Australian sport supporters deserve to see their favourite sports live on free-to-air television as much as possible.  Sport Supporters Australia has launched a campaign to ensure our voices are heard as the Government reviews its anti-siphoning laws.

Submission to the Review of the Anti-siphoning Scheme in the Contemporary Digital Environment – October 2009

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Principles

In response to the Government’s discussion paper Sport on Television – A review of the anti-siphoning scheme in the contemporary digital environment, SSA has established a number of core principles for how it believes the Government should approach the review with the interests of sports fans in mind.

These four guiding principles are as follows:

1.  That supporters have access to the sport they wish to follow, broadcast live on television
2.  That a significant percentage of Australia’s most popular sports should remain freely available on free-to-air television
3.  Where these sports are not available live for free, they should be available live via other means, so that fans’ are not deprived of the opportunity to watch live sport
4.  Where it is possible to meet the above 3 objectives, sports rights holders should be able to access a competitive market for media rights that enable these bodies to generate income to provide additional support for grass roots sporting activity and development as well as infrastructure for supporters.

SSA’s response to the specific issues raised in the discussion paper follows.

The purpose of the anti-siphoning scheme and its impacts

In line with our principles, SSA believes the anti-siphoning list has a clear purpose in ensuring that a large percentage of Australia’s most popular sporting codes remain available for Australian supporters to watch on television for free.

However, the anti-siphoning list is failing to address two key issues;

• Live broadcasting: as has been consistently demonstrated over several years, including in 2009, decisions made by broadcasters have meant that sport supporters have been unable to view live games at all or at best, have been forced to watch delayed broadcasts at ridiculous hours in the early morning. Typical examples are the broadcasting of AFL in NSW, ACT and Queensland; and the NRL and Rugby Union test matches into Victoria, SA, WA and Tasmania. While this not only inconveniences fans and is against the spirit of the anti-siphoning scheme, it also hinders the major sports in trying to develop and grow new markets in these states.

According to Auspoll research undertaken by the Australian Subscription Television and Radio Association (ASTRA) and cited by Malcolm Farr:
“About 21 per cent, or a fifth of Australians, said they were keen sports fans and these are the people demanding better access to live broadcasts.“ ¹

• Financial returns to sports rights holders: the current regime may not be delivering the best possible financial return to the sports rights holders as at present, it provides significant power to the three commercial free-to-airs in negotiations over sports rights through their ability to negotiate with the market for secondary rights (such as Pay TV).

To help balance these two objectives SSA is advocating for two new requirements within the Scheme:

• A 50% rule: In practice, it is already highly unlikely that free-to-air broadcasters broadcast all of the games and events within certain categories of sports where there is an ongoing season (AFL, NRL) or multiple events within a certain period of time (pool games of Rugby, Cricket and Soccer World Cups; Olympic and Commonwealth Games). As is the case with the AFL and NRL, often the free-to-air broadcaster (the principle rights holder) on sells part of these rights to a pay television provider (Foxtel/Foxsports).
  
  As it is likely that new digital media and the National Broadband Network are likely to open up the market for Pay TV-like services and to ensure that as much live sport is available as possible, we would seek to add a 50% threshold into the list for these categories of sport.
  
  This would operate as follows. Once the allocation of 50% of the broadcast rights to a free-to-air broadcaster has been achieved in negotiations – the sports rights holder would then be free to negotiate with additional broadcasters directly and without the restrictions of the list operating.
  
  This is likely to improve the ability for the sports rights holder to maximise the value of their product in the marketplace without disadvantaging sports fans, as it simply codifies an existing practice.
  
  This may also provide the ability for some consistency to be introduced into the listing of sports like the Grand Slam tennis tournaments.
  
  The rule would only operate for ongoing events and one-off events involving multiple games or sports and would not apply to one-off events or one day events such as the Melbourne Cup.
• Penalties for not showing listed events live: To ensure the integrity of the list and the benefits that it provides to the free-to-air broadcasters in their ability to acquire sports rights, we believe the quid pro quo is that broadcasters should show these sports live.
  
  Therefore, where broadcasters take a decision on commercial grounds not to broadcast sports live into certain markets, SSA feels that the broadcaster should receive a substantial financial penalty to be determined and implemented by the Australian Communications and Media Authority (ACMA).
  
  To be fair to the commercial interests of the broadcaster, we feel there should be a mechanism to seek an exemption from ACMA that would enable sporting content to be carried live on the broadcaster’s multi-channel (such as the carriage of Rugby League and Union games into the southern states and AFL into NSW and Queensland).

