This month in the Australian Federal Parliament, a bill proposed by communications minister Mitch Fifield will, if passed, see changes to media ownership and licensing laws, including those blocking siphoning of important sporting fixtures by pay television networks.

Andrew Kennedy analyses what changes are happening now in the shift to online consumption of sports and chart what may lie ahead for consumers if certain deals with independents and minor parties do go through, allowing the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017 to pass the Senate.

Changes are afoot for Australia sports fans if the the Broadcasting Legislation Amendment is passed. Photo: Simon Leonard

 

Anti-siphoning is a law arising from the social policy of ensuring access for all Australians to broadcasts of events of national interest. This rule only applies to television and not, for example, to online platforms. Events such as the AFL Grand Final, Commonwealth Games, FIFA Soccer World Cup and the Australian Open tennis championship must have television broadcasting rights offered first to free-to-air channels before pay television can bid.

Networks like Foxtel can automatically start their bidding when there are 12 weeks remaining before the match or tournament in question, or if the Minister for Communications makes an alteration as an exception.

Leagues such as Suncorp Super Netball, shown on Channel Nine multi-channels, and the defunct ANZ Championship, shown on various networks over its lifetime, have had no protection for free-to-air channel negotiations under this law.

Currently, anti-siphoning for netball only applies to the senior national side, the Australian Diamonds, and protects all their matches played in Australia and New Zealand, all fixtures of the Commonwealth Games, plus the semi-finals and finals of the Netball World Cup where Australia is playing. This list of matches will be decreased if the current bill is passed, and there is bipartisan support for this change.

On the other hand, the axing of the two-of-three rule is more controversial. This law requires that one person or entity may not control licenses for more than two of radio, television, and newspaper in a specific radio licensing area. This rule would disappear if the proposed bill goes through the Senate and the Labor party is blocking the whole bill in opposition to this change alone, necessitating a search for independent or minor-party senate support.

The 75% reach rule dictates that one company or person can only hold licenses for television covering 75% or less of the Australian people. This is another major piece of legislation that will disappear, with opposition support, when Fifield’s changes are introduced.

Will a large majority of the Australian Diamonds matches be shown only on Pay TV in the future? Photo: Simon Leonard

 

In the distance there are signs of a shift in broadcasting – while no internet provider has yet been the sole purchaser of rights to an anti-siphoning list event in Australia, a sentinel event occurred in 2016 when Twitter live-streamed the Melbourne Cup horse race, which is on the list of protected events. It reminded all broadcasters that internet platforms such as Telstra, Optus, Amazon, Google, Facebook, and YouTube are not restricted by anti-siphoning laws.

Already, large and wealthy telecommunications and internet companies have the potential to buy rights to the major sporting events of national interest exclusively. However, rights holders prefer to divide their interests between television, radio, and internet. This is partly because infrastructure in Australia cannot cope with mass online audiences, and also as sporting codes would want to deliver their events to as many people as possible.

In practice this leads to the application of split-rights. For example, those negotiated for Suncorp Super Netball between Netball Australia and Channel Nine multi-channels and Telstra’s Netball Live app. It also means that niche sporting leagues such as the English Premier League are shown successfully to a smaller group of consumers, in this example, by Optus. In contrast, it is currently too risky to show an Australian league of a football code and achieve reliable delivery to millions.

Changes proposed in the Broadcasting Legislation Amendment bill would soon lead to conspicuous reshaping of the Australian media landscape. Scrapping the two-of-three rule and the 75% reach rule would respectively mean one person or company could own television, radio, and print licenses in one area and could hold broadcasting licenses for the entire Australian population.

Without replacing these novel rules aiming for assured diversity, in an already highly concentrated media market like Australia’s, this will have the effect of reducing diversity in media, barely mitigated by a modest trend towards online consumption of news, television shows, sports, and other entertainment.

With respect to netball, the content that would no longer be protected by anti-siphoning includes those Australian Diamonds matches played in Australia or New Zealand – the Constellation Cup and Quad Series. Those that would remain protected are Netball World Cup semi and grand finals (if Australia is playing), and all Commonwealth Games matches.

By opening competition from pay television companies, it is possible for a sporting code to attract further sponsorship revenue and find a larger audience.

 

Image: Netball World Cup 2019 logo

 

The alterations to anti-siphoning itself are not in contention – not from Labor, the sporting codes or television broadcasters. In fact, Labor suggested earlier in the debate that a different bill go through without the controversial change of removing the two-of-three rule. This offer was rejected by the government. Additionally, the package proposed by the government, but not contained in this particular bill, contains a universally-supported but small tightening of restrictions for gambling advertising in live sports.

It is other components of the new bill that have variable and changing support from stakeholders. Some are dissatisfied with the supposed appropriation of the Labour 2016 election policy to fund the ABC $30 million for women’s sports. The coalition government is offering the same amount for women’s sports on Foxtel as part of this bill.

Meanwhile Channel Seven, owned by Seven West Media, was opposed to the initial idea to repeal the two-of-three rule in 2016, until the government put this together in the 2017 bill with, amongst other things, a plan to abolish the television license fee (a 4.5 percent gross revenue fee totalling $127 million per year for the three commercial networks), to be replaced by a spectrum usage charge (which will be closer to $40 million per year in total for all three networks).

Seven Chairman Kerry Stokes stated of the revamped proposal, “I endorse the complete legislation package proposed by the Government, including licence fee reductions, media ownership changes, gambling advertising restrictions, anti-siphoning, and the spectrum change.”

Free-to-air companies insinuate that it will lead to them producing more Australian content, but there is no prescribed condition on how their saved money should be used. It is an easy bow to draw that they will be happy to offset losses in market share and advertising revenue to online streamed services like Stan and Netflix.

For the moment, consumers should continue to access their sport for reasonable prices, if not for free. Meanwhile, the greatest consequence of the passing of the Broadcast Reform bill is to be greater concentration of traditional media into the hands of fewer individuals and companies. As the access to entertainment via online platforms increases, deliberate complacency by politicians to not incorporate protections for the new forms of media into laws similar to existing anti-siphoning regulations might in time see erosion of fans’ readily affordable access to their beloved sports broadcast.

 

*Netball Australia were contacted for comment, but at time of press had given no position on the issue. It may be that, like several other codes, Netball Australia may not object to removal of matches from the anti-siphoning list.

 

 

Twitter: @NetballDrewski