$700 million TV offer from Seven-Ten bid

[WilliamPowell]

Cash is the key
to TV rights
30 December 2005   Herald Sun
Damian Barrett

What an enlightening title  - like tell me something we didn't know

PROMISES to promote football in the black spots of the northern states will not be part of the Channels 7-10 counter bid for AFL broadcasting rights.

In a strategy that dramatically reshapes the AFL TV landscape, Seven and Ten have taken the view they need only match finances, not coverage, of the Channel 9 bid conditionally accepted by the AFL.

In its offer approved by the AFL Commission last Friday, Nine, in partnership with Foxtel and News Limited, publisher of the Herald Sun, pledged $780 million for the 2007-11 football rights.

Nine was allowed to sub-license four matches a week to pay-TV.

Seven and Ten have decided the rights were made purely a matter of money because of the AFL's decision to go with Nine.

They had been convinced their deal was superior in terms of free-to-air coverage in the black spots.

Anyone with half no make that a 1/4 of a brain knows the original 7/10 was better in terms of coverage

From a business prespective I can understand 7's thinking - why offer more than you absolutely have to to get the rights. Silly Andy D has made it clear the AFL are not that interested in the caoverage side of things so why should anyone else bother with it

[one-eyed]

Ten the key on AFL TV bid
By Caroline Wilson
The Age
January 4, 2006

A CRUCIAL meeting of Channel Ten's board today will decide whether to join with the Seven network in offering an extra $100 million to secure the prized AFL television broadcast rights.

Speculation was strengthening last night that the Seven-Ten alliance would go ahead and match Channel Nine's $780 million offer to televise AFL matches from 2007 to 2011.

The networks have until Friday to meet the AFL's 14-day deadline for the final bid.

Having made an unsuccessful initial offer worth $600 million cash, Seven and Ten executives have unofficially agreed to put up the extra $20 million a year needed to match the lucrative offer from Nine's owner, the Packer-controlled Publishing and Broadcasting Limited.

The PBL deal included almost $700 million in cash over five years and $80 million worth of marketing and advertising.

Seven chief executive David Leckie has returned from a holiday in Hawaii to put the finishing touches to Seven's side of the complicated costings.

While the Seven board has virtually approved the extra money, Ten must gain the final approval of its Canada-based parent, CanWest.

Seven has also agreed to match other key elements of the deal struck between the AFL and PBL - including to televise games live into Sydney every Friday night on Foxtel, the pay TV channel part-owned by PBL and the Murdoch empire.

If, as expected, the counter-bidders agree to match that aspect of the deal, Seven will need to do another deal to on-sell the Friday games to Foxtel - or risk having to televise them live into the tough Sydney market on its free-to-air station.

While Seven and Ten are yet to hold talks with the pay TV outlet, it appears likely that Foxtel would join forces with them and televise three AFL games each weekend.

Under Nine's proposed agreement with the AFL, four of the eight home-and-away games played each round would appear on Foxtel.

It also emerged yesterday that under the Nine proposal, rugby league play-offs would be given preference over AFL finals coverage into Sydney and Brisbane and other key developing markets in instances where a scheduling clash occurred.

Under revisions to the original offer by Seven and Ten, it is believed that Ten would no longer need to televise 22 live Saturday night games into Sydney, as proposed earlier, because such an agreement was not part of the Nine-Foxtel offer.

However, Ten is understood to be determined not to abandon fully its Saturday night commitments into Sydney.

The Nine-Foxtel deal was announced by the AFL on December 23 despite an earlier assurance by AFL chief executive Andrew Demetriou that no agreement would be completed before Christmas. The deal was struck following PBL boss Kerry Packer's return from South America on December 21. Mr Packer died just days later, leaving control of his empire in the hands of his son James.

Seven and Ten are in a position to trump the Packer offer as a result of Seven's $20 million payment to the AFL in 1997 for first and last bidding rights on two five-year AFL broadcasting periods.

Under the deal between Seven and Ten to bid jointly for the AFL rights, it was agreed that Seven would televise Friday night games during the season and two games each Sunday, while Ten would televise two Saturday games.

Finals coverage would be split, with a coin toss to decide which network hosted the 2007 grand final, the first under the next rights agreement. The loser would win the rights to show that year's Brownlow Medal count.

Sources close to the Seven-Ten consortium have confirmed to The Age that they would only need to improve the cash component of their original offer by between $15 million and $20 million to match the Nine offer. "It comes down to a pure financial decision," a source said. "We've had to completely do the financial engineering again based on that offer and those dollars and what it means . . . it goes down to audience flows, potential ratings, potential revenues for each network."

- with Christian Catalano

http://www.realfooty.theage.com.au/realfooty/articles/2006/01/03/1136050445890.html

[one-eyed]

Seven, Ten still in rights picture
Damian Barrett
Herald-Sun
04jan06

CHANNEL 7 chief executive David Leckie returned from overseas on Monday night to chair a meeting yesterday to thrash out a counter bid for the AFL's broadcast rights.
 
Leckie met in Sydney with Channel 10 general manager of sport David White as the networks ramped up talks aimed at matching the conditionally accepted $780 million bid of the Nine network to broadcast AFL from 2007-11.

Neither network would comment last night.

After conjecture over the deadline for the response to the Nine bid, it was decided yesterday that 4pm Friday would be the cut-off time.

The AFL had initially been working on midnight Thursday, but the Seven-Ten alliance had always been preparing for the later slot after it received the Nine contract at 4.10pm on December 23.

The alliance has formed the view it needs only match the finances of the Nine offer, ditching promises of promotion into black-spots of the northern states. It is believed the new outlook has been prompted by loose definitions, including "best endeavours", in the Nine contract regarding coverage.

But such a stance might prompt a legal showdown with the AFL, as broadcasting executives have maintained throughout the year that "all aspects" of any conditionally accepted bid must be matched at the last rights stage.

Nine's bid was made in conjunction with Foxtel and News Limited, publisher of the Herald Sun, and provides for the allowance to sub-licence four matches on pay-TV.

Foxtel would also be used in some capacity in a Seven-Ten win, but it will not be speaking with the networks this week about possible arrangements because of its commitment to the Nine bid.

Seven and Ten were more than $75 million short of the Nine bid when they were rejected by the AFL at the first-bid stage of the complicated negotiations.

Seven insiders have told people in the industry the alliance is financially capable of matching Nine's offer, but is weighing up the implications of such a heavy commitment.

http://www.heraldsun.news.com.au/common/story_page/0,5478,17724479%255E11088,00.html

[mightytiges]

Seven has also agreed to match other key elements of the deal struck between the AFL and PBL - including to televise games live into Sydney every Friday night on Foxtel, the pay TV channel part-owned by PBL and the Murdoch empire.

You would hope these Friday night games if shown live into NSW and Qld on Foxtel are at least shown delayed on FTA at 9.30pm/10.30pm or whatever time Seven had in their first offer so the game is promoted to the non-converted and kids in these states.

Andy D won't care as he's only interested in the money on offer .

[one-eyed]

Seven and Ten to trump AFL TV bid
By Christian Catalano
The Age
January 5, 2006

THE $780 million battle for the AFL's television broadcast rights is likely to come to a head today with the Seven and Ten networks ready to announce they will match the accepted bid from the Packer family's Channel Nine.

Sources close to the negotiations confirmed last night that Ten's board and its major shareholder, the Canada-based CanWest, have approved paying an extra $20 million a year in cash on top of the consortium's initial bid. Seven Network chairman Kerry Stokes and chief executive David Leckie ratified the deal on Tuesday.

The offer includes an estimated $680 million in cash and $100 million in "contra" — free marketing and promotion through their TV and publishing interests — over five years from 2007 to 2011.

Nine was not ready to accept defeat last night. Senior executive Lynton Taylor — who worked on the bid with Kerry Packer in the weeks before his death — said the final decision rested with the AFL Commission.

"The AFL have the final say and we will wait and see what the AFL tells us," he said.

Seven and Ten are satisfied that under the terms of the first and last bidding rights — for which Seven paid $20 million in 1997 and then shared with Ten last year — the AFL will have no choice but to agree to an offer that matches the one it accepted from Nine before Christmas.

But the relationship between the Seven-Ten consortium and the AFL has been brittle. There is speculation that the league will ask for more time to examine the contra component before accepting it. The AFL would not comment last night.

Seven and Ten have argued that they only need to match the dollar value of Nine's contra offer, which included advertising and promotional opportunities across its TV and magazine assets and its dominant internet portal, ninemsn.

Seven also owns Australia's second-largest magazine group behind PBL and has a partnership with the local arm of internet giant Yahoo!, which allow it to offer similar contra deals.

Another lingering worry for Seven and Ten is the involvement of pay TV company Foxtel, which is 25 per cent owned by the Packers' Publishing and Broadcasting Limited.

Though Seven and Ten have told the AFL they intend to broadcast three games a week on pay TV, the consortium has not begun formal discussions with Foxtel.

While Nine was expected to reap $50-$60 million a year from sub-licensing up to four games a week to Foxtel, the Seven-Ten group is likely to be paid less because it is offering one fewer game a week.

Media analysts said Foxtel would have little choice but to deal with Seven-Ten because football has helped it attract more subscribers in the southern states. Without Foxtel, Seven and Ten will most likely look to cover as many of the eight weekly games as possible.

http://www.realfooty.theage.com.au/realfooty/articles/2006/01/04/1136050499206.html

[one-eyed]

Stokes in the game but needs coverage
John Lehmann
The Australian
January 05, 2006

KERRY Stokes will be under pressure to offer live Friday night games in non-Australian Rules cities from 2007 when his Seven Network and bidding partner Network Ten attempt to match the $780 million offer for AFL television rights signed off by Kerry Packer for Publishing and Broadcasting Ltd days before his death.

Seven and Ten executives would today inform the Australian Football League Commission they were prepared to pay an extra $80 million in cash to match the offer put foward by PBL and pay-TV operator Foxtel, sources said late yesterday.

But it could take days for AFL lawyers to analyse the details of the upgraded offer to ensure it technically matches the deal offered by the PBL's Nine Network and Foxtel for the 2007-2011 rights.

A highly placed source confirmed yesterday Seven and Ten must match its rivals on the television coverage given to AFL matches, as well as the $780 million price, which includes $680 million in cash and $100 million in goods in kind.

Under the Nine-Foxtel deal, the AFL was promised live coverage of Friday night games in Sydney and Brisbane on pay-TV.

Seven and Ten will be legally required to match this condition, even though Friday night AFL games in those non-AFL cities are not sure-fire ratings winners and tend to be shown later in the night.

This makes it critical for Seven and Ten to strike a deal with Foxtel to carry live Friday games if their new bid is accepted.

Seven is suing Foxtel owners News Limited (publisher of The Australian), PBL and Telstra, alleging a conspiracy that denied Seven the last set of AFL rights running from 2002.

AFL chairman Ron Evans and chief executive Andrew Demetriou conditionally accepted the Nine-Foxtel deal just before Christmas.

But the AFL is required to accept a matching Seven-Ten bid under a contractual right acquired by Mr Stokes for $20 million in 1997. Relations between Seven and the AFL have been poisonous over the past year, when Mr Stokes insisted the AFL commission be sued as part of his claim for $1.1billion in damages against the rest of Australia's television industry. Mr Demetriou has made no secret of his desire for the AFL to continue its relationship with Nine. The Nine-Foxtel deal also included guarantees involving the use of PBL's Crown Casino in Melbourne for events such as the Brownlow Medal and football-related coverage in PBL magazines, the source said.

Analysts are sceptical Seven and Ten can make money on the deal - they initially offered about $615 million in cash. "They're paying over the odds now and it's hard to see how you'd hope to make a profit on it," one analyst, who declined to be named, said.

Under the new deal, Ten would lose its present right to stage the finals each year, worth millions of dollars in advertising revenue.

It is understood Seven would show three of the five finals series, beginning in 2007, under its arrangement with Ten.

Sources close to Nine claim it is in a "win-win" situation.

"If we get the rights great, if we don't, we watch Seven and Ten spend more money than they can afford," one insider said.

Gaining the AFL rights will bolster Seven's campaign to finally take over Nine's ratings crown.

Seven, which lost its 46-year association with Australian Rules football in 2001 after falling out with the AFL, finished only 2.1 rating points behind Nine in 2005.

Its executives figure the AFL would be worth between 1 and 1.5 ratings point over a year.

Each ratings point is estimated to be worth between $30million and $35million in extra revenue a year, not to mention the a built-in advertising premium for advertising on the number one rating network.

While the deal would be loss-making, Seven and Ten could expect to write about $60 million in advertising revenue against the AFL each year.

http://www.theaustralian.news.com.au/common/story_page/0,5744,17731673%255E36035,00.html

[bluey_21]

I hope the AFL will accept the 7/10 consortium deal because there'd be an extra free to air game showed per week which IMO is better than 9's offer that only shows 4 free to air game. Plus, we wont have to put up with Eddie's bias!

[WilliamPowell]

Seven/Ten bid prevails

5:00:46 PM Thu 5 January, 2006
Jason Phelan
Sportal for afl.com.au

Channels Seven and Ten will broadcast AFL matches from 2007 through 2011 after the AFL formally accepted their revised bid on Thursday afternoon.

The Nine network in partnership with Foxtel had put forward a $780 million package on December 23 last year, but the Seven/Ten alliance exercised its right to match that offer thanks to a 'last rights' clause paid for during the last round of negotiations in 1997.

Details of the breakdown of games between networks, finals allocations and coverage in the northern states is yet to be made public with the AFL set to hold discussions with the successful consortium in the coming weeks.

