Foxtel pays up for AFL games - Taken from Big Footy
Posted: Tue May 16, 2006 10:43 amFoxtel pays up for AFL games
May 15
Feedback Neil Shoebridge
The Seven and Ten networks will finalise a deal to sell part of their Australian Football League rights to Foxtel this week after the pay TV company agreed to a hefty price increase in return for access to better matches.
Sources close to the talks said Seven and Ten, which bought the 2007 to 2011 AFL rights in early January for $780million, have struck a $40million-a-year agreement with Foxtel, which is owned by Telstra, James Packer's Publishing & Broadcasting Limited and Rupert Murdoch's News Corporation.
The new deal represents an 18per cent increase on the $34million a year Foxtel now pays News Corporation, the current holder of AFL TV rights.
Foxtel will get exclusive live access to the new Sunday night matches the AFL will launch next year. It will also show live matches on Saturday afternoons and nights, plus replays of other matches, including finals.
Kerry Stokes's Seven Network, which is suing Foxtel and others over the collapse of its C7 pay TV business in 2002, and Ten Network were counting on higher payments from Foxtel to help offset the cost of the new AFL contract.
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Executives from Seven, Ten and Foxtel refused to discuss the deal negotiated over the past two months. The talks intensified after May5, when the AFL gave Seven and Ten a guide to how matches would be scheduled next year.
Foxtel chief executive Kim Williams was pushing for access to four live matches a week, up from three under the contract now. Seven and Ten baulked at the increase, but agreed to give the new Sunday night matches to the pay TV operator.
"Until now, most of Foxtel's live matches have been second-tier games," said one industry executive.
"Getting the new Sunday night games is a coup, as the AFL will ensure there are good matches on Sunday nights."
Ten, which shares the AFL free-to-air TV rights with PBL's Nine Network, will continue to show AFL matches on Saturday afternoons and evenings, while Seven will cover Friday night and Sunday afternoon games.
The finals series will be split between the two networks, with the grand final alternating.
The network that does not have the grand final one year will cover the Brownlow Medal presentation and the pre-season grand final. The grand final broadcaster in the first year of the new contract will be decided by the toss of a coin.
Under the new contract, Seven and Ten will pay the AFL $130.4million in 2007, rising to $146.8million in 2011. They will also provide $17.5million of contra a year.
The Foxtel deal and selling AFL matches to regional TV networks will cut Seven's and Ten's costs by $53million a year. But analysts estimate Seven and Ten will lose about $15million a year each on the AFL.
Seven and Ten executives insisted the analysts were wrong. "The AFL cost increase will be significant," Ten executive chairman Nick Falloon said in late March. "But we will make it work."
Seven executives have predicted the AFL will boost their overall audience share by 1.5 to 2percentage points, and the resultant increase in advertising revenue will make the AFL a profitable product.
The new AFL deal comes as Foxtel is moving into the black after losing more than $700million since it was launched in October 1995.
The release of News Corporation's results last week showed the pay TV company posted a $10million profit in the March quarter.
May 15
Feedback Neil Shoebridge
The Seven and Ten networks will finalise a deal to sell part of their Australian Football League rights to Foxtel this week after the pay TV company agreed to a hefty price increase in return for access to better matches.
Sources close to the talks said Seven and Ten, which bought the 2007 to 2011 AFL rights in early January for $780million, have struck a $40million-a-year agreement with Foxtel, which is owned by Telstra, James Packer's Publishing & Broadcasting Limited and Rupert Murdoch's News Corporation.
The new deal represents an 18per cent increase on the $34million a year Foxtel now pays News Corporation, the current holder of AFL TV rights.
Foxtel will get exclusive live access to the new Sunday night matches the AFL will launch next year. It will also show live matches on Saturday afternoons and nights, plus replays of other matches, including finals.
Kerry Stokes's Seven Network, which is suing Foxtel and others over the collapse of its C7 pay TV business in 2002, and Ten Network were counting on higher payments from Foxtel to help offset the cost of the new AFL contract.
advertisement
advertisement
Executives from Seven, Ten and Foxtel refused to discuss the deal negotiated over the past two months. The talks intensified after May5, when the AFL gave Seven and Ten a guide to how matches would be scheduled next year.
Foxtel chief executive Kim Williams was pushing for access to four live matches a week, up from three under the contract now. Seven and Ten baulked at the increase, but agreed to give the new Sunday night matches to the pay TV operator.
"Until now, most of Foxtel's live matches have been second-tier games," said one industry executive.
"Getting the new Sunday night games is a coup, as the AFL will ensure there are good matches on Sunday nights."
Ten, which shares the AFL free-to-air TV rights with PBL's Nine Network, will continue to show AFL matches on Saturday afternoons and evenings, while Seven will cover Friday night and Sunday afternoon games.
The finals series will be split between the two networks, with the grand final alternating.
The network that does not have the grand final one year will cover the Brownlow Medal presentation and the pre-season grand final. The grand final broadcaster in the first year of the new contract will be decided by the toss of a coin.
Under the new contract, Seven and Ten will pay the AFL $130.4million in 2007, rising to $146.8million in 2011. They will also provide $17.5million of contra a year.
The Foxtel deal and selling AFL matches to regional TV networks will cut Seven's and Ten's costs by $53million a year. But analysts estimate Seven and Ten will lose about $15million a year each on the AFL.
Seven and Ten executives insisted the analysts were wrong. "The AFL cost increase will be significant," Ten executive chairman Nick Falloon said in late March. "But we will make it work."
Seven executives have predicted the AFL will boost their overall audience share by 1.5 to 2percentage points, and the resultant increase in advertising revenue will make the AFL a profitable product.
The new AFL deal comes as Foxtel is moving into the black after losing more than $700million since it was launched in October 1995.
The release of News Corporation's results last week showed the pay TV company posted a $10million profit in the March quarter.
