Only communist China and the AFL think they can control what is shown on the Net. The Super League Webcasting War is being fought behind the scenes by a cast of characters and conflicting interests that only the Internet could invent. Terry Maher reports.

In Melbourne, where footy is everything, they are speaking of this as the war to end all wars. Its public protagonists are John Elliott in the Blue corner and Wayne Jackson in the Red corner. Elliott, the swashbuckling 70s bizoid with the raspy voice and the bulbous nose, is president of the Carlton Footy Club and the Carlton Social Club – ground manager of Optus Oval, the last suburban ground left in Wayne Jackson’s 16-team AFL national competition that pulls-in $108.5 million a year because six million spectators go to the games. Jackson, the ponderous Pooh-Bah of the AFL, is an accountant with an accountant’s demeanor, a former bit-part player for the Woodville West Torrens FC who has risen through the ranks as managing director of both Thomas Hardy & Sons and SA Brewing to become CEO of a sporting organisation with a cash-flow crisis.

The Australian Football League’s problem is Mr Macawber’s nightmare; it is planning to spend more than it is earns and will have to borrow the difference from the banks. Total player payments rose 29.77 per cent last year from $52.4 million to $68 million. Under the collective bargaining agreement with the AFL Players’ Association, total player payments will rise to $76 million this year and $83 million in 2001.

A renegotiation of the TV rights at the end of 2001 is what allows the AFL to get away with this seemingly illogical largesse. Apart from 1987 (when Fairfax stuffed it up), the Seven Network Ltd has held the rights to AFL/VFL football for every year since 1957. Seven presently pays about $30 million a year for the broadcasting rights but that could treble to about $90 million a year if, as expected, the renegotiations become a dutch auction between the Seven and Nine networks. When negotiating the current deal in 1995, Seven paid the AFL a $20 million “fee” for the first and last right to bid for the post-2001broadcasting rights. It is also said to have guaranteed to bid a minimum of $100 million for rights to 2012.

But the public slanging match between Elliott and Jackson is not about the TV broadcasting rights, despite appearances to the contrary – its about internet rights to Webcast AFL games which, according to the Financial Review, could be worth up to $50 million a year in their own right.
In 1995, when Seven and the AFL last dealt on broadcasting, free-to-air television was the only form of broadcast service providing moving pictures in real time. Since then, pay TV using cable and satellite as a method of delivery has been introduced. But the latest developments in technology like digital television could lead to a variety of other subscription services being available like video on demand, pay per view, datacasting and interactive broadcasting via the internet. None of these were mentioned in the 1995 agreement.

The AFL even made a submission to the Federal Government’s Productivity Commission inquiry into broadcasting where it recommended the abolition of the anti-siphoning provisions of the Broadcasting Services Act because “the provisions have not operated as originally intended to protect the public interest. Instead, the provisions have effectively given free-to-air broadcasters control over all sports rights. Removing the anti-siphoning provisions would allow an increase in the number of matches, many of which are played concurrently, to be broadcast live from out of state thereby giving AFL supporters greater choice.”

The AFL also told the Productivity Commission that broadcast rights revenue was its largest single source of funding and that it wanted to “grow this revenue source by improving the ability to deal in existing rights and developing new rights.”

Crikey Media has been able to establish that at least three companies will be bidding for these “new media” Internet Webcasting rights when they are auctioned-off for the first time at the end of 2001 – Stuart Simson’s Sportsview, David Aspinall’s Premiers Club joint venture with News Ltd and Ted Pretty’s telstra.com.

Deciding who will win this multi-million dollar beauty parade for the Internet rights to the competition will be Jackson and fellow AFL commissioner Graeme Samuel, who just happens to also be the chairman of the National Competition Council and a bitter Elliott-enemy of long-standing. This alone should make the real contest to be one of the century’s best.

Pretty, the Telstra whizkid, should need no introduction but Simson and Aspinall are blasts from the past. Simson, a former journalist, was once managing director of The Age and, fortuitously, happens to have been assistant commissioner to Professor Richard Snape at that very same Productivity Commission inquiry into broadcasting that considered the AFL’s submission about abolishing the anti-siphoning provisions to enhance the Internet rights.

