Friday, December 22, 2006

AFL rights a joke

Australian pay TV provider Foxtel appears to have lost any opportunity to screen Australian Football League (AFL) matches. It had been in negotiations with the rights holders for the seasons to 2011, free-to-air networks Seven and Ten, and recently sweetened its offer. However, Seven insisted on a payment of $A60m annually, and is now in talks with public broadcaster SBS about offloading Friday night matches to it.

Meanwhile a toss of a coin decided which TV network would broadcast the 2007 Australian Football League (AFL) Grand Final. At a TV executives' meeting on 20 December 2006, Seven Network executive, David Leckie, tossed a coin with the Ten Network's GM of Sport. Leckie lost and the Ten Network will broadcast the highly-lucrative event. This came at a time when the screening of AFL matches was being finalised between rights holders Ten and Seven, and public broadcaster SBS.

How can any company make deals that rely on a toss of the coin. It shows that both companies have no idea about how to construct deals and make the most for their shareholders. Once again the public has been screwed when it comes to watching sports events as Seven Network Limited and Ten Network holdings Limited and SBS will not show every game. I don't know how they can turn down $50 million from Foxtel and then go and toss a coin for the most lucrative part of the contract with Ten.

The directors at Ten and Seven need to have a good hard think about how they are running the business. This once again adds another long term negative to both stocks. Along with High PE atios, ludicrous Price to book ratios and a poor long term outlook I can now add poor management from the directors.

Well that's my thoughts on the subject

Good Luck investing.

No comments: