Cricket Australia is preparing for its most decisive week in years as it scrambles to get bidders to the table for the next six-year television rights package.
In what has been a torrid few weeks for the game’s governing body following the ball-tampering incident in Cape Town – the trigger for an independent review – executives at CA are desperately seeking to heighten the level of interest for Test, ODI, T20I and Big Bash League rights they initially felt could acquire $1bn. TV rights account for the vast majority of the game’s finances (up to 80%) and the chief executive, James Sutherland, and his team have anticipated a sizeable increase on the previous $590m five-year deal. But doubts remain.
Tensions have run high during negotiations, with CA at one stage outright rejecting a joint Channel Nine and Ten bid without consultation. It was deemed too low. A leaked email then showed the Cricket Australia chairman, David Peever, criticising Ten’s negotiating tactics as “appalling” and labelling the network “bottom feeders in this market”. The Nine/Ten consortium is now reported to have tabled a new $900m offer over six years, although negotiations for this are yet to begin. Fox Sports – considered a key player in proceedings with the capacity to bid big – withdrew their bid on Friday amid frustration at the way negotiations were playing out. They are, however, expected to re-enter talks.
Nine stunned the industry when it announced it had broken Seven’s 40-year hold on Australian Open tennis rights by agreeing to pay $60m a year for the summer of tennis from 2020 to 2024. This blindsided many, especially CA, and was a shrewd move by Tennis Australia. Nine’s move meant they exhausted a significant portion of their rights budget on tennis and effectively signalled an intention to bid only for Test cricket – the one form of the game that won’t clash with the Australian Open. It also exposed a potential tactical blunder by CA; by delaying the formal tender process until March this year, it gave another sporting body the opportunity to work behind the scenes to land a new deal. Eager for summer sporting content, Seven are expected to now play a big role in upcoming cricket negotiations this week.
A key reason bids have stagnated is due to a lack of competitive tension. Naturally important to any bidding process, CA were expecting a three-way bidding war to erupt between a cashed-up Channel 10 under new owners CBS, an ambitious Fox Sports under new leadership desperate to acquire exclusive summer content to reel in potential subscribers, and the incumbents at Nine – broadcasters synonymous with Australia cricket. Instead, they have got a tension-filled, protracted process interrupted by the controversy in South Africa. During the fallout of the ball-tampering scandal, talk shifted to the potential negative impact it has played on bids. It is, however, unlikely to seriously dent any offer. Bids lodged on the initial 19 March deadline – five days before the incident – were already short of what CA wanted, indicating the gap between what networks are willing to pay versus what Sutherland and co wants existed already.
CA’s initial tender document revealed it is attempting to sell rights as individual packages (a Test match package or an ODI package, for example). The Big Bash League (both men’s and women’s) is one package all parties expect to skyrocket. Ten’s recently expired deal (2014-18) was signed for an industry steal of $20m per year, a figure that could triple. A conundrum looms, however, should Fox Sports bid aggressively for these rights. CA has said it wants the popular, child-friendly T20 competition to remain in front of a pay wall to maximise its exposure. But if free-to-air bids fail to garner the level of interest CA envisage, it is possible that it would be forced to accept a sizeable pay-TV offer to prop up the value of the overall deal. The Big Bash, unlike all international cricket (men’s and women’s) shown in Australia, is not bound by anti-siphoning laws that insist it must be shown on free-to-air television (these laws are not enacted if a free-to-air provider fails to bid).
There is no deadline for when the rights deal must be signed but it is understood CA is keen to finalise proceedings in the coming fortnight, with key talks set for this week. The results could be career-defining for Sutherland. After granting the players’ union a hefty pay rise through gritted teeth during last year’s ugly pay dispute, it is now his job to ensure the deal with the networks is a success. Due to CA’s heavy reliance on TV money, failure to do so could damage investment in the game all the way down to the grassroots.
A poor result at the negotiating table in the coming weeks would dwarf any reputational damage CA has endured in the fallout from the ball-tampering saga, and would be another disaster they can ill-afford.
