Channel Seven entitled to tiny rights discount, arbitrator finds, amid Cricket Australia dispute

A strong season of ratings for the Australia-India series and BBL appears to have weakened the position of the free-to-air network

Seven West Media are entitled to a broadcast rights fee discount of as little as A$5 million from Cricket Australia due to changes in the schedule due to Covid-19, according to the independent arbitrator demanded by the free-to-air network.

In a draft outcome understood to have been delivered to the warring parties on Tuesday night, the arbitrator Justin Jameson, of Venture Consulting, concluded that Seven should get only a tiny portion of the A$70 million reduction the debt-laden network had been chasing. The figure would rise to around A$8 million if the rescheduled Test match between Australia and Afghanistan does not go ahead next summer prior to the Ashes.

While Jameson’s formal finding is still to be tabled, the heads-up was a source of some relief to CA, after an ugly and protracted campaign by Seven for massive cuts to their A$82 million-a-year share of the A$1.18 billion deal signed alongside Foxtel in April 2018.

Led by their chief executive James Warburton, Seven have mounted all manner of arguments for a greater discount, from complaints about the quality of the BBL to allegations of a vast conspiracy between CA, the BCCI and Foxtel to move this summer’s limited-overs fixtures from January to November.

Seven had embarked upon ambitious cost-cutting campaigns last year, designed in part to raise the long-sinking stock price of Seven West Media. Cricket’s presence appears to have helped lift the network’s value significantly over summer: shares valued at just 13 cents in October are now trading at a relatively princely 54 cents – Seven’s highest share price since 2018.

Ironically, the finding for an A$5 million discount to Seven’s fee would give it significantly less of a saving than the A$20 million believed to have been handed to Foxtel last year, an effective reduction of A$5 million a season for the remainder of the rights deal. CA has attempted to avoid slinging public mud back at Seven, particularly as the two organisations continued their operational relationship during the international and BBL schedules, but there has undoubtedly been a corrosive effect on relationships.

The dispute reached arguably its lowest point in November, when Seven lodged a legal affidavit as part of “pre-discovery” action aimed at targeting schedule changes as being the result of convenience for India, CA and Foxtel rather than Covid-19. Private exchanges between CA’s head of commercial and broadcast, Steph Beltrame, and Seven’s head of sport Lewis Martin, were printed in the document and widely reported.

That court action remains in play, although it remains to be seen how Seven’s multibillionaire chairman Kerry Stokes reacts to the underwhelming outcome of Warburton’s push for independent arbitration.

Either way, the successful completion of the international home schedule, with vastly improved audiences for both Seven and Fox Cricket relative to India’s previous visit in 2018-19, plus the staging of the BBL in its entirety, left the free-to-air network’s protests largely in the realm of impressions and assertions rather than legally binding volumes of content.

“With so much positivity around Australian cricket, it is disappointing that Seven West Media has again chosen to use the media to talk our wonderful game down,” CA’s acting chief executive Nick Hockley said in November after the affidavit’s release. “CA has maintained all along our commitment to delivering a thrilling summer of cricket and on behalf of all involved, be that governments, partners, players and staff, I’m proud to say we are doing just that. We remain confident in our contractual position.

“We continue to have tremendous respect for the hardworking people across Channel 7’s cricket and news broadcast teams and congratulate them on the substantial increase in ratings cricket has delivered them to date this season. We have, and will continue to, fulfil our obligations to our partners and supporters by scheduling a brilliant summer of cricket, despite the cost and complexity of doing so given the current public health situation.”