Under a new broadcast rights deal Cricket Australia will part ways with its long broadcast partner, the Nine Network, after more than 40 years.
The A$1.182 billion deal lasts six years and will commence from this coming summer through to 2024. It will be split between Seven and Foxtel.
As part of a new deal, Seven West Media will pay A$75 million per year to broadcast Big Bash League matches (43 of the 59), all home international tests, including the Ashes (2021-22), some Women’s Big Bash League and International matches, along with award ceremonies including the Allan Border Medal and Belinda Clark Award.
The Nine Network’s partnership with Cricket Australia had a rocky start when the Australian Cricket Board decided to ignore Kerry Packer’s bid in 1976, in favour of the then partner – the ABC. Packer then changed cricket forever with World Series Cricket.
Today’s new media rights deal is another major shift in Australian cricket history. Not only is it the first time Seven will be involved in cricket, the new deal will also allow Australian cricket fans to have access to more cricket coverage than ever.
While there are more hours, there is a definite shift in what will now be shown on free-to-air television.
The current cricket broadcast rights deal with Nine and Ten is a five year A$590 million deal, ending this year. It was an 118% increase on the previous five-year deal.
Cricket Australia desired a similar increase with its new broadcast rights deal, asking a A$1 billion price tag. While it reached the A$1 billion price tag, the deal is for six years rather than five years.
Despite this, the deal is on par with recent increases in the cost of Australian sports media rights. Cricket Australia’s new rights deal matched the percentage increase from the previous deal, (achieved by the AFL) of 67%.
The winners and losers
The rights for Foxtel are a massive win, as Foxtel has lacked Australian summer sport content. By gaining the cricket it now has a full-year calendar of Australian sport. Its exclusive digital rights will allow Foxtel to expand its streaming platforms and potentially increase subscription across both its cable and digital services.
Foxtel’s exclusive digital rights will also dictate what Seven can do with cricket coverage. In recent years Seven has established a free (with ads) and premium service for its major sporting rights, including the tennis and the Olympics. For the cricket it appears that Seven will not be able to incorporate this approach.
Despite this Seven executives see the cricket rights as a better deal in comparison to the tennis rights, which it recently lost to the Nine Network. This is because the cricket media rights give the company over 400 hours of sport, more than double that of the Australian Open.
Previously UBS media analyst Eric Choi had stated that Nine lost A$30-40 million a year on the current cricket rights deal. Nine will still have cricket as part of its schedule as it has rights to the next Ashes series from England and the ODI World Cup in the UK in 2019 and the T20 World Cups in Australia in 2020.
The biggest loser from the broadcasters’ perspective is Ten, that has held the rights and gained high ratings from the Big Bash League. It will now need to find programming to fill a very big void in its summer lineup.
Now Cricket Australia has to play a balancing act to make sure cricket is not placed behind a pay-wall and therefore see levels of participation decline, as seen in the UK.
It has to ask itself, will Australians pay to watch cricket on their screens?
The ABC’s chief economics correspondent, Emma Alberici, did her job the other day. She wrote a well-researched analysis piece investigating whether the Turnbull government’s proposed company tax cuts would grow the economy and break Australia’s wages deadlock.
Alberici’s article came in for a lot of criticism from the Turnbull government for its one-sidedness and lack of balance. Later, the ABC took down the article from its website.
If you read her piece, you’ll see that, yes, she could have included more voices, and yes, the case for company tax cuts was forcefully argued against. But the argument and analysis was built on sound research, as Saul Eslake (one of Australia’s most senior and respected independent economists, who was quoted in Alberici’s story) has pointed out.
So, why on earth did ABC take the article down?
Part of the answer to this lies in the very editorial policies that are supposed to safeguard the ABC’s independence. The current wording of these polices function as a straitjacket on ABC journalists and make it hard for them to toe the line between analysis and opinion.
And that in turn makes the ABC look less independent.
High level of trust
One of the ABC’s greatest assets is the high public trust it enjoys compared to many of its commercial media competitors.
That trust is to a large extent built on the broadcaster maintaining and defending its independence from commercial, political and any other societal interests.
There are a lot of misconceptions regarding what a public broadcaster is. But one thing it is not is a government or state broadcaster.
There are certainly examples of some public broadcasters that are. One prominent recent case was when the Polish government in practice took control of the country’s public broadcaster and turned it into a government mouthpiece.
A serious case of self-doubt
The ABC Act and the ABC Charter are the safeguards of ABC’s independence from the government of the day. This independence was challenged to unprecedented levels by the Abbott government a few years ago.
A new major challenge to the ABC’s independence is the current change, driven by One Nation, to the ABC Charter requiring it to be “fair” and “balanced” in its reporting. If you recognise these terms, that’s because it used to be Fox News’ catchphrase.
