AFL rights bid in line with Astro’s global expansion
From biz.thestar.com.my/news/story.asp?file=/...223&sec=business
PETALING JAYA: Malaysian billionaire T. Ananda Krishnan’s bid via Fetch TV for the next round of the Australian Football League (AFL) broadcast rights for 2012-2016 is part of his plans to grow his media assets globally.
Ananda controls Astro All Asia Networks plc, which last November took a major stake in Fetch TV, an Australian pay-TV provider.
According to an analyst with OSK Research, the move to offer quality digital content such as Australia’s national sports programme to capture the Australian audience was consistent with Astro’s strategy to strengthen its presence in new media platforms globally.
Besides Fetch TV, Astro through partner SunDirect Pay-TV has investments in content initiatives in India.
In Hong Kong, through Celestial Pictures, Astro owns the world’s largest Chinese movie library.
Astro also has a joint venture with Saudi Telecom and other partners to create content for IPTV (Internet protocol TV) and other devices and platforms in the Middle East and North Africa.
According to Australian newspaper The Age, Network Ten, which is one of Australia’s three major commercial TV networks, was most likely the front runner to partner Fetch TV in sharing the costs of buying the rights and broadcasting the nine weekly games the AFL will run from the 2012 season.
The AFL is expected to ask for A$1bil (RM3.04bil) for the next five-year TV deal.
Fetch TV would be rivalling media mogul Rupert Murdoch-backed pay-TV Foxtel for the AFL broadcast rights.
Foxtel is 50%-owned by leading telecommunications provider Telstra Corp Ltd, which is partly owned by the Australian government while Murdoch’s News Corp controls 25%.
Fetch TV will reportedly provide pay-TV to Internet service providers and can offer a bundled deal of unmetered pay-TV, fixed-line telephone and broadband Internet for a monthly fee, allowing it to compete more effectively against Telstra, the current holder of the AFL online rights.
According to the OSK Research analyst, although the rights would involve a significant amount, Astro would not have a problem in financing the cost of procuring the rights. “Fetch TV stands a fair chance in obtaining the rights. After all, it is purely a bidding process, which takes place for every sports season,” he noted.
An analyst with another bank-backed brokerage said Fetch TV was a “small deal” in value terms to Astro, so an official announcement was not made last year.
“Therefore, we do not expect this Australian business to impact Astro in a big way,” he said.
The news comes on the heels of the RM2.3bil buyout in a privatisation exercise of Astro.
According to Kenanga Research’s latest report, the privatisation offered minority shareholders the opportunity to exit Astro before the upcoming high capital expenditure (capex) and potential losses to be made by the group in the next few years.
“Astro will spend RM3bil to RM3.5bil in capex over the next four years to expand its domestic and foreign operations,” it said.
Locally, the investment was required for the roll-out of high-definition TV services, as well as improvement of its customer relationship management system.
“Internationally, Astro expects to incur a loss of about RM500mil for its Indian operations (SunDirect Pay-TV) and will be expanding its business in China (Celestial Pictures), Australia (Fetch TV), Middle East and North Africa (the joint venture with Saudi Telecom),” it added.
