Harold Mitchell vs SBS: the lobbying war heats up

James McGrath
By James McGrath | 21 May 2015
Harold Mitchell. (Photo: Julian Kingma)

Both FreeTV and SBS have stepped up their lobbying efforts of cross-bench senators in wake of revelations that Labor would not support a key advertising bill, meaning it will need the support of independent senators to make it through the senate.

Earlier this month Labor formally pulled its support for a key piece of legislation which would allow SBS to deliver 10 minutes of advertising per hour in prime time instead of its current allowed limit of five minutes.

SBS would be able to increase its advertising time in prime time by reducing the amount of advertising in other hours in any given day.

The legislation was proposed by the coalition government as a partial offset to Government cuts to SBS' budget, allowing SBS to create advertising support around 'tentpole' programming such as Eurovision, the Tour de France, and Mardis Gras.

While it was thought that Labor would never be in favour of the legislation anyhow, lobbying efforts from FreeTV and SBS have intensified in recent times with several crossbenchers telling AdNews that they had recently received representatives from SBS and industry heavyweight Harold Mitchell.

“They've definitely stepped it up in recent times,” one source told AdNews. “I mean, they were talking to us before because it was never likely that Labor would support the bill but now that's been formalised … it's ramped up.”

Mitchell, FreeTV chairman, told AdNews that the legislation was “a matter of fairness”.

“It's simply a matter of fairness, the Government already subsidises SBS to a massive extent so for it to give SBS money from FreeTV as well is just wrong,” Mitchell said.

“FreeTV vehemently opposes the proposed legislation and has been making that point to the Government, Labor, the Greens and the cross benches.”

It is believed that the coalition has also been canvassing support for the bill, but has found the crossbenchers hard to read on the issue.

Both sides of the debate have put forward varying estimates on how much revenue the bill would raise for SBS, potentially taking advertising revenue away from the three main commercial FTA channels.

FreeTV Australia has leant on research commissioned from MediaCom, saying that the legislative change could raise the multicultural broadcaster $148 million over four years.

MediaCom CEO Mark Pejic previously told Adnews the analysis included a stepped approach, where 35% of the extra inventory was filled in the first year, 50% in the second year, 75% in the third year, and 100% in years four and five.

However, SBS says the figure would be more in the order of $28.5 million over the four years.

Media buyers have previously expressed wariness on buying up the extra inventory, saying the value of buying SBS is that it is seen as a premium audience which may not abide by extra advertising.

Should the legislation not pass though, it is thought SBS would find itself between a rock and a hard place with the Government's cuts taking place from the next financial year, without any offset from an increased advertising allowance.

As things stand, it is believed the cross bench remains divided on whether or not they would support the bill, with AdNews learning that two senators are in favour of the legislation, at least one is against the legislation and at least two are undecided.

There are currently eight members of the cross-bench which both FreeTV and SBS are competing for.

One of those in favour is Senator Bob Day of South Australia.

A representative from Day's office told AdNews that Day was in favour of the legislation, as it would “further expose public broadcasters to the winds of commercial reality”.

“To that end, he is inclined to support the advertising changes as they are supported by SBS management itself and will have minimal impact upon existing commercial networks,” the representative said.

The potential move has been blasted by current commercial operators such as Channels Seven, Nine, and Ten, who say it would essentially add another competitor to the space at a time when their advertising revenue is under threat.

Network Ten came out swinging against the legislation, accusing the Government of “clearly creating a fourth free-to-air network by stealth.”

“All media companies, including Ten Network, have made painful and difficult cuts over a number of years in response to major structural change and a soft advertising market,” Ten CEO Hamish McLennan said in a statement.

“But this government is clearly unwilling to tackle the difficult decisions when it comes to the ABC and SBS, instead making commercial businesses and their shareholders foot the bill for the public broadcasters’ ongoing inefficiencies.”

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus