Everyone will be lovey-dovey on Thursday when the Ten and Seven Networks, the AFL, Foxtel and Fox Sports gather officially to sign the five year broadcast agreement that allows the Pay TV business to broadcast Australian football.
For new subscribers, the AFL won’t be part of Foxtel’s basic package as it was up to last year; it will be on Fox Sports 3, the new Premier Media sports channel started last year to carry high profile sports like cricket, soccer and the AFL, which is available through the additional My Sports package.”
For Premier Media and Austar, who tipped in $5 million cash (a point ignored by many commentators, especially Melbourne football writers), there’s an added bonus that the millions of dollars a year in fees they get from clubs, pubs and other commercial clients (airports, hotels, resorts), will be maintained.
Estimates had them losing between $30 and $40 million a year over the five years of the contract if pay TV had been excluded.
Ten and Seven get $45 million a year in cash from Foxtel and $5 million a year from Austar: there’s another $10 million in so-called contra and advertising.
But the two FTAs don’t get the $60 million a year in cash they were asking for, so it’s a loss to them, Foxtel doesn’t pay any more than it wanted, so it wins. But the deal would not have happened without Austar, which is not happy that Foxtel and the AFL haven’t been correcting the impression that Foxtel is paying $50 million a year in cash.
Meanwhile another nasty issue has erupted in Rugby League where the NRL, half owned by the Australian Rugby League, and News Ltd, is attempting to sell the mobile TV rights to Telstra.
Around $90 million has been mentioned as the price Telstra will pay but clubs have just been told that if the deal happens, financial compensation will have to be paid to PBL and News Ltd.
The deal with Telstra covers internet, 3G and DVBH (Digital Video Broadcast handheld). That’s the new mobile TV technology that will be introduced under the new media laws after the two new broadcasting channels are auctioned off later this year.
But News and PBL, as rights holders, claim they will have to be paid compensation for the use of match footage by them: Nine holds the free to air rights and PBL and News own Fox Sports which broadcasts NRL games on Foxtel.
Telstra owns 50% of Foxtel, so this is another example of the two media groups in Foxtel making money at their bigger co-shareholder’s expense.
News and PBL have done it for years in Fox Sports and it caused a lot of tension with Telstra.