Australia’s biggest media companies appeared in court on Monday for allegedly conspiring to deprive a rival commercial television network of lucrative sports broadcasting rights.
The Seven Network, owned by media mogul Kerry Stokes, is seeking Aus$1-billion in damages from the country’s biggest media and telecommunications groups over the loss of football rights.
The Federal Court case pits Seven against 22 companies, including Rupert Murdoch’s News, telecom giant Telstra and Publishing and Broadcasting, owned by Australia’s richest man, Kerry Packer.
Seven claims the rival moguls colluded and conspired in 1999 and 2000 to prevent its pay-TV sports channel, C7, from securing the rights to broadcast the country’s main football competitions — the National Rugby League and the Australian Football League.
The loss of the broadcasting rights left C7 without a winter sports schedule and the channel eventually went out of business in 2002.
Respondents in the case, which is expected to last at least six months, also include the Australian Football League, the National Rugby League and rival commercial channels Network Ten and Nine Network.
Seven, the country’s second largest television network, alleges that News Corp conspired with Telstra and PBL to make a predatory bid for the rights to broadcast the Australian Football League on their jointly-owned pay-TV network Foxtel.
Jonathan Sumption, counsel for Seven, said the bid Foxtel made for the rights, held by Seven for the previous four decades, was not a market price.
”It was, as we shall submit, an offer which made economic sense only on the footing that in the longer term, Fox Sports would benefit from the removal of competition in the market in which it operated and that Foxtel would derive an indirect benefit from the same thing,” he said.
The Australian arm of News Corp, News Ltd, which also has interests in the National Rugby League, also used the clout of its 25% share in Foxtel to prevent its subscribers from receiving C7, Sumption said.
”Seven’s case is that in 1999 and 2000, News saw an opportunity to put C7 out of business, thereby leaving Fox Sports and Foxtel as the monopoly suppliers of Australian sports programming,” he told Sydney’s Federal Court.
The case will also look at Seven’s failure to get access to the Foxtel pay-TV platform and its contract with telecom company Optus extended.
All the respondents have denied the claims with Foxtel on Monday saying they were the ”unfounded allegations of a serial litigant.”
The outcome of the legal action could have major ramifications for the country’s media industry, with Seven pushing for structural change to encourage competition in the sector.
It is also a gamble for Stokes because of the cost of the action. Seven has already paid $27-million towards court costs in the past financial year, with expectations of them reaching $100-million this year.
Meanwhile, the network’s net profit for the year to June fell marginally this year to $93,1-million. – AFP
