The Australian commercial television landscape has been recast by the new link-up of Seven and Ten in the battle for the 2007-2011 AFL television rights. This simple statement from Seven and Ten to the ASX yesterday announced the new partnership, and the apparent breakdown of the current deal between Nine and Ten.
It means that Seven/Ten are challenging the legendary power of Nine and Kerry Packer, a situation that would not have happened had Seven not rebounded so strongly in the 2005 ratings battle. It also means that David Leckie, former Nine CEO, and Nick Falloon, the former PBL CEO and a person who knows Leckie well, have linked to attack their old boss, Kerry Packer.
Of course there has to be a winning bid, but with Seven and Ten sharing the costs , both will be able to outbid Nine should it want to try. The link up also pressures Foxtel and its partners, News, PBL and Telstra.
It will not be pleasant around the third floor at Willoughby or the second and third executive suites at Park Street as the Packers and their executives digest this news of rebellion.
Under the present agreement Nine has broadcast the Friday night and Sunday afternoon games, Ten the Saturday day and evening games. Nine structured its broadcasts so that it had Rugby League in NSW and Queensland on Friday nights and AFL in the southern states. The Sunday games saw an AFL broadcast in the early afternoon to most of the country and then a second one to the southern states, while rugby league went to Queensland and NSW.
That was done to maximise coverage. Ten broadcast all Saturday and the games in the evening were either live or live against the gate (the telecast started half an hour later) in the city where the game was being played.
But Nine and its owner, Kerry Packer weren’t happy with the original decision by Nine back in 2000 that allowed Ten to have the finals series. That was done in negotiations between Nine’s then boss David Leckie and the Ten TV boss, John McAlpine. There are claims, strongly denied by Ten, that some side deal involving the Oztam ratings system was also a contributory factor.
But when Kerry Packer sacked David Leckie on 2 January 2002, part of the spin from Park Street was how Leckie’s decision to allow the AFL finals to go to Ten had upset the Packers. Since then Nine has had to play second fiddle to Ten. And even though Nine has the rugby league (NRL) finals, which generate a lot of viewers and profile , it’s not the same as having the AFL finals.
In the negotiation of the current contract, the introduction of Ten allowed Nine to bid much higher, especially when Foxtel was bidding for pay TV rights and was the only outlet in that area. Seven’s C7 Sports channel was dying, a victim, Seven claims, of a conspiracy between Nine and News, PBL, Telstra and Foxtel.
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That’s the subject of a court case coming up in May that’s cost Seven more than $24 million in legal fees so far, with a similar amount expected in the coming year.