The extent of PBL and News Corp’s profiteering at Telstra’s expense in Foxtel was stunningly illustrated in the Kerry Stokes v World court case yesterday. But somehow or other the majority of newspapers missed it – perhaps because they’re owned by someone called Murdoch, perhaps?

A quick flick through my local rags and a Google couldn’t find anything in the News Ltd press about how Telstra had carried the Foxtel can, but fortunately the AFR spells it out.

According to 2001 Telstra board papers, every new subscriber signed up by Foxtel in 2001 cost the cable network $162. (That means each new subscriber cost 50-percent-owner Telstra $81.) But each new subscriber meant a marginal return of $141 to PBL and $244 to News Ltd, which exerted management control over Foxtel. Reports the AFR:

Dr Switkowski conceded the difference came from News and PBL’s Joint ownership of Fox Sports, which supplied content.

“The overpricing of Fox Sports in its supply to Foxtel?” asked the judge. “I would form that view”, said Dr Switkowski.

We bet he would. Meanwhile we left wondering about two things from other evidence – the attitude in the News Corp boardroom towards Ken Cowley and some damage Bruce Akhurst might have done to his credibility in the box.

As reported yesterday, Ken Cowley warned both Frank Blount and Switkowski that Telstra was being screwed by News and PBL and that he thought it was unacceptable. Cowley was a News Corp director when he gave those warnings and still is, for the time being. Can’t imagine Rupert or Harto being pleased.

Meanwhile Telstra executive Bruce Akhurst is proving a key player in the case – he’s a man who doesn’t destroy evidence when asked to and he knows a bit about competition law. His effort yesterday was most interesting, but I’m left wondering about his judgement by this bit about why he thought News and PBL blackballed C7:

He said he believed the reason was that News and PBL put the interests of their jointly-owned pay TV program supplier Fox Sports ahead of Foxtel’s commercial interests.

But Mr Akhurst refused to accept that their motive was a desire “to monopolise the pay TV sports rights market”.

Really? News and PBL wouldn’t want to monopolise the pay TV sports rights market if they possible could? Maybe Mr Akhurst doesn’t know PBL or News very well.

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW