Those Were The Days – Farewelling an Old Friend in Australia’s Battle for Cricket Media Rights

In 1968 Mary Hopkins famously sang “those were the days my friend, we thought they’d never end”.

It’s a timeless song and one that seems so apt today amidst media reports today suggesting Channel 9’s 33 year hold over the broadcasting of Australian cricket is becoming increasingly tenuous in the face of a contractual dispute with Cricket Australia and a strong bid from a rival network to wrest the rights away from their spiritual home.

For those of my vintage, since our early formative years, the sights and sounds of the summer have been inexorably linked to the sights and sounds of Richie, Bill, Chappelli and the late Tony Greig, their innovations such as the Weather Wall, Stump Cam, Classic Catches, and of course Richie’s range of sartorial jackets.

To imagine a summer without them, and the new faces interwoven into the coverage, could scarcely have been contemplated just a few short months ago, but it now appears that we may soon be introduced to a whole new series of friends on the 10 Network, in addition to a greatly expanded number of matches on free to air television.

Feels strange doesn’t it ? But, it seems almost inevitable that we should prepare for the loss of our dear and faithful cricketing companion if we can believe the financial offers reported.

Presently Channel 9 pays $45m annually for the contractual rights to broadcast all international cricket in Australia, including Tests, One Day Internationals, and T20 Internationals – allowing for inflation over the 7 year period of the present contract, this amounts to $52m in today’s dollars.

Supplementing this, on a recently updated deal, Fox Sports (Australia) currently pays $12m annually for the rights to all domestic competitions in Australia which includes the Ryobi Cup, Big Bash League and Sheffield Shield final.

So, adjusted for inflation, the present value of the rights is somewhere in the region of $64m annually, which over the 5 year term sought by CA, equates to $320m.

Network 10 has emerged as the main bidder in competition to Channel 9 after it recently finalised a period of exclusive negotiation with CA. Initial media reports suggested that their bid was in the region of $70m annually and would include both international AND domestic cricket in Australia, representing a 22% improvement on the current arrangement, with additional benefit of expanding the viewing audience for the BBL and domestic cricket, consistent with one of CA’s stated corporate objectives.

However, the Australian Financial Review is now reporting that the Network 10 bid is actually a $100m annual deal with additional contra contributions of $50m. If this report can be believed it would mark an extraordinary commercial outcome for CA and the game in general, representing a near doubling of annual broadcast rights revenue.

Network 10 has the cash but few viewers, where conversely Channel 9 enjoy vastly superior ratings but a far inferior financial position. As an all-inclusive bid, Network 10’s offer is a clever move, given that the existing domestic rights holder, Fox Sports (Australia), and Channel 9 are refusing to include coverage of the Ryobi Cup and Shield final, although both have submitted bids to televise the BBL. It is also an offer that the financially beleaguered Channel 9 may struggle to match, having recently been forced to enter into a complex series of arrangements with creditors and private equity partners to secure the debt-laden network’s future, in addition to paying a significant premium to retain the rights to rugby league coverage.

Under the terms of the current contract Channel 9 has first and last rights providing that they can match the ‘comparable’ offer of any rival bidder. The definition of ‘comparable’ is being hotly disputed by both Channel 9 and CA and reports have emerged today that the matter will be decided in a court action brought by CA after talks between the parties failed to resolve the impasse.

Channel 9 will argue that their first and last rights under the existing contract pertain ONLY to international matches, and that coverage of domestic cricket is covered under separate agreements. This will have the effect of muddying the waters around exactly what Network 10 has actually bid for these matches and no doubt reduce the annual figure Channel 9 would need to pay to match it and thereby retain the rights.

In such a scenario it is unlikely that they would be able to be the highest bidder for the BBL rights and Network 10 would emerge as the likely victor given its need for ratings and CA’s strategy of gaining both an improved financial return and viewing audience for the BBL.

CA will likely argue that it is their right to countenance all encompassing bids and that Channel 9 retains a first and last rights option to such a bid. If their action is successful, it will pose a very great financial strain on the incumbent, one which their balance sheet and financial shareholders might not be willing to take on regardless of their burden of history.

Clearly there is a lot at stake over coming weeks and ultimately the outcome of the court action will play a pivotal role in the end result, but for now these are clearly troubling times for the incumbent whose hold on the rights is surely more tenuous than at any time during its history.

The nation will be watching proceedings closely but given all of this it might finally be time to sadly farewell some dear old friends.

Until next time …. that is stumps.

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