Bill Shorten has moved to make the ABC an election issue, promising to reverse the Turnbull government’s $83.7 million budget cut and to guarantee funding certainty over the broadcaster’s next budget cycle.
Ahead of appearing on the ABC’s Q&A program, Shorten and frontbench colleagues declared the Coalition had “launched the biggest attack on the ABC in a generation”.
In recent months Communications Minister Mitch Fifield has sent a stream of complaints to the ABC about stories, both online and on air, contesting facts and interpretations. The Prime Minister’s Office has also complained. Government frontbenchers and backbenchers frequently make cracks at or about the ABC, echoing a theme of many conservative commentators.
The ABC is also under constant attack from News Corp, driven by both ideology and commercial interests. The government has an inquiry underway into the ABC’s competitive neutrality, which was part of a deal with Pauline Hanson but also important in the context of News Corp’s argument about the government-funded ABC encroaching on financially strapped commercial media.
When the government made the $84 million budget cut – which took the form of a freeze to indexation – Treasurer Scott Morrison said “everyone has to live within their means”. Managing director Michelle Guthrie said that “the decision will make it very difficult for the ABC to meet its charter requirements and audience expectations.”
In a statement Shorten, communications spokeswoman Michelle Rowland and regional communications spokesman Stephen Jones said Labor’s commitment would ensure the ABC could meet its charter requirements, safeguard jobs, adapt to the digital environment “and maintain content and services that Australians trust and rely on”.
They said the Coalition since 2014 had “overseen $282 million in cuts to the ABC that has seen 800 jobs lost and a drop in Australian content and services”.
“Labor will stand up for the ABC and fight against the conservatives’ ideological war against our public broadcaster,” the statement said.
The promised investment “demonstrates Labor’s commitment to the ABC’s independence and to maintain the ABC as our comprehensive national broadcaster.
“Now, more than ever, Australians need the ABC – our strong, trusted and independent public broadcaster.
“At a time when too many Australians feel disengaged from their democracy and distrustful of their representatives, Labor wants to restore trust and faith in our institutions. Part of restoring trust is is supporting a healthy public interest media sector, and protecting that trusted institution – the ABC”.
The government agreed to do this in the form of an inquiry into the ABC’s competitive neutrality – and broadened it to include SBS.
It was clear at the time this had the potential to do real damage to the national broadcaster.
Competitive neutrality principles say an organisation should not enjoy an undue competitive advantage by virtue of it being government-funded. It is suitably arcane camouflage for an inquiry whose real purpose is to put pressure on the ABC over its news service, which Hanson had alleged was biased against her.
And now we know the shape of this competitive neutrality inquiry. We know who is conducting it, and last week we got to see the issues paper that the inquiry put out, which tells us what it is going to cover.
Scope of the inquiry
The chair is Robert Kerr, who has a Productivity Commission background and impeccable credentials as a free-market economist. Joining him in the inquiry are Julie Flynn, a one-time ABC reporter who used to be CEO of the commercial TV lobby group Free TV Australia, and Sandra Levy, the former head of television at ABC.
This all seems perfectly reasonable, until you remember this is mainly about online media. In that case, why have two people with television backgrounds on the panel?
Online is where the real action is now. Data from the Australian Communications and Media Authority included in the issues paper show just how dramatic the shift has been from traditional television viewing to digital online platforms for media consumption. In 2017, Australians aged 18-34 spent an average of 9.2 hours per week watching video content online compared to just 3.8 hours watching free-to-air television.
Mark Scott foresaw this when he was managing director of the ABC and drove the broadcaster hard into the digital sphere. He realised that if the ABC was not a relevant provider of digital content online, it would soon cease to be relevant.
That’s why the other big media players, especially Rupert Murdoch’s News Corp, have lobbied relentlessly to have the ABC’s wings clipped in this arena. Hanson, wittingly or not, played right into News Corp’s strategy.
As for the issues paper, the giveaway is on page 11.
There, it refers to the requirement in the ABC Act that the ABC “take account of the broadcasting services provided by the commercial and community broadcasting sectors of the Australian Broadcasting system.” In other words, the ABC is discouraged from just replicating what the commercial broadcasters do.
In that context, the paper then addresses this question to the ABC: How does it apply this requirement specifically to its on-air, iView and online news services? Nothing else. Not its drama or documentaries or narrative comedy or children’s programs. Just its news services.
The reason? That’s the part of the ABC that Hanson detests. So there’s the pay-off.
