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AFL's hunt for more broadcast dollars could cost it the fans

Football

Gillon McLachlan’s “parting gift” to the AFL would be a new television-broadcast rights deal that quickly fills in the financial hole left by the COVID pandemic. But will the fans be better off?

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Channel Seven’s old Adelaide studios at Gilberton are gone, but not the lessons from an executive decision on when to show a Crows game on a Sunday afternoon in April, 1994.

Offended by Seven putting the match from Perth on delay, annoyed Crows supporters took aim at the program the station executives had sought to protect and had preferred ahead of an AFL telecast. The gap between Seven and Nine’s 6pm news ratings widened.

Today’s question is: do AFL fans have the same power to stop league executives, such as outgoing chief executive Gillon McLachlan, chasing more and more dollars – ultimately from the supporters’ pockets – when selling the game’s television rights?

Sydney Football Club chairman, South Australian-born Andrew Pridham, hopes the fans do not become the major losers in a new AFL broadcast deal that not only will shape viewing habits on big and small screens, but could also determine when supporters know of the time and date of home games in a “floating fixture”.

“The priority should be fans, members and clubs,” says Pridham, while McLachlan is in New York studying how American professional sports have answered the question of spreading their events across free-to-air television, subscription networks and the increasingly powerful digital streaming channels.

One leading Australian television executive, who will challenge McLachlan to stop the AFL following European pro sports that have moved completely away from free-to-air television, told InDaily this week: “Who monitors the sporting bodies when they start selling television rights? Where is the regulator? Who is the AFL responsible to … who are they accountable to when these deals are done? No-one!”

Indeed the 18 AFL clubs have handed all power to the AFL on the sale of their games to television empires.

The federal government’s anti-siphoning laws on sport are increasingly outdated – and becoming irrelevant – with the advent of streaming and digital platforms services such as Kayo, Amazon, Paramount (that has the A-League soccer rights in Australia) and even Tik Tok that is showing Spanish La Liga football matches.

And the fans, in particular club members who were hailed during the COVID pandemic for “saving the game” from financial ruin? “We, as fans,” says AFL Fans Association president Cheryl Critchley, “understand the commercial realities. But the AFL has to find that balance between the fans and those commercial needs (answered in billion-dollar television deals).”

News Corp chief Rupert Murdoch joins AFL chiefs and Seven Network’s Kerry Stokes, to announce a record broadcast deal fin 2015. Photo: AAP/Joe Castro

Events since that momentous decision in Adelaide television on Sunday, April 2, 1994, sound alarm bells for the fans. The timeline on AFL television rights would suggest supporters have lost the power base they once commanded with a pen in ratings books. Today, they should expect to pay more often to see their AFL teams on their televisions, phones and iPads.

“The number one wish of the fans,” adds Critchley, “is to have as much AFL on free-to-air television as possible. And if there is to be streaming, it needs to be of good quality – and it must be affordable.”

Early in the 1994 AFL season, the second week of the home-and-away series, Crows fans were faced with an unwanted change to their routine. After three years of seeing every Crows “away” game from interstate shown live on Channel Seven, usually with a 30-minute lead-in program dedicated to all things Crow, the executives at Gilberton gave priority to their top-rating 6pm news bulletin.

The Adelaide-West Coast game in Perth started at 4.45pm, but the telecast was delayed on South Australian television sets until after 5pm and “neatly” wrapped around the 30-minute news bulletin at 6pm. There was no pay-TV unit, such as Fox Footy, to present the game live to those prepared to pay a monthly subscription.

The backlash to Seven’s news ratings was significant for weeks. But not enough to stop network management from ignoring the fans again.

By 2011, Seven dismissed the wishes of South Australian football fans on much-watched Friday Night Football telecasts. In Adelaide, these were delayed by 30 minutes to ensure Seven could keep “Better Home and Gardens” in the 7pm timeslot.

Then Foxtel chief Kim Williams (later an AFL commissioner) could not help grinning while sitting next to Seven boss Kerry Stokes through the AFL press conference in Melbourne – to announce the then-record $1.25 billion sale of the AFL television rights – knowing his pay-TV network was becoming more appealing with Fox’s vow to show all its games live.

But Foxtel – today the largest contributor of cash to the AFL’s television broadcast rights – has delivered its own hit on Crows and Port Adelaide fans and their hip pockets. Since 2017, the Fox Footy Channel has kept exclusive rights to a combined six Crows and Power matches forcing delayed telecasts on Channel Seven.

Strategically, Foxtel has chosen interstate matches for these six games. If they were at Adelaide Oval, the choice would be to buy a ticket at the gate or a Foxtel subscription. Away games leave only one option. Foxtel’s telemarketing and advertising campaign was pointed: “The only way to see every Crows and Power game live is on Fox Footy”.

Even then South Australian Premier Jay Weatherill was taken aback. “Outrageous,” he said. “There should be a Royal Commission. Who’s idea was this? I want to see them. Bring them in. Get them into my office.”

One media consultant told InDaily: “Foxtel wants to sell subscriptions. Football fans want to see AFL games live. You can watch a documentary, a film and even MasterChef on catch-up but not an AFL game when you can’t avoid knowing the result these days.

“So you don’t see six Crows and Power games live on free-to-air now. The next rights deal will probably increase that to nine games (from 2025).”

For all of Weatherill’s outrage, five years later no-one has stopped this Fox Footy exclusive arrangement – as Crows and Power fans have noted with games played in Victoria (against Essendon and Carlton at Marvel Stadium) during the past month.