The ABC is not turning into the Polish Broadcasting Corporation, but it has clearly lost a lot of confidence lately. In Alberici’s case, it appears it bowed to government pressure when it should have stood its ground.
But getting heat from the government of the day (regardless of the particular side of politics) is an indication that a public broadcaster is doing its most important job (provided you get your facts right): holding power to account. If you bow to political pressure, you’re not doing your job.
A public broadcaster with a confidence problem is a serious issue for political and democratic wellbeing.
Globally, there are between ten and 15 properly funded public broadcasters (depending on what level of funding you define as proper) with enough funding and safeguards to be able to call themselves editorially independent. This means there are only ten to 15 large repositories of in-depth public interest journalism – globally.
So, the case is strong for the Australian public to get behind the ABC and ask it to snap out of its crisis of confidence. Then it can get on with the job of keeping power to account – just like Alberici tried to do.
A fierce bidding war is under way for the rights to stream and broadcast cricket for the next five years. The price is expected to reach A$1 billion, almost double the previous deal. Media companies are facing stiff competition because increasing viewer numbers are luring social media websites and other platforms into the race to host this content.
The price for rights keeps going up even though the Nine Network is losing money on its cricket coverage and Seven’s CEO Tim Worner has stated recent price increases for sports rights “are not sustainable”.
The Big Bash League, which is also broadcast internationally, is a huge driver behind the new rights deal. The new players interested in the streaming rights include telecommunications companies like Optus and Telstra, social media platforms (Facebook and Twitter) and Cricket Australia itself, which has its own website and app. This is on top of the traditional broadcasters like Nine and Ten.
Sport is key for broadcasters as they can attract advertisers with the promise of viewers who are watching live. Social media platforms and other websites want to lure viewers onto their platforms to discuss the games. Streaming platforms and telcos are trying to appeal to customers with access to exclusive content.
Other sporting codes have recently been through this bidding process, and the deals they have struck hint at what is to come for Cricket Australia.
The AFL media rights, which started last season and run through to 2022, were sold for A$2.5 billion. This is more than double the previous A$1.2 billion agreement.
The value of the NRL broadcast rights, starting this year, also increased substantially from A$1 billion to A$1.8 billion.
But the AFL deal also faced a backlash from fans after it restricted Telstra to streaming just a 7-inch video of live coverage – larger screens are filled with black space. This is true even for those who buy the A$89 subscription to the AFL Live app.
Fox Sports streams live full HD video as part of the deal.
New players are driving up the cost
One of the major drivers of the price of sports rights is the increase and uptake of streaming. Broadcasters want the rights to televise and stream the games, while tech companies, telcos and others are more interested in the streaming rights.
Last year’s women’s Big Bash League was streamed across cricket.com.au, Facebook and the Cricket Australia app, reaching 1.5 million people. This season, 47 of the matches were streamed on Mamamia, a lifestyle website aimed at women.
Social media platforms want live sport to attract large crowds that will then use the platform to discuss the event. Twitter has a deal to stream Major League Baseball games (and formerly had one with the National Football League).
Facebook CEO Mark Zuckerberg has described sport as “anchor content”. In other words, it will encourage people to watch more video on Facebook.
In addition to social platforms, Telstra and Optus have been competing with each other by offering exclusive content. Telstra holds AFL and NRL streaming rights, and also has a TV service, giving customers access to various content including sport.
And after all that, we get to the traditional broadcasters. Ten, now owned by US network CBS, will be unlikely to walk away from the success it has had with the Big Bash League.
Nine’s CEO, High Marks, has stated that the network also needs to have streaming as part of the sports rights.
We have seen Seven recently undertake a hybrid mode with its coverage of the Olympics and Australian Open tennis. The broadcaster offers a premium paid tier alongside its free streaming. This mode has created tension between free-to-air broadcasters and Foxtel, with requests for the government to remove the anti-siphoning rules that prevent pay TV bidding for particular sports.
Foxtel is currently not involved in broadcasting domestic cricket, but it is likely to be part of new negotiations. The government has awarded Fox Sports a A$30 million grant to support the coverage of women and niche sports. If nothing else, Fox Sports could seek to pick up the rights to women’s cricket, including the Big Bash League, which has had only a small percentage of games broadcast.
Cricket Australia has previously noted that media rights make up as much as 80% of its income. Whatever deal is struck will have a huge impact not just for the professional players, but for the grassroots as well.
Cricket Australia will want to get the most for its rights, but needs to make sure not to impact grassroots participation and attendance. This was one of the side effects in the United Kingdom when pay TV providers secured exclusive rights to broadcast the cricket.
There is a huge opportunity here for Cricket Australia to advance the way in which the game is delivered to all screens. But, as we can see, the changing media landscape means it needs to balance the needs of many stakeholders.
