The release of Cricket Australia’s new TV deal has left those at Channel Ten both angry and bemused at the way the process unfolded.
Initially, Channel Ten had partnered with Channel Nine as a way to try and build on the enormous success they had made of the Big Bash. The vision of their Head of Sport, David Barham, had seen the Big Bash grow from a hit and giggle sideshow into arguably the best produced T20 domestic tournament in the world.
A three-man commentary panel, new faces including female talent and prime time free-to-air all combined to make Ten’s initial investment look like a bargain. Not only that, Barham and the team showed Australia what cricket coverage could become, making Channel Nine’s coverage look like a dinosaur in the process.
It’s exactly what Ten had done with AFL in previous years. And just like the AFL scenario, once Ten had set the bar, the sporting body took away their ticket to play and let others copy the modis operandi in return for more cash.
The initial combined Nine and Ten offer of $900m to keep everything on free-to-air was rejected by Cricket Australia on two levels.
Firstly, adviser to Cricket Australia Credit Suisse had convinced the board that the rights were worth $1 billion over 6 years.
Secondly, and more importantly, Cricket Australia wanted to boot Channel Nine.
Sources close to the deal explain that this only became apparent to Ten executives involved in the bid when Ben Amarfio, Cricket Australia’s Executive GM – Broadcasting, Digital Media and Commercial, told them directly during the negotiation. It shocked the Ten party both in regards to the content of the message being delivered, but also that Amarfio would even say such a thing so openly about their partner of 40 years.
However, Cricket Australia Chairman David Peever would later refer to Ten, now owned by Amercian media behemoth CBS, as a “bottom feeder”, highlighting their apparent contempt to fair process and probity.
Furthermore, sources also confirm that Amarfio would go on to tell the Ten team that he wanted them, but Nine had to go. Ten then requested Amarfio to inform Nine of this fact, which he declined to do. So to split the relationship up, Cricket Australia chose to make their consortium bid “non-compliant”.
Subsequent to this, Ten flew Peever and CEO James Sutherland to the CBS head office in New York. CBS had bought Ten in August 2017, pulling them out of administration and bringing with them a massive chequebook.
Those close suggest that it was a no holds barred presentation from Ten, highlighting the next level of vision and change that they planned to bring to the user experience. This in turn would help grow the game. Most importantly, was the way in which James Sutherland opened the meeting.
“We want cricket to be the game of Australia” he said. A vision that Ten was strongly aligned with.
A key element to this would be keeping cricket on free-to-air given the lessons learned by the ECB’s move to push it behind the paywall in 2005. That move did enough damage to cricket’s growth and popularity in the UK that the ECB are still struggling with how to rejuvenate the sport.
Channel Ten continued to court Cricket Australia and offered up a solo bid of $960m to take absolutely everything and have it all free-to-air.
Women’s Big Bash.
The Shield Final.
Even the AB Medal, which for some reason, Cricket Australia see as vital to the sport’s coverage despite its lack of popularity with the average punter.
This bid was rejected, despite it being just $40m short of Cricket Australia’s widely known $1 billion target.
However, the Ten bid team suspected something else was at play.
Not many in the process from any of the networks trusted Amarfio through saga, with one close to the action describing him to me as “slippery”.
In fact, Ten held a view that Amarfio had already pledged to Foxtel that they would be part of any deal, and that they should simply bide their time. Some contended that reports that they had pulled out of the race were done simply to put more pressure on the free-to-air networks to bring more value to the table.
In Cricket Australia’s eyes, value simply meant more dollars. It had little correlation to the quality of product or additional free-to-air exposure. Crucial factors that would help in obtaining Sutherland’s vision on making cricket the game of Australia.
Finally, Cricket Australia informed Ten that Foxtel would be given rights to all cricket content and that the opportunity now on the table was to simulcast some matches on free-to-air. Primarily, Ten could broadcast Test matches and a similar amount of Big Bash games as per their current arrangement.
Ten’s revised bid of $70m for this scope was rejected.
Crucially, they then responded with a bid of $80m.
This updated offer was presented by Ten in a meeting with Sutherland and Amarfio. The Cricket Australia officials excused themselves from the room for five minutes, re-entered, and expressed that a deal had been done. Ten would be the free-to-air partner at $80m and Amarfio offered to draft up a Letter of Intent documenting this outcome.
When questioned, Amarfio also made it clear that he would not be shopping Ten’s offer around. Therefore, as far as Ten was concerned, the deal was done.
Less than an hour after leaving that meeting, James Sutherland sent a text message to the head negotiator from CBS, informing him that he had 50 minutes to send through an unconditional best and final offer.
Cricket Australia had reneged on the handshake and were looking for more money.
This text came around 7:30pm AEST, or about 5.30am in New York, when senior decision makers at CBS in the USA were asleep.
It was a stitch up and a betrayal of trust.
Despite clambering for a two hour reprive, Ten decided not to counter.
CBS had had enough.
The culture and negotiation style of Amarfio and Sutherland was not aligned with the values of CBS and Ten. Cricket Australia were left with Seven as their only player.
The deal was now done, but not with Ten.
Channel Seven filled the gap. They did it at only $75m per year.
$5 million less than the Channel Ten offer.
Cricket Australia achieved their $1 billion target, but at what cost?
Apart from the bad blood driven but the lack of good faith in the negotiations, Sutherland’s pitch of making cricket “the game of Australia” appears to have been thrown out the door when the blinding rays of dollar bills appeared.
Ten’s offer of having everything on free-to-air, albeit using their secondary channels for support, is something cricket has never seen before in Australia. Some would argue that it would have helped the sport grow faster than any other tool at Cricket Australia’s disposal.
The fact that Foxtel is in less than 30% of Australian households, and has a churn rate of 13.5% per year, greatly reduces the ability to introduce the game to kids and families.
Serious questions now appear.
Does the extra $222m over 6 years, or $37m per year when annualised, outweigh the exposure lost from beaming live into every house in the country? Many would say no.
Furthermore, with Foxtel claiming that they will show all ODI’s and T20 exclusively, Cricket Australia have a large regulatory hurdle to overcome. Anti-siphoning laws currently dictate that these must be shown on free-to-air unless there is no market for them. It will be difficult for Cricket Australia to show this given the three major networks all bid.
Therefore, has the Communications Minister already agreed to waive this statutory condition? Is Sutherland gambling that he can simple ride roughshod through the halls of Canberra at a later date?
Announcing deals that contravene Australian law without directly answering how one intends to stay compliant is extremely unusual. But it also screams as to the arrogance of the Cricket Australia process and culture. The same culture that an independent committee is currently reviewing after the recent ball tampering incident in South Africa.
So what were Cricket Australia’s actual drivers?
Perhaps its executive bonuses were directly linked to reaching the $1 billion target? Perhaps it is about saving face given that the percentage increase in cricket’s broadcast rights trail virtually every other mainstream sport in Australia? Was it pressure from the player’s union after their arduous “fair share” revenue sharing agreement?
It’s not as though a few million here or there will actually make any difference to cricket. But giving up the opportunity to have all of cricket on free-to-air is a huge loss.
What value do we put on that?
We can always learn from the past. The ECB still haven’t addressed their mistake of putting cricket behind the paywall in 2005. In Australia, as soon as the NBL went from Ten to Foxtel the first time in the early 2000’s, the sport’s popularity plummeted.
Let’s hope that in chasing that last penny, Cricket Australia haven’t driven a stake into the future growth of the game.
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