How Seven’s shotgun marriage to Cricket Australia turned to divorce proceedings
Welcome to Unmade, written while you were sleeping. Pinch, punch, first of the month.
Our paying members received this email a couple of hours before everyone else.
Officially, our end of financial year sale is over. However, I must have messed up the time differences when I set the expiry date for the offer. At the moment of sending this, the offer still has about 11 hours left to run.
If you subscribe right now, you can lock in the 55% discount on our full year subscription price of $650, taking it down to $292.50. And as long as you remain a subscriber, you’ll always get that discount.
As well as early access to our emails, Unmade’s paying members also go behind the paywall of our weekly in-depth Tuesdata analysis offering exclusive data unavailable anywhere else. Plus you get reduced or free price on tickets to Unmade’s future events.
After that offer expires in a few hours, it will never be as cheap again .
These are strange, strange times in television sports rights.
Yesterday afternoon, Seven West Media revealed that it had launched Federal Court proceedings against Cricket Australia. Within 90 minutes of the ASX announcement, The Sydney Morning Herald had published details of the statement of claim.
Seven argues that the Big Bash League, the 20-over domestic form of the game, is substandard, and that it has not been getting what it paid for. Although it has only now hit the public domain with the filing of the claim, it would appear this is a legal action that has been in the offing for a while. Via a court-imposed legal discovery process, Seven was able to obtain internal Cricket Australia emails some months ago.
But before we come on to all that, it’s worth recapping the context of Seven’s tempestuous shotgun marriage to the cricket code.
I told the story in my book Media Unmade, and you can hear the audio version of the relevant chapter here:
For years there was a natural order. Nine aired the cricket and NRL, Seven had the tennis and AFL, and Foxtel and Ten got the leftovers.
That order changed just over five years ago, at lunchtime on March 29, 2018. To shock inside Seven’s Jones Bay Wharf headquarters, an announcement unexpectedly dropped onto the ASX. Nine has stolen the tennis rights from under Seven’s nose for $60m per year.
Back then, different people were in charge.
Nine’s then boss Hugh Marks and his team had concluded that they could save $50m a year in production costs by switching horses from cricket to tennis. Although cricket provides many more hours of content, it also costs a lot more to produce, and sponsor dollars don’t cover the difference.
The bombshell left Seven West Media boss Tim Worner (who was to leave the following year) with no choice. Seven desperately needed a summer sport, so it had to grab the cricket at all costs.
Being beaten in the short term means immediate ratings pain for a TV network’s CEO of the day. Overpaying is a problem that can be left for the successor.
Meanwhile, Ten had been through nearly a decade of bad winter ratings since the then proprietor Lachlan Murdoch let slip its two weekly AFL games back in 2011 when Seven grabbed all the free to air rights. Big Bash, bought by one of Murdoch’s successors Hamish McLennan, had been a summer saving grace for Ten.
Nine, with the luxury of already having tennis in its back pocket, teamed up to bid alongside Ten for the cricket. If they won, Nine would get the international long form test cricket and Ten would get the rest.
Nine was only willing to put up $50m per year. Ten would have to put up the rest to get Big Bash and international one-day cricket. Ten’s initial offer was relatively low, another $70m.
Meanwhile, Seven teamed up with Foxtel.
Egos played a part. Yet another key player who has since departed was the then chairman of Cricket Australia David Peever. He angrily emailed the US-based owner of Ten, CBS, complaining Ten were “bottom feeders” with the lowball offer. His email was leaked to the SMH.
Nonetheless, it seemed everyone was all friends again when Ten topped up its offer, all the way to $145m per year, with Nine’s contribution taking the total bid to $195m.
Ten’s then CEO Paul Anderson shook hands on what he thought was a done deal. But a few hours later, a desperate Seven lobbed in a final bid of $82m per year, with Foxtel throwing in $115m, taking their bid to $197m.
Peever, apparently seething at the leaking of his email, was content to take the higher bid despite the handshake.
Since then, Hugh Marks was replaced at Nine by Mike Sneesby, and Tim Worner was replaced at Seven by James Warburton. Ten’s commercial side is now run by Jarrod Villani.
And Peever was ousted from Cricket Australia, which has been through three more chairmen since.
That means a lot of people close to the action who don’t feel any ownership for the existing deal.
And then came Covid, which blew things up even more.
Warburton began to make noises publicly about his unhappiness with the cricket product he was getting. It was “a train wreck”, he reportedly complained in 2020, with Big Bash lacking quality overseas players.
At the time, it seemed a risky strategy to be so publicly critical – talking down the product of a game his network was airing would not help his sales team’s sponsorship efforts. It also looked like a possible negotiation ploy to get a discount – Seven’s debt level was dangerous at the time.
But it seems he meant it. Seven is now seeking to get legal blessing to rip up the last year-and-a-bit of the contract, and get some money back too.
Again it seems like a risky strategy. How will other current and potential sporting code partners view a willingness to go legal? Could it be them next? Like they say, the best predictor of future behaviour is past behaviour.
But Seven’s concerns increasingly seem well founded. The emails Seven has uncovered do seem to suggest some of those inside Cricket Australia shared his concerns about the quality of Big Bash thanks to the international conflicts.
Already Seven has signalled that it would rather take back the tennis in the next rights round. Not that Nine will give it up easily. Thanks to being able to monetise the tennis on Stan too, I’m sure Sneesby will be willing to pay much more than the current $60m per year.
Which may yet leave Seven and cricket involved in an awkward second reconciliation, shortly after a court mandated divorce.
They should put this stuff on TV.
Time to let you go about your Friday. I’ll be back with Best of the Week tomorrow, including a look back on the performance of all our ASX-listed media and marketing companies in the financial year just ended.
Have a great day.
Toodlepip…
Tim Burrowes
letters@unmade