Among the four concessions concerning the ABC that senator Pauline Hanson extracted from the federal government in exchange for her support of its recent media ownership law changes, one in particular has the potential to do real damage to the national broadcaster.
This is the promised inquiry into the ABC’s competitive neutrality.
It has been on the agenda of News Corp for years to have the ABC’s wings clipped, for the obvious reason that it sees the ABC as a commercial rival. If News Corp had its way, the ABC’s big strategic move into digital broadcasting more than a decade ago would have been cut off at the pass.
So Hanson, whether she knew it or not, has played into the hands of New Corp on this, and given the government a political opportunity to do yet one more favour for Rupert Murdoch.
Since the government does not need a vote in parliament to set up an inquiry like this, it is easy to see how it might unfold.
An eminently well-qualified chairman could easily be found. To pick a name at random: Maurice Newman, former chairman of the stock exchange, former chairman of the ABC and now public ideologue opposed to public-sector broadcasting. He wrote a polemic in The Australian in April asserting that the ABC and SBS no longer served a public purpose.
The government could effortlessly craft terms of reference consistent with that axiom of politics – you never hold an inquiry without knowing the outcome.
A high-profile firm of economic consultants could be engaged to conduct an analysis of the impact of the ABC’s activities on private-sector media.
Using suitable assumptions, a selection of data and a fitting framework of economic theory, it might easily find that the ABC, despite manifold inefficiencies, was indeed using its public funding in an anti-competitive way to crowd out the private sector.
Recommendations would naturally ensue that the range of ABC activities had strayed well beyond the confines imagined by its founding fathers in the early 1930s. It would therefore follow that its funding should be cut in order to see it focus on outputs that no commercial broadcaster would touch with a barge pole.
Of the other three concessions to Hanson, the one likely to do the most mischief is the one requiring the ABC to publicly disclose the salaries and conditions of all staff whose packages amount to more than A$200,000 a year.
While in principle it seems reasonable that the salaries of people on the public payroll should be public, in fact the pay of individual public servants is generally a private matter.
This is the case not only because a person’s financial affairs are inherently private, but because it is a disincentive for good people to join the public sector if their private affairs are going to be trawled over in public for political purposes.
It has already happened with ABC salaries when they were inadvertently released under freedom-of-information laws a couple of years ago.
The combination of fame and their type of work magnifies the privacy issue for high-profile ABC journalists and presenters. No-one cares what some obscure under-secretary in the Department of Veterans Affairs gets paid, but politicians like Hanson salivate over the pay of people like Leigh Sales and Barrie Cassidy.
The remaining two concessions are not likely to have much impact on the ABC.
The one that got all the attention at the start was the insertion of “fair” and “balanced” into the ABC’s charter.
This is a sideshow. The ABC’s charter is contained within section six of the ABC Act, so amending it will require a parliamentary vote. Senator Nick Xenophon has said his team will not support it, and since his team’s support is likely to be necessary, it looks like an empty gesture by the government.
In any case, the requirements for fairness and balance are already built into the ABC’s editorial policies, which are binding on ABC journalists, so the practical effect would be nonexistent.
However, a parliamentary debate on the ABC’s impartiality would keep this matter bubbling along in the public mind and furnish an opportunity for reactionary politicians to further ventilate their suspicions.
Finally, there was a concession concerning provision of broadcasting services to regional areas. The ABC has already announced a A$50 million package
to enhance regional services. And anyway, this is a level of operational detail that generally lies beyond the reach of politicians.
A bit of cosmetic arm-wrestling between Communications Minister Mitch Fifield and the chair of the ABC, perhaps some pointed questions at Senate estimates, and a tweak of the ABC’s budget will probably satisfy this concession.
Taken together, then, three of these concessions have considerable nuisance value. But the fourth contains the seeds of a serious challenge to the ABC’s future.
This is an edited extract from The Weather Obsession by Lawrie Zion, published by Melbourne University Press.
When Olympic swimming champion Giaan Rooney was asked to fill in presenting the weather segment on Melbourne’s Channel Seven weeknight news program just before Christmas 2012, she was taken aback. She pointed out that she knew nothing about weather and that her credibility was in sport. “Don’t worry, just do the weather,” was the reply from the network. Six weeks later, the 30-year-old Rooney was invited to continue in the role, replacing the 52-year-old presenter and trained meteorologist David Brown, who had been presenting on Seven for 20 years.
As it turned out, Brown remained with the network and eventually went on to present the weather for Seven’s Sydney weeknight bulletin. But the switch from Brown to Rooney illustrates a dilemma that has never been resolved. Just who should present the weather on television?