The appropriateness of events on the anti-siphoning list and their rationale for inclusion

SSA believes that the majority of sports and structure of the list is appropriate, with a couple of exceptions.

Given the increased interest in the Australian national soccer team, SSA believes that the list should be extended to include all Australia’s World Cup qualifying matches.

We also believe that the list should look at having a consistent wording and interpretation around the broadcasting of all four Grand Slam tennis tournaments so that there is a consistency in the number of matches broadcast and the times they are broadcast.

The duration of the anti-siphoning list

SSA believes the process of reviewing the anti-siphoning list every five years (approximately) is not effective in taking into the account the rapid changes in technology and the commercial needs and realities of the major spectator sports, who are competing for market share and funding in an ever changing business and regulatory environment.

Therefore, SSA proposes that the Government establish an expert committee to review the anti-siphoning list every two years to ensure the list is reflecting commercial and technology needs broadcasters, sports rights holders and fans.

SSA also suggests that as part of its charter, the expert committee could make additions or deletions from the list every two years based on the growth, performance and popularity of the sports in the previous two years.

For example, the growth in popularity and the performance of the Socceroos in recent years makes it a necessity to ensure all World Cup qualifying matches are part of the next anti-siphoning list. Reviewing the list every two years and protecting major sporting events based on popularity and performance in the previous two years along with the criteria already in place, could act as an incentive to peripheral sports to continue to develop their sports and therefore be in a position to be added to the list and attract greater funding through the selling of the television rights to that sport.       

The appropriateness of the current automatic de-listing arrangements

SSA believes that some form of de-listing should be maintained to ensure that, where possible, sport is broadcast live.

However, SSA also feels that the current 12 week period does not provide sports rights holders with enough time to properly negotiate an alternative arrangement. This de-listing period should be extended to 6 months to better reflect the commercial and negotiating timeline realities of business.

Scheduling and coverage of events on the anti-siphoning list

To ensure the integrity of the list and the benefits that it provides to the free-to-air broadcasters in their ability to acquire sports rights, we believe the quid pro quo is that broadcasters should show these sports live.

Recent examples of free-to-air television networks not showing significant sporting events live include:

• One hour delayed coverage of the AFL preliminary final between Collingwood and Geelong into Brisbane and Sydney on Channel 10;
• Not one of the NRL Quarter Finals shown live on Channel Nine in Melbourne, Adelaide or Perth; and
• Significantly delayed coverage of the State of Origin series into Adelaide and Perth.

In addition to this, regular home and away season games for both the NRL and AFL are regularly broadcast on a delay depriving fans of access to live sport. The discussion paper lists other such occurrences during ACMA’s monitoring of free-to-air coverage on the list from 2006-08:

…the Wimbledon Championship and Australian Open tennis tournaments, the ICC Cricket World Cup and the State of Origin rugby league series were not broadcast in their entirety or received delayed coverage in some states. The French Open tennis tournament and a Davis Cup tie between Australia and Chinese Taipei did not receive any free-to-air coverage. ²

Where broadcasters take a decision on commercial grounds not to broadcast sports into certain markets live, SSA has already flagged that the broadcaster should receive a substantial fine, with the ACMA given greater powers to monitor adherence to the intent of the list and issue fines under the Broadcasting Services Act.

However, as an incentive for the free-to-air networks to gain the maximum benefit from the rights they have purchased in the first place rather than on sell them to Pay TV operators, we feel that there should be a mechanism for the free-to-air networks to seek an exemption from the Australian Communications and Media Authority (ACMA) that would enable sporting content to be carried live on the broadcaster’s digital multi-channel.

This would have the additional benefit of ensuring that live sport is available for fans, first and foremost on free-to-air television. It would also act as an incentive to ensure the continued take up of digital television by the Australian population and potentially, allow the major sports to negotiate a better financial arrangement from the free-to-air networks when sports broadcasting rights are negotiated.

The restriction on free-to-air television broadcasters being able to show an event on the anti-siphoning list exclusively on their digital multi-channels

SSA feels that the interests of ensuring that sport is available live and free needs to be balanced with ensuring a competitive market place for sports rights holders. A move to remove this restriction completely would have a significant impact on the ability of pay television operators to acquire sports rights and would also severely impact the competitive tension between commercial free-to-air operators and the pay television sector.

However, as stated in the previous section, SSA feels that there should be form of mechanism so that a free-to-air broadcaster could apply to the regulator (ACMA) for a temporary exemption from this clause to ensure that sport is shown live in the case of scheduling clashes or in the likelihood of low ratings in markets where the sport is not as strongly supported. This would go hand in hand with the stated fines for not showing sport on the anti-siphoning list live.

This acknowledges that as Australians more readily adopt digital television towards the analogue switch off in 2013 and as 53% of households already converted to digital ³  – free-to-air multi-channels provide a legitimate option to ensure that a greater number of sports fans have access to live sport on free-to-air television.

This exclusion should only be sought in the period before the event is shown (ie. application would need to be received no earlier than 30 days prior to the event being shown) and no blanket exemptions should be granted.

Coverage of sport on new media platforms

The growth and potential of new media platforms is both an opportunity and a threat in terms of sporting fans being able to access sporting content. It is an opportunity for fans to be able to view and access sporting events on mobile technology and platforms other than traditional forms such as television however, mobile technology providers invariably charge a fee for downloads or access to content on mobile technology platforms.

However, while SSA believes the majority of televised sport should be live and available on current free-to-air or digital channels, the major sporting bodies (the owners of the content) should be able to access a competitive market for secondary media rights (including new media platforms) that enable these bodies to negotiate the best possible financial arrangement which in turn, will provide additional funding support for grass roots activity and infrastructure for supporters.
 
The anti-siphoning list in its current form actually cedes control of the secondary market (Pay TV and other re-broadcasting) to the free-to-air broadcasters. This isn’t a huge concern where you only have one real player to deal with (Foxtel/Foxsports) - but the NBN and new mobile technologies are likely to open up the market for secondary rights and the sporting bodies should be able to control this negotiating process.

SSA does issue a word of caution though. For some time, the major spectator sports have been pushing (ie. fronting a Senate committee in April) for greater control of the coverage of their sports online and by whom (ie. news outlets).

We believe this form of ‘content control’ and the argument being put forward by the major sports that ‘it is our content and our business is to monetise that content’ could prove counterproductive to the sports themselves should they persist with this approach.

Firstly, under Australia’s current Copyright Act, there is a fair use exception that allows non-rights holders to show content in news coverage. We believe that this provision should stay as it ensures sports fans get access to highlights of their favourite sports and in fact, encourages more people to take an interest in the sport itself. This in turn, should be seen as beneficial by the major sports in increasing exposure to the sport rather than a loss of ‘our content.’

Secondly, some journalists have reported being encouraged by the major sporting bodies to not report controversial umpiring decisions, poor behaviour by sporting stars or rough play. This form of censorship would only increase if the major sports were allowed to dictate what coverage was seen of sport on the nightly news or online news services and essentially would see, as WA journalist Tim Clarke described in an article on 20 April this year:

“…the custodians of the game becoming the sole gatekeeper of how it (sport) is viewed by those not lucky enough to get a ticket.” ⁴
 
Conclusion

Sport supporters in Australia cover a broad spectrum of the Australian community but by and large, the majority are average wage earners who are doing their best to ensure that their standard of living and those of their dependants, is moderate, comfortable and within their means. The introduction of new digital channels gives Government and the free-to-air networks the opportunity to ensure that the millions of sports fans in this country can access the sports they want to view free of charge thus allowing supporters to enjoy the sports they love without any additional costs.

However, the availability of the new digital channels should be seen as an opportunity to complement the current free-to-air channels and should come with a responsibility of the networks to show sporting events live. 

Therefore, SSA believes the anti-siphoning list, in general, is effective and relevant as it stands, however the regulations need to be tightened to ensure the free-to-air networks broadcast major sporting events live on either their current terrestrial or digital networks. We also believe the opportunity should be there for the sporting organisations, Pay TV operators and new media providers to benefit commercially out of negotiating secondary rights in an open market. These secondary rights should be negotiated by the sporting bodies themselves and not under the control of the free-to-air networks wanting to maximise their financial returns without any consideration for the sporting organisations or the fans.

References

¹  Malcom Farr, The Daily Telegraph, Sunday 27 September 2009
²  Sport on Television – A review of the anti-siphoning scheme in the contemporary digital environment, Department of Broadband, Communications and the Digital Economy, August 2009.
³  Digital Tracker 2nd Quarter Report, Department of Broadband, Communications and the Digital Economy, August 2009
⁴  Tim Clarke, WAtoday, Monday 20 April 2009