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Seven fires Cricket Australia warning, views Tokyo 2020 chances as ’50/50′

James Warburton, chief executive of Seven West Media, owner of the Australian commercial broadcaster Seven Network, has called on Cricket Australia to provide more clarity on its plans for the summer season as the media company contemplates rights fee reduction talks with the national governing body.

Speaking today (Tuesday) following the release of Seven’s financial results for the year ending June 27, Warburton has called for Cricket Australia to follow the lead of the AFL Australian rules football league, which revised its contract with the broadcaster after its 2020 Premiership season was suspended due to the Covid-19 pandemic.

He warned that Seven could “telecast grade cricket for free” if the situation was not resolved.

Seven and pay-television broadcaster Fox Sports hold a six-year domestic rights deal with Cricket Australia running from 2018-19 to 2023-24 and worth a total of A$1.18bn (€715m/$846m).

Warburton suggested that the “massive” fee Seven pays for the rights warrants more clarity on the playing schedule from Cricket Australia and has admitted that the situation has been “frustrating” for the broadcaster.

When asked by The Age and the Sydney Morning Herald whether Seven’s agreement with Cricket Australia would be revised amid the uncertainty, Warburton replied: “Ultimately …they need to look at what is possible to deliver, stop talking about international borders being closed, or borders being closed, and start to look at what really is the season we are going to deliver.

“Like we have done with the AFL, our obligation then is to really deliver something for the fans and the players and to put our best foot forward for all of our commercial partners as well. But, at the moment, you pick up the paper every day and you read four or five different things.

“You have got the Australian T20 and one-day captain saying one thing, you have got the coach saying another, you have got BBL franchises talking about no international players – or [having more] grade cricketers. We could send the cameras down for free to telecast grade cricket.”

Cricket Australia has confirmed provisional dates for this year’s Big Bash League and Women’s Big Bash League Twenty20 competitions, although the schedules are yet to be set in stone. Uncertainty also surrounds Australia’s planned Test match against Afghanistan in November, with the schedule for Australia’s series against India also unconfirmed.

Cricket Australia interim chief executive Nick Hockley admitted to The Age and the Herald that scheduling events in the current climate has been difficult and said that he would look to meet with Warburton to discuss their respective plans.

He said: “We will be announcing revisions to our schedules once we have all necessary government exemptions and biosecurity measures in place.”

Tokyo 2020 chances ‘50-50 at best’

Seven also holds rights to the Tokyo Olympics, which have been rescheduled for next summer due to Covid-19.

Warburton admitted it is still unclear whether the Games will go ahead next year, although Seven has been encouraged after the majority of its Olympic sponsors and advertisers stayed on board following the postponement.

He said: “Ten of the 12 sponsors have gone straight into next year’s Olympics.

“From that perspective, clients have been lining up. It’s part of our DNA but it’s a A$50m refund if it doesn’t happen and at best it’s 50/50 at this point.”

Seven acquired rights for the Olympics in 2014 as part of a deal spanning three editions of the Games, from 2016 to 2020. That agreement is thought to be worth just under A$200m and was signed in 2014 when rivals Nine and Ten failed to offer much competition.

The International Olympic Committee had prioritised a new broadcast rights deal in Australia before coronavirus crisis struck.

Seven West Media’s full-year financials have been significantly impacted by Covid-19, with group revenue from continuing operations down 14 per cent due to weaker advertising markets.

The net loss after tax was A$162.1m (including discontinued operations).

On the cost saving initiatives undertaken, Warburton said: “We have actioned A$170m of gross cost out initiatives across the group including the renegotiation of our AFL agreement at a lower level and for an extended term. In addition, we benefited from an incremental A$51 million of temporary savings to respond to the sudden impact of Covid-19.

“Net cost savings in the financial year were weighted to the second half with A$92m saved in the period, more than offsetting the $15m increase in the first half. To support our goal of working down debt to improve balance sheet flexibility, we have realised A$150m of gross proceeds from asset sales and amended our debt facilities to secure flexibility, liquidity and certainty to execute our transformation strategy.”

Underling group Ebit (earnings before interest and taxes) stood at A$98.7m, down 54 per cent year-on-year.