How Foxtel is spending its $30 million government handout

The majority of sporting codes to benefit from the first portion of Foxtel's $30 million government handout have previously aired on the subscription broadcaster according to documents released under freedom of information laws.

The documents also show the Department of Communications and the Arts signed off on Foxtel funnelling funds towards men's rugby league games because the New South Wales Cup – which is now called the Intrust Super Premiership – was considered an "emerging" sport on the basis it is a reserve-grade competition.

It's been more than a year since it was revealed Foxtel would receive $30 million in taxpayer money over five years, with the aim of boosting women's, niche and emerging sports.

Now, it has been confirmed that 12 sporting codes benefited from the first instalment of the ad-hoc grant during the 2017-18 financial year: AFL, soccer, rugby union, rugby league, cycling, lawn bowls, surfing, Ironman, surf lifesaving, cricket, basketball and hockey. A number of sports within those codes – such as the AFL's women's league – have run on free-to-air networks with much larger audiences.

However, Foxtel used the first portion of the government's grant to run significantly more matches and TV hours than its rivals. A spokeswoman for Foxtel said the costs incurred to acquire and broadcast the women's, niche and emerging sports exceeded the $7.5 million allocation.

A spokeswoman for News Corp, the majority owner of Foxtel, said the pay-TV platform broadcast more than 4,803 hours in some way supported by the grant, which was 24 per cent more than in the “strategic roadmap”.

Without the grant, she said some of the sporting codes would have been supported “but with either no financial support, less hours or limited coverage options. Many of the sports would no longer have been broadcast”.

She said the final list of sports who benefited in 2018 was longer than that released, given deals were yet to be completed when the document was compiled, noting there were some sports on Foxtel for the first time or returning after a stint of no coverage including the FIBA Asian Cup and World Qualifiers, Women's ICC Cricket, FIH World League Finals, gymnastics (including world championships, Apparatus World Cup, World Artistic and Rhythmic Gymnastics and Australian Championships) and Super W.

A source close to Fox Sports (which merged with Foxtel in April) at the time the grant was issued said conversations leading up to the government handout revolved around a new suite of rules that shifted the dynamics of sport on commercial TV, including a gambling advertisement ban during live sporting events before 8.30pm.

Concerns the new restrictions would reduce advertising revenue, along with deals with smaller sporting codes, saw commercial networks rally for a licence fee cut to offset any loss of advertising. The government provided this fee cut to the free-to-air networks and gave Fox Sports a grant, with the understanding it would help bolster the coverage of women's and niche sports.

But eyebrows were raised when the ABC revealed a government papertrail on how Foxtel was chosen didn't exist. Labor's communications spokeswoman Michelle Rowland has argued this showed the funding agreement was part of a "backroom deal".

Labor's Michelle Rowland has criticised the government handout. Credit: Sasha Woolley

Foxtel is yet to receive a second allocation of funding (around $7 million), but it is understood the government is due to sign-off on next year's programming schedule in a few weeks.

Communications minister Mitch Fifield has consistently defended his department's decision to award Foxtel $30 million. He previously told Senate estimates Foxtel was the appropriate choice because it already broadcasts the majority of women's sport shown on Australian TV.

"The Government's reforms have meant Foxtel now carries more coverage of women's, niche and high-participation sports with fewer gambling ads," a spokesman for the minister said. "Greater television coverage of these sports is terrific news for fans and participants."