Revenge of the Nerds

February 2, 2012 at 6:10 pm Leave a comment

The federal Court’s decision to rule in favour of Optus and its Now technology which allows people to be able to watch games virtually live, albeit through making a personal recording for their own use, rather than having to watch pay TV, is great news for the punter, but bad news for the business of sport, especially Football who were just about to renegotiate their TV rights with Fox Sports.

In fact the CEO of the FFA Ben Buckley made it quite clear his game’s position when he released his strategic plan for the game in November last year. He said “To achieve all the ambitious targets in our strategic plan we need capital to invest. Our next TV rights agreement is the opportunity to secure the financial footings for the game.”

There is no doubt that the court ruling will be appealed, but is it likely to be overturned? A similar case in Europe saw a similar outcome.

Technology has proven that it moves far faster than any law maker, which should be a warning to many. It may also spark a few lawyers to work a little faster for their dollars! If Optus wins again, there will definitely be calls for changes to be made to the law.

The argument against the ruling is that the technology was in this case designed and implemented to bypass the law, with potentially far-reaching financial damaging consequences.

Exclusive rights have been the drawcard to television stations and sponsors alike. The sport that we do not mention was paid $153 million for the internet rights alone by Telstra. If they no longer have that exclusivity the value is going to drop dramatically.

It may be prudent for many sporting clubs in the elite area to have their lawyers look at the contracts that they have with their playing staff. If revenue drops to the television stations, that means the revenue coming back to the clubs is going to drop considerably, and unless they have exemption clauses inserted player wages could well see long time established clubs go broke.

The wages in top level sport in the last twenty years have escalated to ridiculous levels, so much so that very average players are being paid far more than their ability by comparison warrants.

This has, as a result filtered down to the amateur ranks, where again players are expecting to be paid more than they are worth and more than their clubs can afford.

The dawn of professional rugby had a massive impact globally with many traditional clubs having to cut the number of teams they fielded, purely because their first teamers now expected to be paid cash rather than in ale. They simply could no longer afford to run so many sides.

This ruling will have a dramatic effect on the sporting landscape and if not over-ruled we may well have seen the last generation of sports stars on the set-up-for-life salaries.

Many will argue that this is a good thing as it will again filter down to the semi professional ranks, and may in fact save many a club that was teetering on the brink of bankruptcy.

This day had to come at some stage, as someone said today, ‘the geeks have been looking at ways to knockdown the jocks and it looks like their day has finally come.’

Will it be for the best, it could well be. More access to watch sport and salaries brought back to more reasonable levels at all echelons of the game, has to be good for the future. Time will tell.


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