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Seven and Foxtel won't pay full rights fee to Cricket Australia as broadcast dispute escalates

The move pushes the situation further towards a possible court room

Daniel Brettig
Daniel Brettig
Channel Seven and Foxtel will not pay their full broadcast rights instalment of A$55 million to Cricket Australia for September, with the free-to-air network going as far as to suggest its partial payment of the A$25 million it owed would be its one and only fee handed over for the entire summer.
In an incendiary move at the end of a winter in which the networks have consistently harried CA for a rights discount in the time of coronavirus - without necessarily having a clear contractual basis on which to do so - Seven and Foxtel have effectively challenged the governing body to pursue legal options to recoup its agreed fees, or come to the negotiating table.
CA, which has been awaiting the networks' choice of action on the due date for its next rights instalment, has stood by the soundness of its legal position. This is based on the contention that there is no discount required besides those increments already inked into the A$1.18 billion rights deals settled with Seven and Foxtel in 2018 in the event of any reduction in content.
Those clauses have already applied to Fox Sports, given the postponement of scheduled white-ball matches against New Zealand, Zimbabwe and the West Indies this year, while the domestic limited-overs tournament and the annual Prime Minister's XI game are all more or less guaranteed to be missing from the fixture this season.
However, Seven's deal to cover Test matches and the majority of the BBL and WBBL have yet to be cut back, meaning the failure to pay the full instalment on Tuesday may be interpreted as a contractual breach. The network's outspoken chief executive, James Warburton, delivered a statement on Tuesday claiming that this was not the case, due to Seven's notice last week that it sought to enter into a dispute resolution process with CA over an independent assessment of the rights value.
"Putting aside the questions of breach, in accordance with the contract Seven has invoked the right to appoint an independent expert to determine the fair value of the media rights against the expected schedule for the season compared to the originally published schedule," Warburton said. "Seven has paid the first instalment reflecting our fair value."
CA's interim chief executive, Nick Hockley, did not directly address the issue of rights fees in his response to Seven, and simply maintained the governing body's stance that it would deliver the season of international and domestic cricket it had been contracted to.
"We are more confident than ever about staging a successful BBL, which is by far and away the most watched sporting league in Australia on a per-match basis," Hockley said. "Clubs have embarked on ambitious recruitment drives, both in Australia and around the world, which will be complemented by exciting innovations to playing conditions to be announced shortly. The BBL brings millions of Australian families together through the school holidays and, after such a tough winter, will be more important than ever this year.
"Scheduling during a pandemic is challenging, however despite these challenges we have been the first sport to bring an international representative team into Australia and we greatly appreciate the support of governments and overseas cricket boards to make this happen. Countless people are working together to ensure this summer is a huge success, including the players through the Australian Cricketers' Association, the State and Territory Associations, governments, sponsors and broadcast partners.
"Together we are confident of delivering a compelling summer schedule that will meet our commitments to our broadcast partners and the high expectations of our fans."
The summer schedule commences with a limited-overs series between the Australian and New Zealand women's teams in Brisbane in a little less than two weeks' time, but further schedule details are yet to be announced, pending government approvals.
"The 2020-21 season is shaping up as a massive summer of cricket," Hockley said. "The Australian men's team achieved No. 1 ranking in Tests and T20Is over the past 12 months and will go head-to-head with India, the world's largest cricketing nation and a formidable opponent on the field. It is one of the great sporting rivalries and this summer's series across all formats is already generating enormous interest.
"Our Aussie women were recently voted Australia's most popular sporting team, male or female, which is testament to longstanding success, including the recent and unforgettable T20 World Cup triumph in March. We can't wait to launch the summer with their six-match series against great rivals, New Zealand, in a little over a week's time. Interest will then carry over to the WBBL and build upon last season's first-ever standalone tournament."
Away from Warburton's fiery rhetoric at the behest of Seven West Media's billionaire chairman Kerry Stokes, the network's financial reporting at the end of August suggested that it wanted to engineer a major discount from its A$450 million, six-year deal with CA. At the same time its directors' report indicated that in an improving landscape after the shock of Covid-19 earlier this year, the return of major sport would aid in Seven's recovery.
"While market conditions in the final quarter were significantly down on the prior year, the market conditions have been less severe than forecast," the report stated in its "cashflow" section. "This is also evident into the first months of FY21, supported by the resumption of major sports and the lifting of COVID-19 trading restrictions in many States earlier than originally anticipated."
Stokes also hinted strongly at seeking a rights re-negotiation with CA in his chairman's address to kick-off the annual report. "The team has successfully re-negotiated our rights contracts in AFL and horse racing, with other sports and programming contracts identified for new deals," Stokes said. "On the back of the new night time programming schedule and the continuing strength of our sport, news and public affairs content, we believe Seven is now in a long-term winning position and is best placed to be the first and strongest to recover from the current difficulties."
As fellow West Australians, Stokes and the Australian team coach Justin Langer have crossed paths more than once over the years - to the point that both were awarded the Order of Australia on the same day in 2009. Langer's response to the latest development got to the heart of the issue, if not the balance sheet.
"What I do know, is when the summer comes, we're going to put on some great, exciting cricket," Langer said. "People being able to watch cricket on the TV, it's part of being Australian, isn't it?"

Daniel Brettig is an assistant editor at ESPNcricinfo. @danbrettig