Commenting on Rooney’s appointment soon after the announcement, the Sunday Herald Sun’s Susie O’Brien wrote:
…the old adage that people like a mature man to tell them the serious news and a pretty face to tell them the weather still seems to apply. The real question is why we need a nice-looking woman who isn’t a meteorological expert to tell us the weather at a time when climate issues have never been more
important. The fact that we are still having these debates is a sign we have a long way to go. Sadly, I think we will continue to see women used as decorations on network TV for a while to come.
What O’Brien saw as an anachronistic decision needs to be understood in the context of the role of weather segments in television news bulletins, and the changing demographics of broadcast news audiences.
Weather presenters have long been a crucial component of any television news team, and are promoted as such. For many in the audience, they’ve also been the main conduit of weather information. Ten years ago 90% of Australians received at least some of their weather information from television. This has since fallen to 71%, according to a Bureau of Meteorology survey. But that’s still a lot of eyeballs. And with their segments usually perched at the end of bulletins, the extent to which weather presenters connect with viewers helps to determine whether their station can carry the valuable news audience over to the start of the next program.
When it comes to sheer numbers, TV news audiences may have generally held up well with older viewers, but younger viewers aren’t drawn to these programs to anything like the extent that their parents were. The result is that around half the audience is over the age of 50, and therefore more likely to go for the familiar than the experimental. So while the steady evolution of graphics means that weather reports look very different now from how they appeared in the early days of television, the format has remained more predictable than the weather itself.
We all know the ritual: What happened today? What will happen tomorrow? And beyond tomorrow? Across the country? If it’s a local bulletin the state and/or city forecast will precede the sign-off. As Channel Nine Brisbane news presenter Andrew Lofthouse has put it: “The weather reports are still one of the constant reassuring things that people can rely on.” This might partly explain why changes to who presents the weather attract so much attention within the media itself.
Despite an overall tendency to play it safe, what this actually means tends to fluctuate, with appearance, personality and specialist credentials all deemed to be relevant factors to varying degrees. As O’Brien put it in the context of Brown’s replacement by Rooney: “Presumably Channel Seven has tired of the serious approach and in the midst of falling ratings is going for the well-worn route of installing an attractive female to freshen things up.”
Hiring attractive women as weather presenters is a time-honoured global tradition. Writing about the history of TV weather in America, Robert Henson points out that it became clear in the 1950s that women could be accepted as weathercasters, as long as the focus was kept on clothing, hairstyle or anatomy. “So began the brief ascendancy of ‘weathergirls’, a term that speaks volumes about the differences in status between these women and their male counterparts in weathercasting.”
But while the weathergirl craze abated in the United States by the early 1960s, in Australia, where television had been introduced relatively recently, it was just beginning. In 1961, an item in the Bureau’s in-house publication, Weather News, noted that in Brisbane, “the majority of stations appear to favour the glamour-girl type of telecaster for weather presentations”, and that “Bureau staff have had the pleasure of indoctrinating and briefing two ‘Miss Australias’ and one ‘Miss Queensland’ in the short time that television has been operating in this State”. The background training included explaining the need for weather information to be presented seriously and faithfully, “and particularly for the more glamorous the need to submerge their glamour behind the prosaic highs and lows”.
In 1965, Melbourne’s Channel 9 hired model Rosemary Margan to present the weather. One evening in 1969, she appeared in a fur coat before stripping to a bikini during her live segment, sparking a steady stream of responses from viewers. In the 1970s, when searching for a replacement for the then pregnant Margan, the station hired the 15-year-old schoolgirl Kerry Armstrong, whose job application had led them to believe she was 22. While often appearing in short, tight garments, Armstrong, who went on to become a celebrated actor, did on one occasion break away from the standard weather script, when she informed viewers that “due to the drought, 1,000 head of cattle died. But don’t worry, beachgoers, it’s going to be another great day tomorrow with a top of 35 degrees”.
Decades later, the “weather girl” tag has proved hard to shake, as current Melbourne Channel Nine weather presenter Livinia Nixon told The Age in 2010. “TV and radio are very much boys’ clubs; they’re industries that are still very, very male-dominated,” she says, acknowledging that a male who presents the weather is a weather man, whereas she is a “weather girl”. “I wonder at what point you lose the ‘girl’?” she asks, having presented the segment on Nine’s 6pm weeknight news since 2004. “What age do you have to reach to not be called a girl any more?”
What if the woman presenting the weather has a relevant tertiary qualification? Back at Seven in Melbourne, Giaan Rooney remained in the role of weather presenter until taking maternity leave, when she was replaced by model and television personality Jo Silvagni, who was in turn replaced in late 2014 by Jane Bunn – who, as it happens, is also a qualified meteorologist. Her appointment also attracted media attention. When Nixon was asked about her new on-air rival, she told the Herald Sun that she didn’t think this would lend Seven’s bulletin any more clout. “I think it’s fantastic that Jane’s a meteorologist – hats off to her for doing the hard yards – but I’m confident working in conjunction with the Bureau (of Meteorology),” she says. “I feel very confident relaying all the information we get from them. Their accuracy rate has gone up over the years.”
