Channel Seven is facing the prospect of being taken to court by Cricket Australia for breaching its contract with the governing body, having lodged documents seeking independent assessment of its deal with the Australian Chamber for International and Commercial Arbitration (ACICA) on Tuesday.
Last week the broadcaster paid the remaining A$10 million it owed CA of the latest instalment as part of the A$1.18 billion broadcast deal signed alongside Foxtel in April 2018, backing down from an earlier threat to pay only A$15 million for the entire season of men’s and women’s internationals and BBL fixtures. Under the terms of its contract, Seven is required to pay A$75 million a season in three instalments of A$25 million, plus A$7 million in free advertising or “contra” for CA.
Nevertheless the refusal to pay, despite a clear ability to do so, was a breach of terms between Seven and CA, after the network had spent most of the year agitating both in private and public for a major discount to its A$450 million contract to be the game’s free-to-air partner in Australia.
Seven’s chief executive, James Warburton, has been a loud critic of CA since he reported on the organisation’s financial results for 2019-20 in August, and has pushed for an independent assessment of broadcast rights value ever since – a process CA has denied it must take part in.
Officially, CA has acknowledged receipt of Seven’s intention to go to the ACICA, but the governing body chaired by Earl Eddings is reserving all rights to take the dispute to the Supreme Court of Victoria. Such an eventuality would be ugly, but there is now little respect between CA and Warburton in particular.
The unseemly spectacle of Warburton publicly disparaging cricket, at a time when Seven’s financial reports had stated that the return of live sport would be part of helping the network’s recovery, has been observed by the Seven West Media board, chaired by the multibillionaire Kerry Stokes and also featuring the former Essendon chairman David Evans, who has served as the chair of CA’s own investment committee.
Stokes and his son Ryan had been in the room alongside Worner when they agreed to the deal with CA a little more than 30 months ago, premised upon major event ratings expected to be reaped from the BBL in addition to Australia’s annual home Tests. Foxtel gained exclusive coverage of the men’s ODI and T20I teams, in addition to every ball of matches simulcast with Seven, while also winning digital rights to be utilised through its Kayo streaming service.
At the time, Seven’s and Foxtel’s bid outstripped the incumbents Nine and Ten, which had been the longtime broadcaster of international cricket and the contemporary populariser of the BBL respectively. Ten, in particular, had offered more than A$900 million for the exclusive rights to all cricket before revising its bid to be the free-to-air partner alongside Foxtel for A$80 million per season, only to see its offer beaten by Seven for only an extra A$2 million a year.
Since that time, the BBL has failed to deliver the sorts of audiences Seven had thought it might gain despite a bloated schedule of 14 games per team plus finals, with the amount of games compounding difficulties of scheduling and player availability. These have applied equally to prominent members of the Australia side such as David Warner and Mitchell Starc, and high profile overseas players who have preferred to play fewer games for more money in other domestic T20 leagues.
Dissatisfied with broadcast audiences for the BBL despite steady improvement in television ratings for internationals even in a comparatively weak 2019-2020 summer schedule featuring Pakistan and New Zealand, Seven asked CA for a discount of around 40% of its fees as far back as March, just as the Covid-19 pandemic began to bite. Private talks went steadily downhill over the next few months, either side of Kevin Roberts’ removal as CA’s chief executive in June, before Warburton went public with his complaints in August.
In a parallel process, CA is close to reaching terms for a revised deal with Foxtel, which was due to deliver around A$750 million of the overall deal over the same six-year period as Seven.
“Cricket Australia this morning received a letter from Seven and is awaiting a response from ACICA,” a CA spokesman said. “CA looks forward to working with all its valued partners to deliver a safe and successful summer of women’s and men’s international and domestic cricket.”