Foxtel, Seven bosses explain why $1.2bn cricket rights represent 'good value'

Arvind Hickman
By Arvind Hickman | 13 April 2018
Foxtel CEO Patrick Delany fronts the media. Inset, Seven boss Tim Worner.

The new cricket media rights holders have lauded the $1.2 billion, six-year deal with Cricket Australia as important strategic investments that will help respectively drive TV ratings, subscriptions and more hours of coverage of the sport than ever before.

Details of the deal were revealed at a press conference held by Cricket Australia CEO James Sutherland, Seven West Media CEO Tim Worner and Foxtel CEO Patrick Delany (see at a glance below).

Worner is bullish Seven can make money from cricket media rights despite rival Nine making a substantial loss on The Ashes, and has labelled its $450 million portion of the deal as better value than it previously had with tennis.

“Financially this is a much better deal for Seven West Media than what we had with tennis,” he said. “You need to look at the number of hours we are getting under this deal and also the fact that so many of hours are day time hours but you get to charge a prime time rates for them.”

When asked how Seven would make money on cricket when Nine - which paid marginally more at $80 million per annum for domestic international matches - made a loss from the recent Ashes series and has consistently made losses for several summers before.

“We are not necessarily paying more [than Nine] and, per hour, I would say that we are paying less,” Worner said.

“Our businesses plan for this deal, we took into account what Nine has been riding on cricket and what Ten has been riding on cricket. Our business plans has used revenue projections that are below those numbers. We're going to back ourselves to beat them – that's how we're going to make money."

Cricket rights deal at a glance

  • A six year, $1.2 billion deal for Seven and Fox Sports to broadcast domestic cricket 
  • Seven is paying $450 million ($75m per annum) for tests, 43 Big Bash League matches and women's internationals and BBL. Nine paid $80m for tests, ODIs and T20s)
  • Foxtel is paying $750 million ($125 million) to simulcast tests, exclusively broadcast ODIs and T20s, simulcast 43 BBL and exclusively show 16 BBL games, simulcast all women's cricket. Foxtel will also get Sheffield Shield and JLT One Day cup
  • Foxtel secured exclusive digital rights, which means it can stream matches

Ashes AdelaideThe new cricket rights deal covers one home Ashes series.

A new 'home of cricket'

Foxtel CEO Patrick Delany said its $750 million portion would allow the pay TV operator to become the new' home of cricket' and it will be launching a 24/7 Fox Cricket channel that will broadcast “every ball over every over played all summer” as well as additional content around the sport.

“Fox will be the only place you can see every ball of every over played all summer. We will have a dedicated 24 hour a day channel Fox Cricket and we have credentials with what we do with these things through Fox Footy and Fox League,” he said.

“In this deal we have digital rights exclusively. This is very important for Foxtel. Foxtel is a streaming company – the IQ streams and we're putting things on demand and being able to bring the world's best content to one place is certainly part of our vision for Foxtel and this cricket deal is one of many initiatives we will have going forward.”

The digital rights are an important part of the value Foxtel hopes to derive from broadcasting cricket in the summer.

Last year the pay TV company launched Foxtel Now, an SVOD with a lower price entry point than the satellite service that it hopes will grow Foxtel's subscriber base beyond its current 30% level.

To do this Foxtel needs exclusive content and a full summer schedule of cricket fills a live sport scheduling gap it had between October and March that it hopes will keep current subscribers glued to the service all year round and attract new fans.

bbl-strikers-vs-hurricanes.jpgSeven and Fox Sports will simulcast 43 BBL games while Fox Sports will air 16 exclusive BBL games.

Anti-siphoning rules

Seven has decided not to acquire the rights to men's ODIs and international T20 matches, which means that for the first time ever, Australian fans will not have free access to games on TV.

On the surface such a move would appear to be in breach of Australia's anti-siphoning rules that ring-fence certain sports events to FTA television.

Sutherland said anti-siphoning concerns were raised and worked through with the government during the negotiation process to ensure that regulatory requirements were being met.

“The minister is aware of that,” he said. “It's our obligation to work through within the regulatory requirements. What we have been all about though this process is arriving at a landing sport that allows more cricket to be broadcast, more accessible and on FTA cricket there will be more cricket than ever before.”

Worner responded by pointing out that Seven “is a massive fan of the anti-siphoning laws” and it was only because of the protection they provided that Seven had been able to compete for cricket media rights in the first place.

“This is no different to AFL (where Foxtel broadcasts several games exclusively) and I would ask you to consider what would have happened with this deal if there was no anti-siphoning list,” he said.

When pressed further on the legalities of it, Worner added: “It's an arrangement that has been reached and not dissimilar to other events that are on the list. We are very big supporters of the anti-siphoning list for very good reasons.”

Women's cricketSeven and Fox Sports will show every women's international and WBBL game. 

A 'foundation' for Seven

Worner described the deal as “the foundation” of Seven's strategy and said it would guarantee summer audiences for the next five years.

“It's about certainty and the foundation of the transformation that;s going on at Seven. It gives us over 400 hours of premiums sport,” he said.

“If you think about that and something like the Australian Open, which has significantly less hours, say 14 nights. We're getting about 70 days/nights for what we've paid.

“We think it's a great deal for us and we look forward to working with Fox Sports... and producing this game together. We think we are going to work even more closely on this sport to effect cost reductions for both of us and that is going to be important for the future of our company.”

Keeping a tight control on cost will be critical for Seven to make the rights viable at a time when the network is laden with debt.

There are also questions about the impact simulcasting with Fox Sports could have on its audience figures.

While Seven reaches more households than Ten and would naturally expect to attract higher ratings for the BBL games, some of this (up to a 30%) could choose to watch games on Fox Cricket.

England Jason Roy Nine cricket ODI 2018Fans will no longer get to watch men's ODIs and T20 internationals on FTA TV. Fox Sports covers every game.

What it means for fans

For cricket fans the rights deal ultimately means there is less men's cricket on FTA TV, including the ODIs and T20s as well as 16 BBL games.

However, there is much more women's cricket than ever before, which will receive extensive coverage across both FTA and pay TV.

This will surely help Cricket Australia grow the sport to women and it will be banking on having enough premium men's games on FTA TV to keep fans of the men's game happy.

Fox Sports can add another code onto its already impressive library of Australian sport, while Seven has an important summer sport to promote its programming schedule and will hope that it's simulcast and production sharing arrangement with the Pay TV operator is a win for both parties.

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