Did Nixon, who had replaced the veteran weather presenter Rob Gell on Nine in 2010, have a point? A trained meteorologist of either gender might make the weather segment seem more credible to some, but would they enhance the substantive quality of information that is delivered? Historically the Bureau has insisted that provision of its information comes with a requirement that the media doesn’t mess with the message. TV stations can and do use the services of private weather companies to provide graphics, but the actual forecasts are still meant to be broadly consistent with the Bureau’s. So whichever nightly news channel you watch, won’t the next-day forecast be essentially the same?
With this and others questions in mind, I went to Melbourne’s Seven studios in Docklands to meet Bunn. After completing a Bachelor of Science at Monash University and a Graduate Diploma in Meteorology, Bunn worked for the Bureau in Sydney before turning to presenting the weather on television. “I loved the forecasting part of it but hated it when the message was being changed in the
media by people who got their terms muddled, so I decided I wanted to present it,” she tells me, citing an incident where a forecast of “fine and mostly sunny” was abbreviated to “mostly fine”. “You can have trust in what we are saying because that message might be jumbled up elsewhere. You’re better off
getting your weather from a meteorologist than a presenter because you know it’s as good as it can be.”
But Bunn doesn’t simply recite the Bureau’s forecast. Before her main segment goes to air at 6.55pm she checks the forecast models from Europe and Australia, which are updated after the Bureau releases its late afternoon forecast, to see if there are developments that might require some additional interpretation. She also analyses those same models to take the Bureau’s seven-day forecast one step
further, providing viewers with an eight-day outlook.
For all her specialist knowledge, however, Bunn’s appearance has also been a talking point both in social media and in the gossip columns. “Jane Bunn had the farm boys panting when she was the weather girl on regional television,” began one Herald Sun story, before conceding that “she doesn’t fit the weather girl stereotype”. Bunn accepts that her image is to some extent constructed by others. When I bring up the subject of how she is characterised in social media, she points out that other people have considerable input into how she appears before the camera. “I’ve purposely made it so hair and make-up and wardrobe decide what I actually look like – and that allows me to concentrate on my craft which is forecasting.”
As well as presenting all the usual weather details, Bunn has the scope to discuss seasonal forecasts and weather news in her segment, which provides her with the opportunity to embed her meteorological knowledge in her reports. Despite such individual touches, however, weather presenters in Australia, including Bunn, stick far more closely to the official forecasts than their American counterparts. In the United States, it is commonplace for local TV stations to hire meteorologists to present the weather, and many of these develop their own forecasts, which may be based on National Weather Service (NWS) data, or on those of other private providers whose predictions may also differ from those of the NWS. And television has long been a much more popular source of weather forecasts than the NWS. A 2006 survey of more than 1,400 Americans found that 72% of them caught a local TV forecast at least once per day, but less than 20% obtained daily forecasts from NWS websites, with just 4% tuning in to National Oceanic and Atmospheric Administration (NOAA) Weather Radio each day.
It might be just as well that Australia has not gone down this track. As American data journalist Nate Silver has noted in the American context, “the further you get from the government’s original data, and the more consumer facing the forecasts, the less reliable they become. Forecasts ‘add value’ by subtracting accuracy.” This is particularly the case with precipitation predictions. Non-National Weather Service forecasters, it turns out, tend to overestimate the probability of rain. There is a logic of sorts to this “wet bias”, says Silver. “People don’t mind when a forecaster predicts rain and it turns out to be a nice day. But if it rains when it isn’t supposed to, they curse the weatherman for ruining their picnic.”
In the short term, Ten has to focus on reducing costs by renegotiating contracts with its suppliers. Over the long term, Ten has to contend with changing demographics and falling television advertising. The company has to receive more revenue from the content it already has, and the best way to do that may be through a tie-up with Foxtel.
How to make Ten viable
Entering voluntary administration provides an opportunity to reorganise Ten and renegotiate contracts. Changing media ownership laws would doubtless make this easier, by allowing some of the major shareholders to take the company private.
In the short term, Ten should aim to reduce expenses, aiming for annual savings of A$80 million. In a release to the ASX, Ten talks about renegotiating contracts with the studios it buys content off, notably CBS and 20th Century Fox. Ten had already identified these cost reductions, but entering voluntary administration will give the company a stronger bargaining position.
However, these negotiations are just the beginning of content changes. Ten will need to produce content more cheaply and aligned to a changing target demographic. As younger viewers moved away from traditional television, Ten’s programming has suffered. Voluntary administration will give Ten more power to renegotiate contracts with domestic suppliers too.
Longer term, Ten needs to protect and expand its revenues. With television advertising declining, Ten needs to reach more viewers so that it can maximise the revenue from the content it has. Distributing content through more channels, such as realising the full potential of streaming, would enable more efficient use of content and increase the potential audience.
But developing these channels by itself might not be a viable option as Ten has neither time nor financial resources. This is why it makes sense to tie up with Foxtel, already a major shareholder and a big player online.
A common theme to these strategies is that Ten needs to compete more effectively for content and advertising revenues. This means that regulatory constraints must be removed if it is to fight for long-term financial sustainability.
Overcoming financial hurdles
A major contributor to Ten’s recent half-year loss was a one-off impairment charge – the company wrote down A$214.5 million from the value of its television licences.
But, even allowing for this one-off item, there was still a substantial loss and the financial pressures have been building for some time. Much of this pressure stems from a decline in revenues from A$998 million in 2011 to only A$689 million in 2016. The 2016 annual report even notes a structural change in advertising as a risk facing the company.
Over this same period Ten has been working to reduce operating costs, but obviously this has been difficult. The financial reports do not give exact breakdowns of costs, but we do know that content contracts with CBS and 20th Century Fox are substantial and need to be reduced.
If there is one thing we can be certain of, it is that there must be substantial change in the business for Ten to recover.
Further contributing to Ten’s woes are loan facilities that expire in December. This includes borrowing that amounted to A$73.8 million at the end of February and which needs to be repaid in the short term.
Unless Ten can negotiate an extension to its loan facility at the Commonwealth Bank, the solvency of the business becomes doubtful. Failure to get backing for a new loan to replace the current one in December is reportedly one of the reasons Ten decided to go into voluntary administration.
Previously, major shareholders had provided guarantees for Ten’s banking facilities, but this is difficult to justify given the state of the business. Regardless, it would not resolve the underlying issues. For Ten to be viable, it needs to get a handle on costs and reach more viewers with the content it has.
Reporters at the Ten Network relayed the news of their employer’s voluntary administration, during a staff meeting. The network was looking to refinance to the tune of A$250 million, after its existing finance was due to expire on December 23.
But Ten’s directors said they were left no choice but to appoint administrators from KordaMentha to try to recapitalise or sell the business. Lachlan Murdoch, who owns a 7.7% share of Ten (via his private investment fund Illyria), and Bruce Gordon, who owns 14.96% (via Birketu), are now teaming up to offer a rescue package to restructure the network, though the details are still to be sorted out.
This will see the two shareholders treated as an association rather than a merged entity to prevent triggering a compulsory acquisition provision or a breach of the existing two-out-of-three cross-media ownership rule.
While this all may appear to be contemporary issues for the company, Ten has faced many hurdles during its lifespan of little over 50 years.
Ten has been in trouble before
The network began in the 1960s, originally named the Independent Television Network, before promptly being renamed the 0-10 Network. The network’s Melbourne-based station (ATV-0) began its official broadcast on August 1 1964, with other metro stations starting the year after.
Ken Inglis argues in his book, Whose ABC?, that Ten struggled during its early establishment and that the Whitlam government made attempts to buy the network to use it as a second channel for the ABC.
But the network debuted popular shows during this time, such as Number 96, and its high ratings pushed the price higher than the government was willing to pay.
Ten also faced a crisis after Frank Lowy bought the network from Rupert Murdoch. Murdoch was forced to sell due to changes to the media ownership laws in 1987, which prohibited a media company owning both a newspaper and television station in the same city.
Lowy said that “TV was like any other business”, although he quickly found out it was not. Lowy asked Ian Gow, who had previously worked at the Nine Network, to run the network. According to Gow, Lowy had “bought the worst house in the best street and [wanted] to renovate”.
Despite the initiatives Gow implemented, including selling off the Adelaide, Perth and Canberra stations, the network was forced into receivership in September 1990. Communications corporation CanWest Global bought 57.5% of Network Ten from Westpac Bank for A$275 million and then re-established a capital city network in 1995.
During 1999 Ten formed a joint venture with Village Roadshow Limited, Village Ten Online (VTO). Network Ten argued this was a “strategically defensive move” to develop and market content for the next generation. Ten stated in its 1999 annual report that the joint venture planned to produce a series of websites targeted specifically at the under-40s market.
The first major announcement of the venture was Scape.com, which was launched in October 2000. The CEO of Ten Ventures, Peter O’Connell, described Scape as:
An exciting new presence on the Internet, with all the necessary attributes to appeal to increasing numbers of online service users.
