The SMH reports today that Telstra is suing its Foxtel partners, News Ltd and PBL, over the antics of Fox Sports. Telstra claims its $90 million deal for the NRL naming rights is being threatened by the activities of Fox Sports, which is owned by Premier Media Group, itself jointly owned by News and PBL.

Fairfax went to town on the story with a Page 1 yarn, plus another story in the sport section and a comment piece by Roy Masters, but the News Ltd papers, including the media-interested Australian failed to cover the story (except for an AAP report in The Oz‘s online IT section).

It seems Telstra has asked the Federal Court for an urgent ruling on its claims that Fox Sports has refused to stop making “lengthy highlights available on its website and via mobile phone, breaching Telstra’s $90 million six-year rights agreement with the NRL”.

Telstra wants Fox Sports restricted to using only limited footage for news reports, pending a full trial on the matter. Telstra claims that under its agreement with the NRL no more than 45 seconds of footage from each match should be shown as part of a news report and it should only be available for 24 hours from the end of a match. But the SMH reports say the duration of material is not specified in the agreement with the NRL.

Telstra has online and mobile phone rights, or so it thinks, in addition to the naming rights for the premiership. What obviously galls Telstra is that News and PBL (through Fox Sports) claimed ownership of all images of the Rugby League (not the NRL, which is half-owned by News Ltd) and forced Telstra to pay an unknown amount of money for those rights in its $90 million deal with the NRL.

Fox Sports pays the NRL $42 million a year for five NRL games which it sells to Foxtel via its Fox Sports channels. That means Telstra pays $21 million a year to the NRL, in addition to the $90 million in naming rights (half of which is “in kind” or contra). NRL is by far the most popular programming on Foxtel, making up more than three-quarters of the top 100 programs annually, and News and PBL take $60 million a year each from Premier Media (which has several other pay TV channels in addition to Fox Sports). 

Although this action is over the NRL programming, it’s a reflection of the tensions which have been building within Foxtel for the past five years. The recent saga over AFL Pay TV rights generated plenty of tension with PBL playing hardball on extra money to the point where News Ltd and Fox Sports tried to find ways of circumventing the Packer line.