Seven Network plays $25m card in TV rights spat with Cricket Australia
Cricket took delivery of a legal threat from its free-to-air broadcaster, the latest move in an ugly battle that could end in court.
Cricket’s faltering relationship with its free-to-air broadcaster will be tested to the fullest in the next two weeks, as a bitter legal stoush that could result in the Seven Network ditching its cricket rights comes to a head.
Seven will refuse to pay a $25m rights instalment due next Tuesday and Cricket Australia has until the following week to show the network why it shouldn’t seek to terminate its portion of the richest broadcast deal in Australian cricket history, as the already ugly spat between the two parties worsened on Friday.
Seven fired off its latest — and most threatening — legal salvo to Cricket Australia in a dramatic escalation of a strategy that could result in the network, struggling under the weight of hundreds of millions of dollars of debt and a sliding share price, walking away from the summer’s biggest sport.
Cricket Australia received a letter from Seven on Friday morning notifying the sport’s administrators of a breach of contract. The letter outlined a series of reasons Seven believes cricket has not delivered its side of the contract, including scheduling changes and the quality and timing of matches Seven was to broadcast in the summer.
Seven and its rights partner Fox Sports are both upset with Cricket Australia for refusing to consider a discount or “rebate” on the remainder of their $1.18bn rights deal that runs through to 2024. Both networks have negotiated revamped deals with the AFL, NRL, rugby union and soccer since the COVID-19 pandemic struck in March.
Cricket Australia has maintained that it will deliver a full summer of its sport and that it was confident the cricket on offer would attract strong TV ratings.
The Big Bash League is a particular sticking point for Seven, with Seven West Media chief executive James Warburton ramping up the pressure on Cricket Australia last month by saying cricket fans were being “ripped off” by a BBL that has decreased in player quality, television ratings and crowds for three successive years.
There has even been a suggestion in recent weeks from Seven to Cricket Australia not to hold the BBL this season given the difficulties in attracting players from overseas because of travel restrictions and the prospect of small crowds.
Seven’s letter includes a demand for an independent expert to assess the current value of the cricket rights — the network is paying $75m annually in cash and about $7m in contra in three instalments — and if the parties cannot reconcile then the need for a mediation and arbitration process.
While the letter stopped short of threatening an immediate termination of the deal, it is the beginning of a legal process that could see Seven terminate its contract.
It also leaves open the chance of cricket not having a free-to-air partner this summer, though rivals Nine and Ten are understood to be interested if the price falls. Fox Sports could also gain more exclusive rights.
For Seven to follow through on its termination threat would likely mean court action.
Seven has given Cricket Australia until September 23 to reply to Friday’s letter. Seven has engaged leading QC Neil Young, while Cricket Australia has law firm K & L Gates working on its side.
“We believe we have a very good case (that Cricket Australia) has breached on a range of things,” one source familiar with Seven’s motives said on Friday.
Seven and Cricket Australia were remaining tight-lipped publicly, though a CA spokesman f said: “Cricket Australia remains in ongoing discussions with the Seven Network about delivering a compelling summer of cricket. CA is committed to fulfilling its contractual obligations to all its partners this season.”
A cricket source also added that Warburton and interim CA CEO Nick Hockley’s meeting last week ended with an agreement for their disagreements over the rights not to be played out publicly.
But revelations of the latest legal missive will strain the relationship between cricket and its free-to-air partner, which is only entering the third season of a six-year contract struck in 2018 when both parties were under different management.
Seven is particularly miffed that it faces the prospect of launching the BBL in early December without having telecast a Test match beforehand to open its summer cricket schedule. It believes it may be financially better off with no cricket.
December’s BBL will potentially compete with Australia A matches against India, further weakening the Big Bash player pool. Seven also believes the BBL will take a further hit in January when Australia plays one-day internationals against New Zealand.
Cricket officials meanwhile believe Seven is posturing and trying to drive the price of the rights down given its financial struggles. Seven has already written down about 50 per cent of the rights’ value on its balance sheet and tried to sell them to Ten.
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