Seven's tennis deal relegates Ten to the minors

It appears the final siren has sounded on the marquee sporting rights negotiations in Australia, with reports indicating Seven has been successful in winning the broadcast rights to Australia’s major golf and tennis events.

If reports are correct, the board of Tennis Australia has reportedly decided to not take their broadcast rights to market, instead deciding to renew with the incumbent Seven Network for a reported $40m per year over a five year term. This has surprised many media observers who have questioned what the group had to lose from conducting a public tender process.

The amount reported to have been paid is a significant premium on the previous deal, which was worth $21 million per annum to Tennis Australia, but the fact Tennis Australia didn’t choose to test the worth of the rights in a pitch scenario is perplexing. Despite the 90 per cent price rise, Seven West Media would be very happy with their purchase. Not only does it give Seven rights over key codes such as AFL, V8, Golf and Tennis, but it ensures Seven keeps its yearly consumer marketing backbone and launchpad for its first half programming. Not only does tennis provide Seven with a strong commercial asset to sell advertising around, it also provides them with significant audience volume that it can market its key programming to immediately before the start of the ratings year. The tennis is a potent consumer marketing asset Seven has a monopoly on, which it has used to dominate the first half of the ratings year for the better part of the last decade.

The uniqueness of the summer tennis and its multi-faceted benefits for the host broadcaster was considered by many to mean that it would set off fierce bidding if taken to market and would command a significant price. On top of this you had Network Ten, armed with a new CEO and a wider audience target, publicly stating they wanted to aggressively bid on sporting rights. Reports were that there were a minimum of three companies jostling for the tennis — Seven, Ten and sports management company IMG — with estimates that the price could exceed $50 million per year given the strategic value of the sport to TV networks facing an increasingly competitive market.

“It would be scandalous if Tennis Australia sold its television rights without conducting an open tender” said a Ten spokesperson to Business Spectator. “Victorian taxpayers have pumped hundreds of millions of dollars into facilities used by Tennis Australia. Taxpayers have the right to expect Tennis Australia to conduct an open, transparent negotiation process, particularly given the record prices the AFL, NRL and Cricket Australia have secured for their television rights recently.”

Ten raise a valid question — why in such a highly competitive market with such motivated buyers did Tennis Australia feel it was strategically a sounder option to not proceed with a tender?

Not being able to at the very least bid on the tennis rights leaves Ten with the domestic Big Bash league as its springboard for its start of ratings year programming. The Big Bash is a somewhat unknown proposition on free to air TV, but it’s safe to say that it will struggle to reach the same audience in scale that the tennis has reliably generated for the past four decades for Seven. However, despite this and the fact all major codes are now tied up, Ten is still bullish about its sport led strategic rejuvenation.

“We have recently secured the rights to the Twenty20 Big Bash competition and the Winter Olympics in Sochi, Russia. Both are premium events and we are finalising our coverage plans,” said the Ten spokesperson.

When asked what impact the Tennis Australia deal and lack of other available sporting rights meant for the network moving forward the spokesperson stated “we are not going to telegraph our plans publicly.”