What has changed is the viewing habits of the fans. Streaming is eating into free-to-air television audiences. Once considered dodgy – as well remembered with Optus’ major failure with streaming the 2018 World Cup that ultimately had live telecasts aired on the SBS free-to-air signal – the technology is vastly improved.

“Fans go to the best available screen – and that often is not the television set in the family lounge room any more,” said one television analyst. More and more fans watch AFL games on devices, such as their mobile phones.

Friday Night Football ratings for free-to-air television in Adelaide have fallen from an average of 152,000 in 2006 to 89,000 last year. Crows games have slipped from an average of 200,000 on free-to-air television in 2006 to 93,000 last season. The Showdown derbies between the two South Australian clubs – the most-anticipated match in Adelaide each year – has changed from average audiences of 409,000 and 396,000 in 1998 to 150,000 and 149,000 last year.

And the eyeballs have not all moved to Fox Footy – with the promise of no ads from siren to siren. While free-to-air and Fox audience numbers have both dipped, the fallaway – and more – has been picked up by streaming service Kayo (a wholly-owned subsidiary of Foxtel).

The major streaming networks, such as Netflix and Amazon, also have far more money to spend on securing sporting rights than exists today in the strained budgets of the old guard of free-to-air television networks. And this is why McLachlan and his executive team are in New York this week.

The next AFL broadcast rights could surpass the Australian record six-year deal of $2.508 billion offered by Seven, Foxtel and Telstra in 2015 for AFL rights – and extended to 2024 with a two-year $946 million agreement that filled major financial holes in the AFL budgets created by the COVID pandemic.

The current deal assigns four games a week to free-to-air telecaster Channel Seven, all nine to Foxtel and Telstra, and keeps the AFL grand final exclusively with Seven (as demanded by the anti-siphoning laws).

AFL fans are deeply concerned about the gradual loss of free-to-air games. Photo: Michael Errey/InDaily

McLachlan this week in New York will note different professional sports in the US have differing television strategies. The American National Football League – that last year signed an 11-year, $US110 billion ($A155 billion) deal – is considered the most fan-friendly by spreading its games across the three long-standing free-to-air networks, ABC, CBS and NBC, along with Fox, subscriber network ESPN and streaming with Amazon (which must release games to other networks in the cities of the participating teams, just as Fox Footy does to Seven with Crows and Power matches).

But television executives and consultants interviewed by InDaily say McLachlan and his fellow AFL executives needed to just take a short taxi ride to the Cricket Australia offices outside the MCG to learn of the dangers of bypassing free-to-air television for the promise of big dollars of streaming services.

Cricket Australia sold its domestic Twenty20 Big Bash rights exclusively to free-to-air network Channel 10 on a five-year deal (2011-2016) for $100 million when it was hoping for $250 million.

What Cricket Australia missed out on television money was recaptured with average Big Bash crowds rising from 11,000 to 30,000.

“And then Cricket Australia went, ‘How good is this? We can make a lot more money if we split the rights’,” noted one media consultant of the Big Bash move to Foxtel and Channel Seven. “And what happened? The Big Bash has crashed… and no-one wants to buy it.”

The hundreds of millions of dollars lost by the AFL during the COVID pandemic and the rising costs of expansion, particularly in the AFLW where the women’s players want a 107 per cent increase in their pay, has McLachlan and his team looking to rewrite their own records for delivering Australian sport’s richest broadcast deals.

“All sports have rising costs – and that puts money on the top of the wishlist when it comes to broadcasting their events,” one analyst said. “Do you want the most money or do you want the biggest audience, both on screens and at the games?

“The chase for money means we will see less and less sport on free-to-air television in Australia,” added the consultant with the long-standing examples from European sport, including English cricket, serving as a template.

“The AFL needs to remember that free-to-air television might deliver less money but it is available to everyone. Foxtel has a 30 per cent reach…”

South Australian-based Crows and Power fans have had it better than their Victorian counterparts since Adelaide became an AFL market in 1991. Every Crows and Port Adelaide game – so far – is guaranteed to be shown on free-to-air television (even if six are now on thee-hour delayed replays with Seven).

Will the next deal cut by McLachlan offer the same guarantee?

“Our position – not that we are consulted, despite being the biggest ‘stakeholder’ in the game – is that there must be as much shown on free-to-air as possible,” Critchley said. “There is still an older group of fans who are not across all the bells and whistles of streaming services. It is like the move the AFL has made to digital tickets on your phones rather than a plastic pass you can wear with a lanyard: all good in theory, but you do need to take people along for that ride.

“The AFL needs to remember we, as fans, support this game – a point that was reinforced during the COVID pandemic when fans paid for memberships, had no games to go to and did not ask for refunds.

“If we stop turning up as fans, there is no atmosphere at games… and not a product the streaming services will want to show.”

Part of the trade-off to the media giants is the floating fixture. This season, the AFL locked in the first nine rounds – and last week had Seven telecast the so-called “mockbuster” clash between West Coast and Richmond from Perth that ended in a 109-point thrashing of the hometown Eagles. Channel Seven would have loved the right to have changed this fixture for a game with the promise of higher ratings, just as the NFL allows with its “flex” arrangements on Monday Night Football in the US.

The floating fixture – with the AFL waiting to judge form before locking in games – helps maximise television ratings and commercial returns but is not popular with the fans.

The AFLFA poll shows 91 per cent of fans dislike the floating fixture preferring a locked calendar released each November – and building social events (such as birthday parties) away from must-see or must-attend AFL games.

“And the AFL needs to remember,” says Critchley, “that without the fans, you don’t have a game – and nothing to show on television.”

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