It's understood however, that the networks have agreed that the AFL grand final coverage in the first year of the deal should be decided by the toss of a coin. The telecast of grand finals will alternate thereafter. The remaining finals matches in any given year will be split between the networks, four apiece.

In making the announcement, AFL chief executive Andrew Demetriou said: "The AFL congratulates the Seven and Ten Networks on acquiring the rights to broadcast AFL games from 2007 to 2011. Network Ten has been a great partner since 2001 and we have no doubt that this already successful partnership will continue to flourish in coming years.

"The AFL and all Australian football fans are aware of the strong historical links between our game and the Seven Network and we look forward to working with them again in the future."

The final offer is at the high end of industry forecasts and will benefit clubs at the grass-roots level as well as the 16 AFL clubs.

"The new broadcasting rights agreement will deliver the best financial and national programming package in the history of the game and provide an important contribution to the ongoing growth of our game," Demetriou said.

The initial $780 million bid from Channel Nine parent company PBL was personally signed-off on by Kerry Packer in the days before his passing and was thought to have landed a knockout blow to Seven and Ten's hopes of claiming the broadcast rights.

Channel Nine took an innovative approach to broadcasting the game when it took over in 2002 after Channel Seven had held the rights for 45 years and Demetriou thanked Nine for its contribution to the game of Australian Rules.

"I would also like to recognise the enormous contribution that PBL has made to Australian football," he said.

"The whole organisation, under the leadership of the late Kerry Packer, has been a great friend to our game and we thank the PBL management team for the commitment and enthusiasm they brought to the relationship with the AFL.

"We will continue to work closely with PBL and we are sure that 2006 will be another outstanding year for football on Channel Nine."

Channel Ten chief executive Grant Blackley described the AFL as a substantial part of the network's schedule.

"We are very happy to continue the successful association from 2007 to 2011," Blackley said.

Channel Seven's managing director in Melbourne, Ian Johnson, a former head of Channel Nine in Melbourne, said: "It's exciting - Seven is back in football and I think that the whole network will embrace that and we're very, very happy with the way it's turned out."


http://afl.com.au/default.asp?pg=news&spg=display&articleid=241961

[WilliamPowell]

And can I just say that Eddie McEverywhere was 150% correct back in March

It isn't who throws the first punch but who throws the last and who was that again

I think this announcement is rather speciallllllllllllllllllllllllll

 

[Razorblade]

Question is who does 7 scalp from 9?

Dermy? No way.
Lyon? Ditto.
Russell? 

I'd love Commeti and wouldn't mind Brayshaw.

[mightytiges]

No more channel collingwood after this year .

Funnily enough I was out with the family around Docklands yesterday when on our way we passed all the camera crews outside AFL House just after they had found out Seven-Ten had won the rights. The Ch 7 guy we asked couldn't shut up about it  .

Question is who does 7 scalp from 9?

Dermy? No way.
Lyon? Ditto.
Russell? 

I'd love Commeti and wouldn't mind Brayshaw.

Cometti you would think will return. Ch 7 would be stupid not to have him.

I wouldn't be surprised if Dermie heads back to Seven to join Dunstall. Let's hope the Pie bias isn't replace by the Hawks  . Sheesh since the late Jack use to be on tellie there's been a Richmond vacuum on tv in terms of ex-Tigers becoming celebrities . 

I don't mind Brayshaw as a commentator but IMO I think he will stay at Nine as he's also a cricket man.

Lyon, Russell, BT, Doc Larkins and these guys will depend on what happens with the Sunday FS you'd reckon. If Daniher fails this year with the Dees, Lyon could end up coaching in a year's time if he's tv career is no more.

Nine can always blame Spud joining them for this  .

[julzqld]

Lucky for me I have Foxtel but still it will be great going back to the good old days when we could get Friday night football at a decent hour. 

I'm just hanging out for an Eddie McGuire-free broadcast. 

[Razorblade]

Good point re: Brayshaw.

Kevin Sheedy will definetly get into commentating with 7 when he retires as a coach, he has supported 7 for the last 5 years constantly going on talking footy and giving them exclusive sports interviews and such!

I don't mind Larkins at all!

[WilliamPowell]

Kevin Sheedy will definetly get into commentating with 7 when he retires as a coach, he has supported 7 for the last 5 years constantly going on talking footy and giving them exclusive sports interviews and such!

I think this has a bit to do with Ch 7 being a sponsor of the EFC 

I don't mind Larkins at all!

Yep they should target Doc Larkins

And Brian Taylor - I like BT

[mightytiges]

They were claiming on the news that the average player salary could rise from $180k now to $270k by 2011. Going on that someone like Lids could be earning $700k by then. Not bad money for just a 23 y.o.  .