Nine happy to team with pay-TV in AFL bid James Chessell
From: The Australian
March 31, 2011 THE Nine Network has backed a proposal to simulcast most AFL matches live on pay television, as the bidding process for the next set of broadcast rights continues to progress without any firm bids from the free-to-air television networks.
It is believed Nine managing director Jeff Browne has based his network's bid around pay-TV group Foxtel gaining the right to broadcast all nine AFL games per round live from 2012. Foxtel has lobbied the AFL to give it live rights for all regular season games, including the ability to simulcast the four matches per round shown on free-to-air TV.
The AFL is keen to better the $780 million deal struck with Seven and Ten for the 2007-11 broadcast rights, when a last-minute bid from the late Kerry Packer in December 2005 bumped up the price.
Foxtel paid $315m to Seven and Ten for four live games per week plus replays of all games, but has made it clear it would be prepared to pay more this time if it has more extensive live rights.
Seven and Ten remain firm favourites to win the 2012-16 rights and are far less inclined to give Foxtel chief executive Kim Williams the right to simulcast their matches, given such an arrangement eats into their audiences.
While Nine will not match Seven or Ten, the network argues the structure of its deal would result in a larger contribution from Foxtel. It is in Nine's interests to push up the price for Seven and Ten, as it would reduce the networks' ability to bid for the upcoming 2013-17 NRL rights.
Mr Browne, a former AFL lawyer with a background in negotiating broadcast rights, would not comment on the specifics of Nine's proposal. But he told The Australian: "Nobody else has learnt to partner with subscription like Nine."
Asked if he was worried about losing viewers if Nine's games were simulcast on pay-TV, he said: "The Australian Masters golf was also shown live on Foxtel and we got 85 per cent of the audience and they got 15 per cent -- you have to back yourself to do a good job broadcasting in these situations, which is something our (free-to-air rivals) aren't prepared to do."
Nine has struck a deal with Foxtel for the upcoming Rugby World Cup in New Zealand that will allow the pay-TV group to broadcast matches live.
Seven and Ten executives met with AFL chief executive Andrew Demetriou, chief operations officer Gillon McLachlan and AFL Commission chairman Mike Fitzpatrick last Thursday.
Nine met with the AFL this week in less formal circumstances. It is believed neither side put a firm bid to the AFL. This has led to speculation the process could be delayed. But most parties remain confident a new deal can be struck in the coming weeks.
Posturing by all sides is a regular feature as broadcast rights reach their final stages, even in a relatively orderly process such as this one. Some television networks believe Mr Demetriou is trying to bankroll what one executive described as an "ill-fated venture into Queensland and western Sydney". Others argue that Mr Demetriou, a hard-nosed negotiator, will not get close to his target of $1 billion for the next five-year deal.
The AFL argues that it is offering broadcasters an increasingly rare commodity in a fragmented media marketplace: lots of programming with mass appeal.
But in a recent research note, Citigroup analyst Justin Diddams argued: "It's becoming increasingly difficult for FTA broadcasters to justify the cost of bidding for premium sports rights, although that hasn't (and most likely won't) stop them bidding for these packages."
The AFL process has been complicated by three main factors. First, Foxtel has argued for a holistic process that includes digital and mobile rights. These rights are of less interest to free-to-air networks who are interested in keeping as big an audience as possible focused on the TV.
Second, Nine's Adelaide and Perth stations are owned by Bruce Gordon's WIN television. This reduces the amount of money the Nine Network could make from these cities from the AFL.
Third, Communications Minister Stephen Conroy is yet to introduce to parliament new anti-siphoning legislation governing sports broadcasting. The shape of the legislation is well-known to the various parties -- four games each round will remain "protected" for free-to-air television -- but it does make matters less certain.
The government's decision to delist the recent season opener between Richmond and Carlton was described as "surprising and disappointing" by Austar chief John Porter this week.
Senator Conroy is also yet to announce the mechanism that will decide which games will be shown on pay-TV and which will be shown on free-to-air TV, although he has made it clear Friday and Saturday night games will remain on free-to-air.
Despite this, even pay-TV executives believe a deal can be struck when the legislation is passed.
http://www.theaustralian.com.au/business/nine-happy-to-team-with-pay-tv-in-afl-bid/story-e6frg8zx-1226030989408
