Seven and Fox Sports enter cricket fray

Cricket Australia is edging closer to striking a new broadcast rights deal, as Seven and Fox Sports play ball.

Tim Paine of Australia during day 3 of the 4th Test match between South Africa and Australia. Picture: Getty

Cricket Australia is edging closer to striking a new broadcast rights deal despite the ball-tampering scandal, as Seven Network and pay-TV broadcaster Fox Sports actively negotiate with the ­organisation.

A Cricket Australia deal could be announced as soon as this week, sources said, as officials move fast to reach an agreement on a contract after its long-term partner, the Nine Network, lined up with Tennis Australia as part of a $300 million, five-year commitment. A spokesman for Cricket Australia told The Australian last night: “We are in discussion with all interested parties, and that is confidential. We have full confidence in our product.”

Nine, which pays $500m for the international rights under the existing deal, has not held any recent talks with Cricket Australia after officials rejected a joint bid from Nine and the CBS-backed Network Ten.

A spokeswoman for Nine said the broadcaster was keen to retain international rights, but not at any price, a position consistently held by the media company in comments by chief executive Hugh Marks since last year.

“We’re open to talking to Cricket Australia but we’re waiting for them to come back to us,” a spokeswoman for Nine said last night. “They said our bid was non-compliant. We’ve had no recent talks but we’re open to further discussions.”

A spokesman for Ten, which currently holds the much-coveted Big Bash League rights, confirmed last night that the network was in discussions with Cricket Australia outside of the consortium it formed with Nine. “We are in ongoing and constructive talks with Cricket Australia,” a spokesman for Ten said.

Seven and Foxtel declined to comment.

TV sports rights: Show them the money

It is 40 years since Kerry Packer took cricket and dragged it kicking and screaming into a new golden era at the helm of Nine. But while it would appear to be unthinkable to imagine Nine without cricket rights, the network’s executives continue to insist it is working on a “plan B” under which it would walk away from the sport should the price of the rights rise too sharply.

If Nine loses its cricket rights, the broadcaster faces this coming Australian summer without any major sport and a scheduling headache. A decision to award all elite-level tennis to Nine, including the rights to screen the Australian Open, begins in 2020. The sport has one more year on Seven.

Cricket Australia, meanwhile, is under pressure to complete its rights process ahead of the start of the next cricket season in October. Sources said it was targeting $200m a year or $1 billion over a five-year contract. Cricket Australia receives $600m from its five-year deal between 2014 and 2018.

Initial bids, however, have fallen well short of the target Cricket Australia expected to get — even before the ball-tampering crisis, sources said.

Google’s YouTube and Facebook failed to lodge aggressive bids partly because of a looming inquiry into their business practices by the competition regulator.

Adding to an increasingly complicated picture for Cricket Australia is the continuing fallout from the cheating scandal in South Africa. As former captain Steve Smith, former vice-captain David Warner and former opener Cameron Bancroft were handed lengthy bans, investment group Magellan quit its three-year naming-rights sponsorship, believed to be worth $24m. Sponsors including the Commonwealth Bank and Weet-Bix have also dumped players.

Cricket Australia also faces the prospect of networks switching their attention to the English Premier League’s media rights. Telco Optus’s $187m, three-year deal is on the table.

Bids for the EPL are due by April 12.

Tennis Australia’s new deal with Nine blindsided the industry last week. Worth $60m a year, the contract represents a significant increase on the body’s most recent rights deal with Seven.

Currently Seven pays Tennis Australia $200m for free-to-air, pay-TV and digital rights as part of a five-year deal. The Australian understands that Seven offered about $38m a year or $190m for a new tennis deal over five seasons, significantly below the price Nine agreed to pay.

Seven’s chief revenue officer Kurt Burnette declined to comment on the money offered, but in the first public comments from an executive at the network on the tennis deal, he said the 50 per cent increase in the price of the rights was unsustainable.

Mr Burnette said Nine would almost certainly make a loss, and that Seven would have been forced to double advertising rates if it had matched Nine.

“We’ve always been clear about one of two things going forward,” he said. “One is that it has to make financial sense for shareholder returns and secondly we won’t compromise our advertisers. If we were to pay anywhere near what was put on the table we would have had to double the price of our advertising rates and reduce the amount of integration.

“There were some restrictions placed on us in those discussions that were just unacceptable. It compromised what we would have been able to offer our advertising partners.”

Nine’s spokeswoman said the network would look to sub-­licence some of the tennis rights to defray the costs.