News Ltd was at it again today, using The Australian‘s Media section to drop
stories about Foxtel and allowing Foxtel CEO, Kim Williams, to conduct some clumsy attempts at
pressuring Seven and Ten to come to an agreement on the
AFL rights for next year. It
happens time and time again and this week’s lead story – “Threat to punt football channel” – is another example:

Pay-Television giant Foxtel is considering scrapping its
sports flagship Fox Footy Channel after the AFL grand final in
September. But AFL games would still be seen on subscription TV,
possibly on a new Fox Sports 3 channel.

The future of the FFC is
uncertain because of the slow pace of negotiations between the new AFL
rights holders – the Seven and Ten networks – and Foxtel. Despite
reports to the contrary, no dollars have been discussed and no deals
have been done. Foxtel chief executive Kim Williams told Media he
wanted to continue with AFL, but “not at any price”.

The real story is that the Foxtel won’t have any AFL
rights after this year’s home and away series ends, nor will its part
owner PBL’s Nine Network. Foxtel is trying that cheap trick of selling
a partly true statement as the truth: yes, negotiations are taking time,
but Foxtel could always put its hand up and agree to the $40 million a
year it’s already paying Nine and Ten for the rights. Or it could pay
what it was prepared to pay as part of the Nine offer late last year,
which Kerry Packer thought would blow Seven away – offering more than
it could afford to exercise its last right to match the Nine offer.

It
did, and now Foxtel has realised that it is between a rock and a very
deep place. The AFL season grinds on and Williams knows he has to have
a deal in place to sell to subscribers for next year before this season
is over. Hence the noise about closing the Footy Channel and blaming
Seven (and by implication, Ten) because they won’t come to the party.

Negotiations haven’t started with Seven and Ten,
although they have been asked (and have done so) to give Foxtel a list of issues, points etc. That should be pretty
simple: pay us what you were going to pay Nine: say $50 million a
year. Seven
and Ten are still talking to the AFL about the structure for next year’s
competition, and who wants which games. Seven wants Fridays and Sundays.


Foxtel has to work out where the
money is coming from. For example, will Telstra, run by a bunch of Yanks with no
appreciation of Australian culture, want to pay half the cost (effectively) of a
new Pay TV deal that could cost more than $200 million over five years? PBL and
News would be content for that to happen, as they have been for the past five
years. Or do News and PBL decide that’s too hard and deal through
Premier Media Group and

Peter Fray

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