AFL Broadcasting Rights and Anti-Siphoning Laws – The ‘Other’ Competition

On 25 November 2010, the Government released a discussion paper titled ‘Sport on Television: A review of the anti-siphoning scheme in the contemporary digital environment. The report contained a review of the anti-siphoning regime pursuant to s115A Broadcasting Services Act Cth 1992.

The discussion paper was released by the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy. It took into consideration issues raised in submissions by the public, and represents the culmination of extensive liaison and consultation with major stakeholders.

As a result, the Government announced a range of reforms to the present anti-siphoning system, the purpose of which is to regulate media companies’ access to significant sporting events to preserve Australians’ right to continued access to national events of sporting and cultural significance on free-to-air television.

The Government saw fit in 1992 to grant free-to-air broadcasters preferential access to acquire broadcasting rights to sporting events to protect them from being siphoned off by pay TV. Anti-siphoning laws determine which events must be shown on free-to-air channels

An anti-siphoning list is generated under the present scheme which refers to a list of major sporting events that the Parliament of Australia has resolved must remain accessible to all Australians to view free of charge. The rationale is that if they are siphoned off to pay TV Australians will either be forced to pay to see them or forego the right altogether if they cannot afford pay TV subscriptions.

The present anti-siphoning list came into effect in 2006 and expired on 31 December 2010. The Minister for Communications has the discretion to add or remove events from the list. There were ten sports on the previous anti-siphoning list including football, cricket, tennis, motor racing and golf.

AFL, as referred to in the list, theoretically speaking, referred to each match in the AFL Premiership competition, including the Finals Series.

The anti-siphoning list has recently been revised and updated. Popular sports such as Twenty20 cricket matches have been added to the list.

Australian sporting events which are, as a matter of reality, no longer shown on free-to-air television, such as AFL and NRL games, being viewable only on pay TV, have been deleted from the list to reflect this reality.

The reforms will be implemented via amendments to the Broadcasting Services Act 1992. However changes to the listing of AFL and NRL football games will only be put into effect once regulations are made and agreed to by all stakeholders.

AFL fans have been guaranteed a free-to-air game on Friday, Saturday and Sunday. The Government stated it would ensure the biggest games were shown on Friday and Saturday nights.

However pursuant to the changes, four home-and-away games are to be removed from the anti-siphoning list, which previously mandated that they be shown on the major free-to-air networks.

The AFL is the body responsible however for determining the match fixture, which means the Government is heavily reliant upon undertakings from the AFL to ensure that only high quality calibre games are played on Friday and Saturday nights.

Under the anti-siphoning laws, events must be delisted 12 weeks before they commence to ensure pay TV providers have reasonable access to them where free-to-air broadcasters elect not to acquire the broadcast rights for any given events.

For multi-round events where it isn’t feasible for free-to-air networks to broadcast all matches within an evening there is the supplementary coverage available on pay television.

The negotiation of the broadcasting rights between the free to air networks is a controversial issue. The last AFL broadcast rights deal involved approximately $780 million dollars and the next rights which comes into affect from 2012 involve sums in the order of $1.2 billion.

The AFL are presently involved in seeking a collective agreement from one or more broadcasters, in an atmosphere where all commercial broadcasters have expressed interest in securing these lucrative rights to broadcast games from Australia’s premier sporting code.

The Nine Network is likely to form a partnership with Fox Sports whilst Seven and Ten are more likely to share the burden of the cost of broadcasting the games amongst themselves.

Some commentators are predicting that Seven and Ten will probably retain rights to the AFL, whilst channel Nine will retain rights to the NRL.

Whilst the landscape may change in the future, online broadcasting is out of reach at the moment for internet broadcasters unable to match the offers of the major commercial television broadcasters. It may take time for the roll out of the national broadband network to transform the marketplace for the consumption of football. However it is predictable that even when it does, the dominant established online players will probably be the victors in the form of an alliance between Telstra-backed Foxtel, Nine, Seven and Ten. News Limited owns 25% of Foxtel.

The Minister, when announcing the reforms to the anti-siphoning scheme stated:

Our most popular and iconic sports will remain available to all Australians and the changes will allow free-to-air channels to take advantage of digital multi-channels to show more sport and show it live.

The main changes to the scheme include the division of the list into two tiers of events, with Tier A being comprised of what are considered nationally iconic events such as the AFL and NRL grand finals premierships, the Melbourne Cup and Bathurst 1000.

Free to air broadcasters must broadcast these events live and in full, subject to limited exceptions, such as where they collide with other Tier A events, current affairs or news.

Tier B will consist of events such as regular AFL and NRL season games and non-final games of the Australian Open tennis. Free-to-air broadcasters will have the flexibility to televise these events on digital multi-channels, which will enhance their ability to deliver the events on free-to-air television and show events live.

Free-to-air broadcasters are currently precluded from broadcasting any anti-siphoning listed events on their digital multi-channels. By being able to provide the coverage live on a multi-channel basis broadcasters will be under more pressure to show Friday night matches live rather than transmit delayed broadcasts. The reforms also allow for matches to be broadcast live on the broadcasters’ main channel in opposing markets whilst still being able to broadcast simultaneously in core markets for the relevant ‘product’.

Must-offer‘ obligations have been imposed on free-to-air broadcasters requiring them to either broadcast anti-siphoning listed events they acquire rights to, or offer them to another broadcaster to prevent sporting events being unexploited. This means a free-to-air broadcaster can’t hold the rights to a national sporting event of significance and not show it at all.

The AFL have been particularly aggressive in their plans for expansion, having committed more than $200 million to expansion of clubs in hostile markets.

The AFL made a decision to make a $200 million gamble on Gold Coast and Greater Western Sydney rather than focus on getting a promising and prosperous Tasmanian team off the ground.

The AFL have adopted a more hegemonistic approach, creating new franchises from scratch in non-traditional markets.

Following the controversial broadcasting rights’ battles and competitions between various codes seems to have become a sport in and of itself, more fascinating perhaps to some than the watching the sport of footy!

There certainly seemed to be a sense in the Twittersphere and on the internet generally, that the mainstream media coverage of the Dickileaks scandal was more subdued than it may have been due to the timing of the scandal and the pressures mainstream media was under not to compromise their commercial interests.

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