious for the News Ltd mob to be pushing just the Premier Media/Fox Sports line, without any balance.
But the same story on the Fox Sports’ website had the FTA’s Julie Flynn quoted, as did the Steve Lewis story.
The Free TV mob have a very contrary view to that from Premier Media and the agents, Octagon CSI. Here’s a story on the free to air side’s appearance at yesterday’s hearing – Govt may be out-foxed over Ashes and a press release from earlier this month which pushes the same line is here.
It all depends upon the meaning of negotiations and whether the networks were “in a position to make an offer”.
Of course they were, despite Ms Flynn’s assertions to the contrary. If Nine, Ten, Seven or the ABC had wanted to sign up, they would have signed up when first approached.
What is interesting is why one didn’t sign or agree to a sort of option or a scale of payments that was based on the performance of the England team as it seems concerns over their inability to perform was behind the Networks’ reluctance to put themselves “in a position to make an offer”.
The simple fact of the matter is that the free to air networks all passed, despite having the opportunity.
Now the free to air mob wants the loophole in the anti-syphoning rules eliminated. As it stands the rules apply to pay TV licencees and not channel providers, such as Premier Media and Fox Sports.
Perhaps the Free TV Australia might also ask PBL and Nine, a leading member of the lobby, about their performance in the negotiations and whether they were really serious or ran dead to allow the associated Fox Sports (now Premier Media) to get the Ashes for Pay TV and help build subscriptions for Foxtel during its digital conversion.
A sudden offer of the TV rights to the free to air networks (in the event that it could be made) would find Ten not interested, Seven very reluctant and Nine would wriggle and try and structure the broadcasts to suit itself and not viewing public.
So, if Nine got the rights, the telecast would start later in the night, around 9.30pm as we’ve seen in the past, with the first session being missed.
Why? Because the tests and one day games will be played in the peak winter ratings period and with Seven and Nine in the closest battle for years, neither would want to screen programs that would give the other an advantage with viewers, and hand over an easy ratings win.
And despite what cricket tragics and sports writers might want to believe Lost, CSI, Desperate Housewives, Law and Order and a host of other programs attract more viewers than the cricket.
That’s the reality of the free to air case and its emptiness. The reality of the Pay TV case is that Premier/Fox Sports (half owned each by News and PBL) have snaffled a great subscription driver for Foxtel.
The realities are quite different from the spin, as usual.