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Cricket Australia board director’s ties to News Corp raise eyebrows

By Zoe Samios and Daniel Brettig

Former Foxtel boss Richard Freudenstein has not been asked to recuse himself from his leading role in Cricket Australia broadcast rights talks despite still being a paid director of a News Corp company.

Freudenstein, paid almost a quarter of a million dollars each year by a News Corp-controlled real-estate listings portal REA Group, is also a board director at Cricket Australia (CA), and has been picked by outgoing CA chairman Lachlan Henderson to help with talks with media companies about a new broadcast rights deal. The talks are expected to continue despite a request for final offers last week.

However, Freudenstein’s ties to News Corp through his directorship at REA have raised questions among senior media executives about whether his involvement could be a conflict of interest.

It is unlikely a new cricket broadcast deal will be done before Christmas.

It is unlikely a new cricket broadcast deal will be done before Christmas.Credit: AP

Freudenstein, who was briefly interim chairman of CA, is an experienced media executive who worked on key broadcast deals in his time leading Foxtel between 2011 and 2016. He also sat on the board of Channel 10 and was the chief operating officer of British Sky Broadcasting, making him a strong candidate to advise on broadcast rights.

But the executive was also re-elected as a non-executive board director to REA Group, in November. REA Group’s annual general report showed Freudenstein made $242,000 in the last financial year, and $221,000 the year before. Since re-election, Freudenstein and Foxtel boss Patrick Delany have attended multiple events together including Lachlan Murdoch’s annual Christmas party.

The possibility of having to recuse himself from talks involving News Corp-related companies was discussed at the time of the nominations process by which Freudenstein joined the board in 2019.

But sources close to CA said Freudenstein was not asked and is not required to recuse himself from the talks, despite his ties to News Corp. It is unclear if he chose to do so voluntarily. CA declined to comment. Freudenstein was approached for comment.

Broadcasters including Paramount (the owner of Network 10), Foxtel and Seven West Media were waiting over the weekend to hear from senior executives at CA, which has asked them to submit their best and final offers late last week.

Richard Freudenstein arrives at Lachlan and Sarah Murdoch’s Christmas party earlier this month.

Richard Freudenstein arrives at Lachlan and Sarah Murdoch’s Christmas party earlier this month.Credit: Louie Douvis

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Foxtel and Seven have offered less money than Network 10’s owner Paramount, but has imposed pressure on the sports body by suggesting its rival is too troubled a network to offer audience value for the deal.

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Media sources, who spoke on the condition of anonymity because talks are commercial in confidence, said they are unsure whether a deal will now be struck before Christmas given CA and the prospective broadcasters are not in agreement on a range of key sticking points.

Paramount and Network 10 remain in the box seat to win CA’s media rights auction, as Seven and Foxtel have so far been unable to match its $1.5 billion offer for rights to Test matches, one-day internationals, T20s, the Big Bash League and the Women’s Big Bash League. But with most media executives taking holidays at the end of the year, it is unlikely a deal will be done before Christmas.

CA chief executive Nick Hockley said on SEN on Sunday he couldn’t comment on discussions, but said the talks were “active”. “There’s strong interest and that’s reflective of the passion for the game around the country,” he said. “We are working through it thoroughly and to make sure we get the best result...there’s no specified timeline.”

For Paramount, one of the key concerns is the additional production expense, which is about $40 million per year in addition to the broadcast agreement. Media sources said Paramount and CA are still debating which matches go behind a paywall or on free-to-air television network Channel 10.

For Seven, the sticking points are securing digital rights for its free streaming service 7Plus, and bringing ODIs in front of the paywall (they currently sit on Foxtel and streaming service Kayo Sports). Seven, who is suing CA for allegedly breaching its contract by reducing the quality and standards of the BBL, is also requesting the competition to be shortened and amended.

Hockley said the competition had already improved significantly this year.

This masthead revealed last week that pay TV giant Foxtel has privately agreed to let Seven stream key cricket matches on its online platform 7Plus if it means securing the rights for another term. The Daily Telegraph revealed on Friday that Seven had promised to drop court action if it wins the TV rights.

However, Foxtel is not willing to give up the exclusive rights to ODIs, which it secured under the previous agreement with CA. Even if Seven and Foxtel find common ground, their combined offer will not be an increase on the existing deal, which is worth about $197 million per year. Seven and Foxtel are not willing to pay more money, but believe they can offer greater promotional muscle than Paramount.

Outgoing CA chair Henderson has said publicly he believes cricket is undervalued in the broadcast market, but a range of factors is limiting the money on offer. All networks believe CA has overvalued how much its rights are worth, given it is struggling to attract large audiences to the BBL and the poor ratings of Test matches between Australia and the West Indies (who are returning for summer next year).

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Original URL: https://www.smh.com.au/link/follow-20170101-p5c78f