There are some broader competition questions, as well, but the only part of its vast portfolio the ABC is specifically asked about is its news output. Yet, if there is one category of program content that most obviously and unmistakably distinguishes the ABC from commercial broadcasters, it’s news.
Time for responses
Then the issues paper asks “other stakeholders” – basically the ABC and SBS’s commercial broadcasting rivals – a range of questions about ways in which they think they may have been harmed by any undue competitive advantage enjoyed by the public broadcasters.
There is no indication the answers to these questions are going to be subjected to any cross-examination by the ABC or SBS. Not that there would be time for that anyway, with just three months between the deadline for submissions in response to the issues paper on June 22 and the completion of the report in September.
So, the inquiry is a quickie. And by its own admission, it’s trampling over ground already covered 18 years ago by the Productivity Commission.
Nonetheless, the inquiry is likely to provide the Turnbull Government with ammunition should it wish to mount an attack on the ABC’s scope of operations (especially online) and give Hanson what she really wants: a rolled-up piece of paper with which to smack the ABC around the head.
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.
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.
An early finding of the ARC-funded research I and my QUT colleagues are doing on the Australian political media is the gradual withdrawal of free-to-air commercial TV from the current affairs space. If I may paraphrase an old Soviet joke – there’s as much current affairs in A Current Affair as there is truth in Pravda. Which is to say, not very much.
The reasons for this are clear. What we like to call “serious” current affairs – as opposed to the glorified product placement that comprises most of the program of that name on Channel Nine – rarely attracts the audience ratings that game shows, reality TV and other cheap and cheerful formats achieve.
In a hyper-competitive media marketplace, with more platforms and more choice for consumers than ever before, prime-time free-to-air is just too important to the shareholders’ bottom line to be given over to anything that won’t bring eyeballs to the screen.
This is a global trend. All over the world, commercial TV companies that used to make high-quality, high-impact current affairs shows such as the UK’s World In Action have abandoned the territory.
Don’t get me wrong. I love a dose of well-made reality TV as much as the next person, and can even see the point of the Kardashians. And by “quality” current affairs I don’t mean white middle-aged men in suits talking about interest rates – it can be about topics of undoubtedly human interest, dramatic and sensational, but hugely important to people’s everyday lives such as the epidemic of domestic violence, or corruption in FIFA.
Current affairs TV can and should address the personal and the private, the things that matter to us all. And there’s nothing wrong with making that material, along with the big picture issues of economic and politics, accessible to an audience not all of whom have uni degrees.
My point is that even this broad definition of current affairs is increasingly scarce in the free-to-air commercial landscape. We have the ABC, legally mandated to provide such content. And Sky News does an excellent job of providing real time news coverage of public affairs, although its audience is restricted to subscribers of Foxtel. And there are exceptions in the free-to-air space.
Andrew Bolt’s Sunday show on Channel Ten is an increasingly rare free-to-air political debate slot. And as long as you accept its provocatively controversialist style – which helps in the ratings competition, of course – it is very watchable.
And then there is 60 Minutes on Nine, which this week demonstrated what can still be done in the field of current affairs journalism by the commercial broadcasters. In 2002, Cardinal George Pell was interviewed by Richard Carlton on 60 Minutes about payments he had allegedly authorised to victims of paedophile priests, including the nephew of convicted abuser Gerald Ridsdale.
On YouTube, you can watch Pell obfuscate with cringe-inducing obviousness as the journalist pressed him on “the conspiracy of silence”. This was tough adversarial journalism of the very best kind, and very courageous for its time.
The most recent 60 Minutes update interviewed Peter Saunders, a Vatican-appointed commissioner who is investigating child sexual abuse in the Catholic Church. Saunders condemned Cardinal Pell in the harshest terms, to the extent that Pell is reported to be consulting his lawyers. A bevy of Australian archbishops subsequently wrote an open letter defending Pell, so damaging was the item perceived to have been.
Now, like most stories of this kind, there is more than one side to it, and there can be no rush to judgement until Pell has had his say before the Royal Commission. But this item, when taken alongside the statements of abuse survivors who have already testified in Ballarat and elsewhere, and other evidence such as the minutes of a Church meeting where the need to move Ridsdale to another diocese was discussed, has performed a real service to the victims of paedophile priests – a public service.
Commercial television has a long and honourable history of fearless current affairs journalism, in Australia and overseas. 60 Minutes’ work on Pell exemplifies that tradition. Long may it continue.