While the first footy game of 2005 might still be weeks away, former AFL commissioner and now chairman of the Australian Competition and Consumer Commission Graeme Samuel recently kicked off the pre-season competition. He suggested that the ACCC was considering regulating the sale of the rights to broadcast AFL games over the internet and via mobile phones.
Samuel’s target is Telstra, which he fears will use its substantial financial resources to buy the exclusive rights to matches.
The problem, according to him, is that customers will prefer the internet and mobile phone products of a company that carries AFL games, compared with a company that doesn’t. And this, according to the ACCC, is anti-competitive.
On this logic the AFL grand final is anti-competitive because only one team can win.
If this is an indication of an ACCC keen to redefine anti-competitive behaviour, then the regulators are going to be very busy cracking down on auction houses, the record companies, film studios – indeed, anything that exclusively sells a unique product.
It’s about time that Samuel and the ACCC narrowed their focus to actual cases of market failure
Leaving aside the question of whether the ACCC has the power to act in such a matter – which arguably it doesn’t – there is the more fundamental question of why Samuel believes it is the role of government to interfere in the sale of broadcast rights to football games.
The AFL should be free to sell its own product to whoever it wants, for whatever price it wants, and under any conditions it determines. For as much as we here in Victoria might like to think otherwise, Australian rules football is not an essential commodity.
The commercial justification for the ACCC’s interference is flimsy to say the least, and if Samuel gets his way the diversity of products available to consumers could actually be reduced.
Telecommunications providers require “content”. The more material they have to broadcast the more willing customers will be to sign up. So to enhance the value of their internet broadband and mobile telephone services, companies provide extra content to subscribers – cheap legal music downloads, video rentals, movie trailers and sports.
The internet enhances the home experience of sport by increasing the content available. By bundling content with their basic internet packages, companies can offer the consumer better value.
Rather than lessening the sport available to Australians, a deal between Telstra and the AFL will provide more.
It’s about time that Samuel and the ACCC narrowed their focus to actual cases of market failure.
Why is he trying to protect us from too much sport?