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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 particularly apt today amidst media reports suggesting Channel Nine’s 33 year hold over the broadcasting of cricket in Australia is becoming increasingly tenuous.
This is reportedly due to a contractual dispute with Cricket Australia, and a strong bid from a rival network to wrestle 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. Of course their innovations such as the Weather Wall, Stump Cam, Classic Catches, and of course Richie’s range of sartorial jackets come along with that.
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 gang of friends on the Ten 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 companions if we are to believe the financial offers that have been reported.
Presently Channel Nine pays $45 million 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 seven year period of the present contract, this amounts to $52 million in today’s dollars.
Supplementing this, on a recently updated deal, Fox Sports currently pays $12 million 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 $57 million annually, which over the five year term sought by CA equates to $285 million.
Network Ten has emerged as the main bidder in competition with Channel Nine after it recently finalised a period of exclusive negotiation with Cricket Australia.
Initial media reports suggested that their bid was in the region of $70 million annually, and would include both international and domestic cricket in Australia.
This represents a 22% improvement on the current arrangement, with the additional benefit of expanding the viewing audience for the BBL and domestic cricket, consistent with one of Cricket Australia’s stated corporate objectives.
However, the Australian Financial Review is now reporting that the Network Ten bid is actually a $100 million annual deal with additional contra contributions of $50 million.
If this report can be believed it would mark an extraordinary commercial outcome for Cricket Australia and the game in general, representing a near doubling of annual broadcast rights revenue.
Network Ten has the cash but few viewers, where conversely Channel Nine enjoy vastly superior ratings but a far inferior financial position.
As an all-inclusive bid, Network Ten’s offer is a clever move, given that the existing domestic rights holder, Fox Sports, and Channel Nine 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 Nine 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, Nine are also paying a significant premium for the rights to the rugby league coverage.
Under the terms of the current contract, Channel Nine has first and last rights to negotiation, providing they can match the ‘comparable’ offer of any rival bidder.
The definition of ‘comparable’ is being hotly disputed by both Channel Nine and Cricket Australia. Reports have emerged today that the matter will be decided in a court action brought by Cricket Australia after talks between the parties failed to resolve the impasse.
Channel Nine 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 Ten has actually bid for these matches, and will no doubt reduce the annual figure Channel Nine 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 Ten would emerge as the likely victor given its need for ratings and Cricket Australia’s strategy of gaining both an improved financial return and viewing audience for the BBL.
Cricket Australia will likely argue that it is their right to countenance all encompassing bids, and that Channel Nine 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 the burden of history.
Clearly there is a lot at stake over the 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.
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