But in March of the following year, less than six months from its launch, Village Roadshow and Network Ten released a joint press release stating that Scape had been placed in voluntary administration and ceased operation. Both companies had contributed A$22 million to the joint venture.
Ten’s future is unclear and this will not only impact the network, but some of its key stakeholders.
This recent announcement will affect Bruce Gordon, who holds a 14.96% share in Ten and also owns WIN Television, in two ways. The first is due to his financial stake in the network, which could expose his investment companies to liability. Secondly, WIN Television is the regional affiliate of Ten. Any changes to Ten or its programming would impact WIN and its regional stations across Australia that rely heavily on Ten’s programming.
Foxtel is another major shareholder that could be affected by any changes made to Ten. Any restructure or sale could impact the recent approach by both Foxel and Ten to partner in programming including GoggleBox, Common Sense, A-League and V8 Supercars. This approach could be used as part of the negotiations for the upcoming Cricket Australia media rights. Ten holds the rights for the Big Bash League and, while it would not like to lose these rights, a partnership with Fox Sports could allow it still to gain access to some games.
What is clear is that Ten will have to attempt to break the traditional broadcast model and rethink what a television network is in the current media landscape. If it can achieve this it could potentially place the network in a strong position to compete not only with other local television broadcasters, but also with new media players that are stealing their ad revenue and audience share.
How Australians watch cricket on screens in the future could depend on what happens with the Nine Network’s current discussions with Cricket Australia over the 2018-23 media rights.
UBS media analyst Eric Choi said the current deal costs Nine about A$100 million a year but generates only A$60 million to A$70 million in gross revenue.
Choi said the network should either ask for access to more content at no additional cost, or step away from its long association with cricket.
The ramifications of Nine’s decision could be broad, impacting not only its potential revenue and viewers, but also participation rates among Aussies playing grassroots cricket.
Cricket’s current standing
The current media rights deal for cricket includes the Nine Network and Network Ten. Nine has the rights to international tests, one-day internationals and T20 international games played in Australia, whereas Ten has the rights to the Big Bash League (BBL).
The free-to-air (FTA) broadcasters are also currently requesting that the government reduce license fees and reconsider plans to further restrict gambling ads during the broadcast of sports.
Ten has said it expects its revenue to be “above the 1.2% increase” it outlined in February this year. Yet it will still need to undertake a “significant focus” on a corporate cost-cutting program and profitability as a priority.
With FTA broadcasters under financial pressures, any increase in new rights will require new stakeholders.
Foxtel currently shows international cricket matches played overseas, but does not have local coverage rights. If it could gain local cricket rights, this would further strengthen Foxtel’s sports offering of AFL, NRL, A-league, V8 Supercars, and many international sports.
Australia’s anti-siphoning regulation could prevent Foxtel completely dominating the cricket media rights. But this list is expected to be trimmed further by the government this year, furthering opening up the sports media battleground for pay television in future rights deals.
The future for digital rights
Digital rights will also be a major consideration with the new cricket media rights. While most would be looking at Telstra and Optus, there have been new players in this area who may also wish to place a bid.
Currently Cricket Australia has the Cricket Australia Live app which allows users to pay a subscription (A$30 per year or A$5.99 a day) to gain access to live streaming of games, but the new rights could also see this change.
Optus may continue its affiliation with cricket. It recently become the official mobile media partner of Cricket Australia, and principal sponsor of the Melbourne Stars Big Bash League team. Customers can access cricket content via the Optus Sports app, which also includes Optus’ recently acquired English Premier League.
Twitter has had success with broadcasting the US National Football League (NFL) and the Melbourne cup last year. This year it signed a two-year deal with the US National Lacrosse League. Twitter may consider its interest in a global sport like cricket.
Amazon, which recently launched its Prime Video service in Australia, could also be a contender. This year Amazon won the rights for NFL Thursday night matches. It paid US$50 million for ten games, five times the price paid by Twitter last year. Amazon may look at the cricket as another potential global sport to add to its catalogue.
Can you “slice and dice” too much? This is a question being asked in the US by CBS chief executive Les Moonves with regard to the NFL.
Adding another stakeholder to cricket will impact the viewers’ experience. This year the new AFL media rights created some frustration linked with the way the rights had been negotiated, particularly the digital rights.
Telstra, the digital rights holder, is restricted by its agreement to limit live match videos to a 7-inch screen size. Highlights and replays are available in full-screen size 12 hours after the match ends. (Foxtel, meanwhile, can stream the games full-screen.)
This change has outraged some fans who paid the A$89 subscription fee for the AFL Live app. Because of the screen size restrictions, Telstra users with a large phone or tablet have a large amount of black space on their screen.
The media rights for sport can be looked at far more broadly than solely the coverage of the game itself.