Aspinall is now Kerry Stokes’ rotund right-hand-man at the Seven Network but in another life he fulfilled the same function for Alan Bond. In fact Aspinall, along with Bond, Peter Beckwith, Tony Oates and Peter Mitchell, was at that fateful Bell Resources’ board meeting on August 26, 1988, which moved, according to Bond’s testimony “to facilitate access by Bond Corporation to Bell Resources’ cash.” Aspinall, we should note, was not charged with any offences relating to his time at Bond Corporation.

Stuart Simson is the boss of Sportsview which does the Websites for the Carlton, Collingwood, Hawthorn and Western Bulldogs footy clubs. His Simson Media also does Bob Gotttliebsen’s BusinessDaily Website and the MyWheels and the ComedyCafe sites in conjunction with Steve Vizard’s Artists Services in a business called ArtSim. Artists Services is now owned by the British-based Granada TV Group and is the second largest shareholder in the Seven Network after Kerry Stokes.

Only last week Granada took its shareholding in Seven across the 10 per cent compulsory acquisition threshold to 10.4 percent. Apart from its ownership of Artists Services and its shareholding in Seven, Granada Media Australia has merged its Artists Services production company with the Seven Network’s production arm to form Red Heart Productions. Charles Allen, the Granada Group’s CEO says the purchase has sealed its alliance with Seven: “Granada and Seven share a common vision of developing activities across all media,” he said.

Simon told Crikey Media that Sportsview would definitely bid for the AFL’s Internet rights if those rights were put up for tender. Sportsview’s view is that the internet is the fastest growing communication medium in the world: “More Australians are taking-up direct internet access everyday. Using this new medium to communicate with customers is one of the greatest opportunities for business today. Sportsview is a major internet publisher and the vision of Steve Vizard and Collingwood Football Club President Eddie McGuire. Our team of experienced video-journalists, sports writers and historians prepare fresh and exclusive sporting news and information. Using cutting edge video and audio technology, Sportsview delivers an innovative, interactive, web-based experience to users.

“Our association with the game extends to publishing the country’s leading AFL club web-sites. Under exclusive arrangements with major AFL clubs, Sportsview has unprecedented access to players, administrators, coaches, officials and the people behind the scenes – taking supporters behind closed doors and into the heart of their club.

Sportsview is committed to providing up-to-the minute news and information about clubs, actively involving supporters with all aspects of club life and culture. Supporters can now experience their teams in a way never before possible,” says Simson.

But it is Sportsview’s “exclusive arrangement” with Carlton Football Club that gives Simson his clout in the bidding war for Internet rights. Carlton was the only club that refused to sign an agreement with the AFL last August giving the League right to negotiate broadcast rights on behalf of all the clubs. Carlton’s view, supported by CS First Boston’s John Wylie, who chairs the MCG Trust, and the heavyweight legal firm of Blake Dawson Waldron, is that the Carlton Social Club, as ground manager at Optus Oval, has clear legal title to the broadcast signal from games played at that ground. Ditto the MCG Trust and the MCG.

The property rights legal argument – that maybe tested in the Victorian Supreme Court this week – is that the party that occupies the venue may permit entry on certain terms. Just as it may be stipulated at a theatre that no flash photography is permitted, it may be stipulated at a football ground that use of audio-visual equipment is prohibited. David Brennan from the Melbourne University Law School says the Seven Network discovered this possibility in 1998 in the context of a dispute with the MCG over “virtual broadcast advertising”. He says the outcome will be shaped by a commercial compromise as “no one party holds all the aces” and there can be no property rights under present law in the “spectacle” of the match itself. In Britain, the Lords Cricket Ground has reached a separate agreement with the TV channels broadcasting games from its bailiwick and this is Carlton’s and the MCG’s minimum demand.

But given the anarchy of the Internet, there seems to be little to stop Carlton and the MCG Trust (through the Granada/Sportsview’s production capacity) from producing their own rival broadcasts of Carlton and Collingwood games at their venues. British soccer club, Manchester United, the largest in the world, has its own pay-to-view narrowcaster called MUTV which exists side-by-side with the club’s Premier League, Champions’ League and English Football Association broadcasting obligations.

Any attempt by the AFL to stop Carlton producing its own pay-to-view narrowcasts from Optus Oval could easily be shunted offshore to avoid Australian Broadcasting Authority approval and scrutiny. Only Communist China and the AFL thinks it can control what is shown on the Net. Unfortunately, the broadcast quality of Webcasting is still appalling and it will remain so for some years until someone unlocks the technology of the new spectrums, digital broadcasting becomes a reality and signals are delivered by HFC broadband cable. Or all three.

Stuart Simson and David Aspinall appear to share the same master in the Granada Group but Aspinall is much closer to the thrones of Wayne Jackson, Graeme Samuel, Kerry Stokes and Rupert Murdoch than Stuart Simson will ever be. (Where are you Graeme Samuel?) According to Alan Kohler in this week’s Financial Review: “What is not widely realised is that the AFL has already transferred internet broadcasting rights into a website jointly owned by itself (50 per cent), Seven Network (25 per cent) and News Corp (25 per cent).

“And what is even less well known,” according to Kohler, “is that those rights may have been sold to until 2003, unlike the free-to-air and pay-TV rights that are owned by the Seven Network, and which expire at the end of 2001. Seven has bought the right to make the final bid for those rights, and the early stages of the auction process are already underway. The exact details of the Internet deal between the AFL, Seven and News is a secret.

“What is known is that although the joint venture nominally expires at the end of 2001, there is a rollover provision that extends the deal for a further two years. A Seven spokesman told The Australian Financial Review yesterday that this rollover, in effect, gives Seven and News internet broadcast rights for another three years from now. But the AFL says that this is not necessarily true. It claims that performance hurdles need to be met for the rollover to be triggered and, in any case, the extension remains at the AFL’s option. If it looks like the internet rights will bring in large sums, then all bets are off,” says Kohler. (Where are you Graeme Samuel?)

This is where Aspinall’s Premiers Club steps into the ring as the proud belt-carrying incumbent (and this is where Graeme Samuel’s National Competition Council nightmares begin). The Premiers Club, launched last week as a new pay-to-listen-and-view subscription service on the official AFL website www.afl.com.au charges between $29.95 for a “standard audio pass” and $90 a year for a “Legend audio pass”. For this, subscribers get exclusive, password-protected, live audio (and later, video) broadcasts of all AFL games which all AFL-accredited radio and television stations are forced to provide (Where are you Graeme Samuel?) the AFL instead of putting them on their own corporate websites.

Despite its 50 per cent-owned, joint-venture status within the AFL corporate hierarchy, Rupert Murdoch and Kerry Stokes have no pretenses about who wears the pants in the Premier Club and who stands most-likely to have their purloined-Internet rights endorsed once-again by their silent partners on the AFL Commission (Where are you Graeme Samuel?): “The Premiers Club is a trading name of the Official AFL Website and is owned and operated by News Ltd and the Seven Network.” (Where are you Graeme Samuel?)

The afl.com site was launched in 1998 as a joint venture between News, Seven and the AFL and is the most popular sporting site in Australia attracting 1.5 million page impressions a week. It is so much a creature of News Ltd that Fairfax has been forced to set up its own Aussie Rules site called Real Football.com.au to compete with the official Murdoch Monster. (Where are you Graeme Samuel?)

But Stuart Simson and David Aspinall can not possibly compete with Ted Pretty’s telstra.com mega Internet monster that has a market capitalisation of $100 billion and a firm desire to get its content-empty footprint on the short-and-curlies of WAP-Internet AFL updates via the very user-friendly mobile. (Where are you Graeme Samuel?)

Bob Gottliebsen asked Wayne Jackson about all this AFL Internet business the other day on Simson’s BusinessDaily.com.au: ” I think in time, Robert, they will be a huge plus to our capacity to broadcast the game. The interest factor for the fan, where there will be cameras locked onto individual players, where you’ll be able to see the actual field of play as well as what the action is from a particular spot, I think that’s, as you know, some years off yet but that process seems to be starting and I think, in the long term, will be excellent for the game.

“GOTTLIEBSEN: Will it make it hard to get attendances at games?

“JACKSON: It will if those broadcasts are live and directly against the gate. At the present time most of our AFL footy is on delay, about 50 minutes from when the game’s actually played, although we are playing live against the gate for 33 matches on pay television this year and we have got some of our free-to-air stations going live against the gate as well. We haven’t yet had any evidence that live against the gate impacts negatively on the crowds and you could argue, Robert, in developing states it may actually help the game rather than hinder it. But it’s something we are very sensitive to,” he said. (Where are you Graeme Samuel?)