To siphon or not to siphon? Has the fragmentation of the broadcasting market made the list redundant?

Co-authored by Sophie Timms

The launch of pay television during the 1990s created high levels of political concern that the general public of Australia would no longer be able to access major sporting events on free-to-air television. It was thought that the pay television operators would have greater resources to “siphon” events like the Australian Football League (AFL) Grand Final, the Melbourne Cup and the Olympics behind a paywall.

The evolution of the sport broadcasting landscape over the past 30 years suggests that the anti-siphoning list is no longer the most effective method of ensuring Australia has free access to major sporting events.

Of particular significance is:

1. Following the fragmentation of the broadcasting market it would appear that the anti-siphoning list restricts competition with its original intended purpose now less relevant.
2. It is for this reason that other measures should be implemented to ensure that Australians can access the level and variety of sports to meet consumer satisfaction, including societal benefits through greater exposure to women’s and Paralympic sport.
3. Many sport fans have moved to pay television or streaming services due to the freedom of choice, increased content and the lack of advertising.

The Rationale for Legislation

The anti-siphoning list (the list) was established under the Broadcasting Services Act 1992 (Cth) aimed at ensuring specified sporting events remained accessible free of charge. Even though the list was seen as a “free kick” to the free-to-air networks, public outcry followed due to the decision by two television networks not to televise sessions of the Australian men’s cricket tours of England and South Africa respectively.

Subsequently amendments were introduced to incentivise “free-to-air broadcasters to only acquire live rights to a designated event or events in a series they can actually use”.¹ If a network decided not to televise a substantial portion of a listed event, the unused portion of the rights was required to be offered to the two national broadcasters (ABC or SBS) for a nominal fee. Only after the free-to-air options had been exhausted, could the broadcast rights be made available to pay television providers.

Is the List anti-competitive?

The Productivity Commission (Commission) undertook a review of the list in 2000 and concluded that it was exclusionary and anti-competitive. The Commission reasoned that the list disadvantaged sporting organisations by decreasing their negotiating power in selling the broadcast rights of their products. The benefits of the list did not outweigh the cost imposed on broadcasters, sporting organisations or the general public. Despite the Commission’s finding, the list became a political tool with the opposition suggesting “Australians would know who to blame if they were unable to watch their favourite sport on television”.

Technology Innovation

The introduction of multi channels and streaming services has seen the sport broadcasting landscape evolve significantly over the past 20 years. Communications Minister Paul Fletcher recently delayed the expiry of the list by two years, meaning the current list will continue until at least April 2023. However, this extension does not extinguish a potential legislative loophole that can allow a streaming service such as Kayo or Stan Sports (as opposed to a pay television provider such as Foxtel) to legally “siphon” listed events behind a paywall. The exclusionary nature of the list combined with the fragmentation of the media landscape suggests that the list is no longer an effective legislative tool to ensure Australians have free access to major sporting events.

An opportunity for reform?

The technological developments since the establishment of the list has meant there is greater capability to broadcast a variety of sports to the general public. As part of the current broader media reform, it is suggested that the list be abolished in favour of a minimum content requirement. The proliferation of channels has meant that the free-to-air networks have greater flexibility and are less likely to withhold events. In addition, the Australian public’s appetite for sport has ensured these events retain or improve their commercial value.

The introduction of minimum quotas for rights holders of sporting events would likely increase the variety and frequency of sports televised free of charge to the Australian public, because rights holders would be required to a minimum number of televised hours. The numerous streaming services such as Kayo and Stan could be legislated to provide a portion of their sporting content free to non-subscribers. By potentially excluding the elite competitions of some of Australia’s major professional sports (AFL, National Rugby League, Cricket) greater exposure could be provided to Olympic and Commonwealth sports which compete for attention outside the pinnacle competition every four years. Critically, this would provide greater visibility of women’s and para sports which have traditionally struggled to be seen on the major networks.

Conclusion

Providing the Australian public free access to sport on television is important due to the role it plays in the national identity and culture, but arguably the anti-siphoning list is an analogue solution for a digital world. Sporting organisations should not be constrained so they can achieve a fair market value for their products to ensure sufficient funds can be reinvested into the development of the sport. Broadcasters should be encouraged to televise a wide variety of sports, not just those considered professional. It is understood that the anti-siphoning list will be reviewed as part of broader media reform, therefore sports rights holders and sporting organisations should consider seeking advice to reshape this aspect of the law.

1. Regulatory Impact Statement, Explanatory Memorandum, p. 10, cited in ABA, Investigation into the implementation of the anti-hoarding rules.