The Age’s Caroline Wilson broke the news today that AFL CEO, Andrew Demetriou had brokered a deal between Channels Seven, Ten and Foxtel, whereby Foxtel will show four live matches until 2011. Foxtel will pay Seven and Ten $50 million per year for the rights to the four matches each week (which will be the Saturday afternoon, Saturday night and two Sunday games).
The fact that the deal was brokered by the AFL just shows how the much the AFL management has botched the entire TV rights deal. In forcing up the price of television rights (Seven and Ten are paying the AFL $780 million over five years, up from $500 million in the last deal), the AFL may be reaping more revenue, but the top line is deceiving – the AFL’s ultimate shareholders (club members) are now far worse off.
As a result of the recent AFL-brokered deal, with four games now on subscription television, AFL fans who wish to regularly watch their team play on television will now be required to fork out at least $600 annually for a Foxtel subscription which includes AFL. In effect, AFL fans are themselves subsidising the new TV deal. It should also be noted that the extra TV rights money received by the AFL eventually flows through to higher player wages, increased administration payments and the amorphous concept of game development – none of which benefits members in the slightest.
There was however, another, less costly solution. Currently, there are around 500,000 AFL club members. If each member were to chip in around $50 each per year (as some sort of free-to-air levy on a membership), plus a small levy imposed on walk-up and final tickets, that money could be paid to Seven and Ten such that every game was broadcast on free-to-air TV. Instead, courtesy of AFL management, members will now have to pay $600 per year to Foxtel to be able to watch eight matches each week. (Ideally, it would have been in members’ interests for the AFL to have accepted a slightly lower TV rights deal and curbed player salaries and game development).
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If the CEO of a company made a deal which treated shareholders so poorly, they would be pilloried in the press and probably forced to resign. When the AFL makes a decision which massively harms member interests, no one seems to bat an eyelid. Wilson’s article was entitled “Foxtel wins in AFL carve-up” – perhaps a fairer headline would have been “Members lose in AFL carve-up”.