The Australian pay TV industry could be turned on its head by talks the Seven and Ten networks have held with small pay TV operator, SelecTV, about creating a new AFL Footy channel.

If they come to fruition, the talks would see Seven and Ten avoid having to deal directly with Foxtel and Fox Sports.

Everyone involved says there have been no talks, but I understand discussions have been held. They may not be going anywhere at this stage, but it is a sign of the determination of Seven in particular to avoid dealing with Foxtel, unless the pay TV group lifts the price it is willing to pay.

It would also get around the AFL’s insistence that Seven can’t set up its own pay TV business, which is a reading of the free to air rights with which Seven doesn’t necessarily agree.

SelecTV is controlled by the wealthy Gordon family, which also controls Win TV, and pay TV industry sources say its slowly building its reach with a couple of new channels to be added shortly, one of which is rumoured to be a local racing channel.

SelecTV does not have many subscribers: they are believed to be in the thousands compared to Foxtel’s 1.1 million plus and Austar’s half a million plus. But if the talks continue towards an AFL deal, it would be able to expand its business and ramp up distribution to pubs, clubs and others wanting the service, as well as AFL fans across the country.

Unlike the division of Australia into Fox Sports supplied and Austar supplied areas, SelecTV has a national footprint and can broadcast the required number of games on a Friday night in Queensland and NSW live as they are going to air in Victoria, WA and South Australia on Seven and its affiliates.

Seven and Ten are both saying nothing except they expect the pay TV situation to be resolved one way or the other by the end of the year and both are prepared to show all eight games each week.