Sports Broadcasting Rights single work   companion entry  
Issue Details: First known date: 2014 2014
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Notes

  • SPORTS BROADCASTING RIGHTS

    On Boxing Day 1908, promoter Hugh Donald McIntosh staged the world heavyweight boxing championship between white Canadian Tommy Burns and black American Jack Johnson in Sydney. The match is significant as one of the earliest sporting contests recorded on film.

    When radio broadcasting commenced in Australia in November 1923, sport and radio soon saw a mutual benefit—even if many sports administrators were wary that broadcasting would harm ‘gate’ takings. By 1925, horse racing and cricket were being broadcast, though ‘rights fees’ were not paid, since the broadcast was seen as free advertising. By 1930, many race callers had been excluded from racecourses, forcing them to broadcast from nearby vantage points.

    With the Australian Broadcasting Commission Act 1932, the ABC had eight city and regional stations operating in time to broadcast ‘ball-by-ball’ descriptions of the 1932–33 Bodyline Test cricket series between Australia and England. Although radio stations paid a ‘facilities fee’ there was no broadcast rights fee. The ABC and commercial radio stations worked together to ensure that none was applied. In 1946, they formed a consortium known as the Special Broadcasting Committee, with the aim of obtaining the broadcast rights at a reasonable fee and ultimately without payment.

    The issue of rights fees came into focus in the lead-up to the 1956 Melbourne Olympic Games. From the late 1940s, there was commercial pressure for the introduction of television to Australia. In 1953, the Menzies Coalition government amended the Australian Broadcasting Act 1948 to allow for the granting of commercial television licences. The forthcoming Olympic Games provided the impetus for the government to implement its two-tiered television broadcasting system. Broadcasting began in 1956, in time for the Games—but saw a showdown over broadcast rights.

    When, in 1955, the Melbourne Organising Committee (MOC) reached an agreement with a British firm, Associated-Rediffusion, for exclusive film rights, newsreel and other broadcasters protested loudly. In January 1956, a meeting between the ABC, newsreel companies and several other broadcasters, including the American NBC, issued a demand that there should be free access to the Olympic Games as was the case for photographers and journalists. The MOC stood its ground. Although this resulted in little film of the Games, it was a landmark for sport, as it had arguably established that those wishing to reproduce sporting contests for public consumption would have to pay.

    Twenty years on, a new struggle emerged. The ABC’s cosy arrangement with cricket continued until challenged in 1976 by the Nine Network and Kerry Packer. Packer offered the Australian Cricket Board (ACB) $210,000 for the broadcast rights, but it accepted a lesser offer from the ABC of $65,000. Packer subsequently set up his own competition, World Series Cricket (WSC), enticing the best Australian and overseas players to participate. WSC staged ‘Supertests’ and ‘one-day internationals’ in Australia during the 1977–78 and 1978–79 seasons, while the ACB continued conducting concurrent ‘official’ fixtures. With the schism financially crippling the ACB, an agreement was reached in 1979, with Nine gaining the broadcast and marketing rights to Australian cricket; this arrangement lasted for 15 years.

    While cricket continued its relationship with the ABC, the football codes’ engagement with television was piecemeal. Again, there was a perception that allowing unfettered television broadcasting would damage gate receipts. In Melbourne, as part of the rollout of television, there had been closed-circuit broadcasts of Victorian Football League (VFL) matches, and in 1957 a formula was struck whereby 15 minutes of three matches could be broadcast at £50 per match. By 1958, individual clubs were to be paid £500 per match, but in 1961 the VFL rejected an offer of £14,000 for the season to broadcast the last 15 minutes of each match. By 1971, however, the ABC and ATN7 together paid $200,000 per year for five years, for replays. By 1977, ATN7 was paying $100,000 to broadcast the Grand Final. From 1985, the price escalated from $3.5 million for the season to a five-year deal signed in 2011 between the AFL, ATN7, Foxtel and Telstra for $1.253 billion, with radio paying a combined $23.2 million.

    Rugby League was equally slow to realise the potential of television revenues. The first televised match between North Sydney and Balmain from North Sydney Oval in April 1961 saw North Sydney paid £261. ATN7 became the main broadcaster in the city, while the ABC provided country coverage, though historically TCN9 has been the dominant broadcaster with Network Ten’s interest intermittent. The first Grand Final was broadcast in 1967 for a fee of $5000. By 1993, the Nine Network’s owner, Kerry Packer, was paying $80 million for the free-to-air television rights, with the soon-to-be-introduced pay television rights reputedly provided free as part of the deal.

    Rupert Murdoch’s News Corporation had established that sport was a major factor in the success of any pay television network after purchasing the rights to NFL gridiron in the United States and English Premier League soccer. When News approached the Australian Rugby League with a proposal to put Rugby League on the Australian pay television platform, it found itself blocked by Packer’s Nine Network. What ensued is known as the ‘Super League War’, fought through the courts and with Nine and News funding separate competitions in 1997.

    Concurrently, a battle was fought by the same two entities for the rights to Rugby Union, resulting in the formation of the Super Rugby competition and the southern hemisphere ‘Tri-Nations’ series involving Australia, New Zealand and South Africa. One outcome of this battle was a guarantee that 95 per cent of the broadcasting revenue would be distributed as directed by the players’ association.

    Ultimately, the Super League dispute proved too costly for each organisation. A compromise was reached and the National Rugby League (NRL) was established. The 2012 television rights deal signed between the NRL and Foxtel, Nine, Telstra, NZTV and radio is worth $1.277 billion over five years.

    By the time the 2000 Sydney Olympic Games were staged, broadcast rights had become lucrative indeed—the global rights payments to the Organising Committee totalled US$1.331 billion (45 per cent of the event’s income).

    The sports broadcasting rights battle continued in the new millennium, with Australia’s most expensive court case (known as the ‘C7 case’), being heard in 2006–07. This involved C7 Sports (owned by the Seven Network’s Kerry Stokes) taking action against 22 defendants, including TCN9, the Ten Network, Optus, Austar, the AFL, the NRL, Fox Sports, Publishing and Broadcasting Ltd and Telstra. Judgment was handed down on 27 June 2007, with the trial judge commenting that ‘the expenditure of $200 million and counting on a single piece of litigation is not only extraordinarily wasteful, but borders on the scandalous’.

    Subsequently, there was the ‘Optus TV Now’ case. In July 2011, Optus released a free-to-air television broadcast recording product, known as TV Now, that would allow Optus customers to save recorded television broadcasts from 15 channels to Optus’s cloud, which they could then watch on personal computers, smartphones and tablets. The iPhone app also allowed customers to stream the recorded broadcast with as little as two minutes’ delay from the original broadcast. TV Now was of concern to Telstra, which had signed a $153 million deal with the AFL and NRL to stream matches on its phones. The court initially found in Optus’s favour, but this was overturned on appeal. Optus promoted its case as a battle between old and new technologies, while a Telstra spokesperson stated that the decision ‘gives sports bodies and content owners the ability to receive a fair return for their property’.

    Broadcast rights will continue to be much sought after, with perhaps the next battle on the horizon being where wealthy clubs and franchises want to opt out of collective deals and run their own television and other media operations.

    REFs: D. Healey, ‘Seven Loses the Football: Why all the Fuss?’, in T.V. Hickie, A. Hughes, D. Healey and J.A. Scutt, Essays in Sport and the Law (2008); S.R. Wenn, ‘Lights! Camera! Little Action: Television, Avery Brundage, and the 1956 Olympics’, Sporting Traditions, 10(1) (1993).

    ANTHONY HUGHES

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Last amended 30 Oct 2016 11:38:58
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