Cricket Australia’s two options in Channel 7 war

Cricket Australia is facing some massive decisions with the broadcast rights inferno as it manages two partners with very different objectives.

Cricket Australia has reached a fork in the road in how to put out their broadcasting bushfire.

The Seven Network’s bold move to apply for an independent arbitrator to recast the value of the COVID-hit summer will force Cricket Australia to make a call next week on whether they will agree to the process or consider their own options at the Supreme Court. But it’s only the tip of the iceberg.

Seven’s ultimate objective remains to try and blow up the entirety of their $450 million TV rights deal and get out of cricket, or at the very least, the Big Bash.

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CA is aware of the threat and has some big decisions looming to protect their product and bottom line and not allow a huge summer against India to be undermined by the escalating war with their free-to-air partner.

Their preference remains to sort things out. But the relationship has become so toxic that sources indicate Cricket Australia heavies are now starting to think that being terminated by Seven, or choosing to terminate the network themselves might not be the worst outcome, even if it does mean accepting a cut-price deal with the Nine or Ten networks.

At five minutes to midnight, it’s unlikely anything as drastic or legally complicated as the rights changing hands with four years to run can happen before this summer, but the risk of the damaging and unsettling conflict continuing to play out in the background is only growing.

CA is confident force majeure covers them for this summer, and Seven is yet to raise an argument that makes them nervous.

Seven counter with a belief that India has dictated the forming of this summer’s schedule as much as COVID-19 and maintain they could still challenge quality clauses in their six-year contract which haven’t been met.

CA could seek an injunction to stop the tribunal giving a value assessment on this summer’s rights or even sue Seven for breach of contract, but going to court could trigger an ugly sequence of events, because Seven have their own claims of contract breaches and are clearly spoiling for a fight.

The positive is CA and their chief broadcast partner Fox Sports – who pay $130m a year – are aligned and are close to a new deal. But even that silver lining isn’t without its complications.

CA wants to resolve things with Fox Sports sooner rather than later, but the scale of the drama with Seven is not helping, because there’s a feeling they may need some more certainty on that front first.

There are ways around that speed hump, and clauses could be agreed to between Fox and CA that could always be renegotiated again should different outcomes occur with Seven.

One theory is that CA could help their overall position by making a priority of resolving things with Fox, because it would prove that cricket bosses are capable of doing a deal, and paint a picture of Seven as the unreasonable ones, not them.

The other avenue is to try to put Seven back in their box first.

Fox understands CA’s conundrum, but doesn’t want to be penalised as a result of Seven being the trickier customer.

That said, it may now work in Fox’s favour to kick back and see what kind of discount an independent expert decides is appropriate for Seven first.