The AFL, with its of salary caps and draft restrictions, is one of the most regulated sports in the world. Unfortunately, the Australian media is just as regulated, and the regulations punish clubs, consumers and players.
Protectionism may no longer dominate as an economic ideology, but it lives on in the Australian Government’s approach to the media.
Invariably, from the artificial limitation on the number of television licences, to the banning of advertising on the ABC, to the digital transition debacle, each and every media regulation and reform proposal seems designed to protect incumbent free to air (FTA) broadcasters and penalise their competitors.
Anti-siphoning laws, which give FTA broadcasters first rights over a huge range of premium sporting content, are some of the most egregious examples of this protectionist approach.
FTA broadcasters are granted the privilege by government of not having to compete for broadcast rights in a fair and open market.
Like all protectionist rhetoric, advocates of the current system couch their arguments in the “public interest” and “protecting the consumer” terms. But preventing pay television from bidding for broadcast rights is not without cost.
A modern sporting competition is an extremely expensive affair, and, like any other business, its producers strive to appeal to demanding consumers.
To do so, the sports have evolved, not only in the manner in which they are played, but also through technological innovations that alter the experience for consumers.
Coaches utilise better communications and analysis tools to manage their teams.
Players utilise more powerful – and more expensive – medical advances to prevent injury and enhance performance.
And consumers utilise a variety of print, electronic and broadcast media to access statistics and interactivity to enjoy their game more.
But all this requires money. By restricting pay television from the market for broadcast rights, sporting codes are deprived of a potentially lucrative source of funds.
Competition is intense between the FTA broadcasters, but by banning alternative broadcasters, the final price that broadcast rights are sold at is likely to be lowered.
Anyone that doubts that this is a problem should identify any sporting code or club that wouldn’t be able to use the extra money. Many sports on the anti-siphoning list, like netball and the IndyCar series, do not command the enormous audiences that the big football codes do. Restricting the market for the broadcast of these sports punishes fans – it doesn’t protect them.
With the larger sports, problems are just as evident. The demise of the Fox Footy Channel, a casualty of the lopsided negotiations between FTA, pay television and the AFL, has been a loss for consumers. Die-hard fans are denied the opportunity to enjoy a channel dedicated to the sport to which they are devoted.
If the AFL had been able to negotiate with Foxtel directly, this may have not occurred.
As Justice Ron Sackville, judging a Federal Court case over AFL rights this month, stated: “The poor old AFL is denied the opportunity of a fair and competitive process to get the best price for its product . . .” He continued: “Now, that seems odd.”
Exempt from anti-siphoning restrictions, Football Federation Australia has been able to sign a deal with Foxtel to show all Socceroos, A-League and Asian matches. These rights were sold on mutually agreeable terms, and should help the code establish itself in the mainstream.
The anti-siphoning laws punish consumers and sporting codes, but the larger objection is philosophical, and one shared by the codes themselves.
Those who make a product, own it. The sporting codes should be able to determine to whom and under what condition those rights are sold.
The anti-siphoning laws confiscate the property rights of the producers of sport.
A better approach would be to treat content broadcast on television or radio neutrally. Governments should not be making a determination of the relative importance or merit of certain forms of entertainment. Doing so punishes the very consumers that these laws profess to protect.
The Government’s media reform bills have not tackled with any rigour the Government’s regressive approach to the media. Unfortunately, its penchant for protectionism does not appear to be abating.
Sports are supposed to be competitive, why can’t broadcasting be the same?