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TV rights deal appears close to being finalised

The Age

Wednesday February 9, 2011

By JON PIERIK

THE finish line in negotiations for the new AFL broadcasting rights appears in sight, with television executives hopeful a deal will be finalised by the start of the home-and-away season.TV industry executives last night said negotiations were expected to intensify within a fortnight, with the view to signing off on a new five-year deal, beginning next year, by the time Carlton and Richmond clash on Thursday, March 24.Contractually bound partners Seven and Ten are believed to be keen on retaining the status quo, with Seven to keep Friday-night and Sunday-afternoon matches, and Ten having back-to-back games on a Saturday.However, it's unclear if all Friday-night matches will be shown live in Melbourne by Seven.Nine is also in negotiations to reclaim the rights for the first time since 2006, although there has been speculation the network is only interested in ensuring Seven and Ten pay the maximum price.Nine has previously said it was interested in broadcasting Monday-night matches, but rival executives have questioned the economics of this, particularly as Nine will soon be heavily involved in the renegotiation of rights for the National Rugby League.Foxtel will have five matches per weekend under the new AFL deal from 2012 when a ninth game is held once Greater Western Sydney joins the competition.Under the revamped anti-siphoning list, Foxtel can bid directly for matches and will set its sights on better quality fixtures. Under the previous rights, it had to buy the rights from the free-to-air networks."I would be surprised if something hasn't occurred by the start of the season," one TV executive said last night.However, AFL chief executive Andrew Demetriou told The Australian Financial Review this week: "I've been hearing [a deal is] going to be done this week or next for some time now, but I don't think we've got to that stage," he said. "I'd even say we haven't even got to the heavy-lifting stage yet."Demetriou's comments prompted Fusion Media strategist Steve Allen to suggest the AFL wanted discussions to continue because it "seems like the networks might have the upper hand" and the league may be struggling to secure the price it wants."When somebody wants negotiations to go on and on, they would want them to gerry up the price while the networks say this could be finished in a minute," Allen said."They [networks] are standing pretty firm, the way I read it. Demetriou wants to engineer extra competitive tension."The AFL is keen to pocket $1 billion for the new deal, up from $780 million. Discussions have been more complex this time for several reasons.Where Seven had the first and last rights in 2006, this time that does not exist, meaning its first bid would appear to have to be spot on.The new anti-siphoning list has also caused problems, with the Communications Minister Stephen Conroy yet to disclose the "mechanism" guaranteeing the best matches will be seen on free-to-air on Friday and Saturday nights.This mechanism will also allow matches involving West Australian and South Australian teams to be shown live on free-to-air in their home states, perhaps on the new digital channels.The revamped Ten board, now featuring media moguls James Packer and Lachlan Murdoch, and mining magnate Gina Rinehart, along with the private equity involvement in Seven and Nine has also meant that, as one executive put it, decisions were more "highly processed".Allen said securing the rights could be difficult for Nine. "The problem for Nine is they can't go back to the way it was 10 or 12 years ago when they used to play AFL in the south and NRL in the north. Neither code will accept that any more because both are trying to get into each other's territory. By our calculations Nine is making a killing on the NRL but we doubt whether AFL is that profitable to Seven, Ten or pay-TV."

© 2011 The Age

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