Sport is Murdoch's 'battering ram' for pay TV

Sports politics

Robert Milliken
Tuesday 15 October 1996 23:02 BST

Rupert Murdoch yesterday signalled his plan to take an even more aggressive approach towards buying television rights for leading sports when he announced that he intended to use sport as a "battering ram" for the expansion of his global pay television network.

He told the annual meeting in Adelaide of News Corporation, of which he is chairman and chief executive: "Sport absolutely overpowers film and everything else in the entertainment genre...

"Football, of all sports, is number one. Look at what we have done in Britain with our Premier League soccer, and now with the rugby union and rugby league in the United Kingdom as well. We expect the next three World Cups will have a significant place on our platforms. Sport will remain very important and we will be investing in and acquiring long-term rights."

Murdoch was speaking with the assurance of someone whose risk-taking has proved that sports, along with big Hollywood movies, are the two biggest money spinners underwriting his pay television ventures. In Britain, his acquisition of Premier League has been crucial in turning BSkyB into one of News Corporation's most booming businesses (a fact underlined when BSkyB shares rose 18p to 676.5p yesterday, increasing its stock market value pounds 309m to pounds 11.64bn).

In the United States, he has a lucrative contract with the National Football League, showing many of the best American football games on Fox Television, his free-to-air network. "Fox has been very much involved, or will be involved in the next week, in the finals of the World Baseball Series, for which we expect great ratings," he said yesterday.

Murdoch also made it clear that he would be using sport as a bridgehead to launch American Sky Broadcasting, his new pay television venture in the United States in partnership with MCI Communications, the giant telecommunications company. American Sky will have more than 200 channels and will be launched late next year.

The Murdoch obsession with sport extends to Asia as well, where his Star satellite network stretches from China to India. "[There is] one development which is very pleasing is our sports programming in India, which was beginning to get very expensive," Murdoch said. "We have now formed a partnership with our former sports programming competitor, ESPN of the United States.

"We have the long-term rights in most countries to major sporting events and we will be doing in Asia what we intend to do elsewhere in the world, that is, use sports as a 'battering ram' and a lead offering in all our pay television operations."

It was in Australia where Murdoch's battering ram almost ended as a pile of splinters in his launch of Foxtel, his pay television venture there which News Corporation runs in partnership with Telstra, the state-owned telecommunications company. Absolutely crucial to Foxtel's success was Murdoch's attempt to wrench control of rugby league, one of the most popular sports in Australia, from the game's established authorities and form his own Super League of international competition with Britain and New Zealand.

Spearheaded by Lachlan Murdoch, his son and apparent heir, and Ken Cowley, his most trusted Australian lieutenant, Murdoch's organisation poured more than A$300m (pounds 150m) into launching Super League, only to see it crushed by a Federal Court ruling last year that banned Super League from starting before the end of the decade.

The legal challenge came from the Australian Rugby League, the official body, supported by Optus Vision, Foxtel's rival cable TV company that had exclusive pay TV rights to rugby league. Kerry Packer, Murdoch's rival, is a partner in Optus Vision. The ruling would have left Foxtel with no leading winter sport, and its future in doubt.

Ten days ago, an appeal court delivered a stunning victory to Mr Murdoch when it overturned the earlier decision, ruled that "loyalty agreements" between players and the Australian Rugby League were null and void and allowed Super League to start from next year.

Although the official game plans a further appeal to the High Court, Murdoch is now in a perfect position to call the shots over the future of rugby league. No one seriously believes that Australia can sustain two rival competitions and a merger, on Murdoch's terms, seems on the cards.

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