To put it mildly, Foxtel isn’t happy and Austar is nervy: how long before their nerve breaks and they sue for peace?

Certainly Austar wants to settle with Seven and Ten for 2007 and beyond because it had all sorts of problems without the AFL. Foxtel says it can battle on and doesn’t need the AFL as a subscription driver.

But Fox Sports does and that’s where the real power still lies in pay TV in this country: at Premier Media where the worlds of News Corp and PBL collide. Foxtel strongly rejects claims (by me) that James Packer and PBL are playing hardball and vetoing any increase in its bid. $45 million is the offer and remains the offer according to Foxtel CEO, Kim Williams.

What no one can or will explain is why an extra $10 million can’t be tipped in by Fox Sports or another party if Foxtel finds it too embarrassing (and a big loss of face) to up the ante. Seven is busy dealing Foxtel and Fox Sports out of the picture by negotiation with SBS to take the coverage in Sydney and Queensland.

There are some complications: SBS can’t split its signal in Queensland between metro and regional areas, but it can in NSW so Sydney will see the AFL on SBS Friday nights and on Prime in regional areas (and Austar if it hurries to do a deal).

And there will be no use for Foxtel and others in the Pay TV arena to moan about anti-siphoning rules so far as the AFL is concerned. Foxtel has had a chance to deal and failed to meet the market price: it wants the market to rule and it has. It is well within Seven and Ten’s right to play hardball: after all the Murdoch and Packer camps do it all the time, so why, as Foxtel’s Kim Williams argues, should Seven and Ten accept a lower price?