In the United Kingdom there has been ongoing debate associated with cricket’s coverage. Since the sport moved to pay-TV, there has been a decline in participation levels, which many argued is primarily due to the game no longer being broadcast free to air.
There are now steps being taken to introduce a new Twenty20 tournament in the UK, built around the success of the Indian Premier League and Australia’s BBL, which had some games live broadcast in the UK during the last season.
This is an interesting case study for Cricket Australia, which only last year announced cricket as “No 1 as the current top participation sport in Australia”.
Any changes to the rights that impact the percentage of Australians with access to the coverage, could also see a decline in participation based on the UK experience.
It’s about time – indeed past time – that politicians were challenged and taken to task over their refusal to answer questions. My solution – don’t let them back on if they don’t answer the questions asked.
Has Q&A put some spell of madness over the government and their media mates?
A straightforward case of the public broadcaster making a mistake (in my view), acknowledging it and getting a blast from critics has turned into a Coalition and News Corp feeding frenzy that is nothing short of absurd.
In the latest developments on Tuesday:
Deputy Prime Minister Warren Truss said the government leadership team decided before parliament rose to boycott Q&A. This group includes Agriculture Minister Barnaby Joyce, who was, however, surprised and angry when Tony Abbott told him on Sunday he could not appear on Monday’s program. Joyce was present at the meeting; Truss said that “maybe he hadn’t interpreted the decision the way others had”. Joyce, now not commenting, has been made to look bad by both Abbott and his own party leader.
Neither Malcolm Turnbull’s office nor Abbott’s office could or would say whether Turnbull will be a panellist, as scheduled, next week.
Abbott refused to answer questions on Turnbull’s appearance or non-appearance, declaring that “what I’m not going to do is give further advertisement to a program which was, frankly, right over the top”.
Could Abbott have been oblivious to the irony? He and the government – together with News Corp – have been giving massive publicity to the program. They are all going “over the top”. This is an exercise in obsessive behaviour and attempted bullying.
News Corp is driven by ideological and commercial considerations.
Abbott is driven by – what exactly? Deep tribalism: the belief that the ABC is “them” – defined by the Prime Minister’s Office as anyone who is not “us”. A desire to talk up national security on every occasion. A wish to play to those in the backbench and the conservative base who see the ABC as an enemy.
But surely even Abbott sees the ridiculousness of the situation into which he has put himself and the government.
The ABC is on the whole a very respected institution. There is little broad political gain in taking a battering ram to it, although that racks up brownie points with News Corp and some in the Liberal right.
An Essential poll, published on Tuesday, found most people either thought the ABC was not biased to the left or the right (36%) or didn’t have an opinion (40%); 22% believed it was biased to the left and 3% to the right. People’s perceptions are correlated with how they vote. This poll comes after sustained pillorying.
Monday’s Q&A had no government representative after Joyce pulled out. Abbott might have hoped his friend Greg Sheridan, foreign editor of The Australian, would be a helpful voice. But Sheridan roundly criticised the ban and also the government’s legislation, which Labor supported, that will stifle criticisms from professionals such as doctors working on Nauru and Manus Island.
Abbott is now on sticky fly paper with the ban. If he retreats, it’s embarrassing. If he persists, ministers will be unhappy and the government will stay unrepresented on the program. Turnbull’s position must be clarified soon, unless he is willing to tolerate for days an intolerable personal situation.
Asked how long ministers would not be appearing Truss said, “well, essentially we’re expecting the ABC to demonstrate that it’s learnt from this error of judgement, and that the program will be better run in the future”. Balance was needed in audience and panels and the subject matter should “not essentially be catering to one sector of the audience”.
Obviously the ABC is in a special position in relation to “balance”, because it is the public, taxpayer-funded broadcaster. Privately owned media outlets have the right to be “unbalanced”. But it would be heartening to hear leading figures in the government, just once in a while, speak as though “balance” was a journalistic virtue to be pursued more widely.
Abbott is now impatient for the review of Q&A that the ABC has commissioned from journalist Ray Martin and former SBS managing director Shaun Brown. He linked the quashing of Joyce’s appearance to the inquiry being underway.
The review will take quite a while to be finished. If Abbott lifted the ban for Turnbull he would not have the hook of a completed review – so how would he square this with his decision on Joyce? If he insisted Turnbull not appear, this would further worsen relations between them.
On Tuesday, Martin described Abbott’s ban as silly, and observed: “It’s clearly a political issue at the moment in terms of terror. I think we’ve already started looking towards the next election.”
Martin also defended Q&A host Tony Jones. “I suspect that Tony Jones was just as tough on the Labor government as he has been on the Coalition.”
Needless to say, Martin’s comments – ahead of the review – just give more fodder to critics of the ABC.
But like everything else, they help ensure Q&A doesn’t really need promos anymore.