Big money on ball games gives public broadcasters a sporting chance

Our household has just subscribed to the wonderful BBC iPlayer app.

The event has led me to suggest a plan for the ABC when it inevitably has to respond to the politically biased cuts in funding that loom in the May budget.

The BBC initially put its iPlayer app out in Britain. With it you could play several thousand BBC programs. With the help of an Apple TV player (or equivalent) you can play the programs on your TV, in high definition if you want.

Then last year the BBC put it out in a dozen English-speaking countries, including Australia. It hit a minor snag in that in only had British rights for most of it co-productions. Its solution was to make overseas viewers pay to meet the extra copyright needed.

And what is the subscription – a princely $9.49 a month. How can this be? We also subscribe to Foxtel, though that is about to change. Foxtel is a minimum $50, but most people pay $100 or more because you have to buy various packages if you want to watch anything worth watching.

Why is Foxtel so expensive, I thought? A lot of it would be just getting some Australian rights for overseas-produced stuff.

Then the penny (well, the dollar) dropped. In April 2011, Foxtel announced it had signed a $1.25 billion deal over five years with the AFL for rights to broadcast all games 'live'. The players then demanded their 27% cut -- $220 million. And who could blame the players? After all, they are putting on the spectacle at bit like movie stars, though in a far more dangerous environment.

Last year Foxtel and SBS entered a $180 million deal with the Football Federation of Australia to broadcast soccer. There are a myriad of other deals for other sports all contributing to Foxtel's very high monthly fees, such as the $250 million deal with V8 supercars over five years. It goes on and on. Yet the sport add-on for Foxtel is just $25 a month.

Foxtel has about 1.6 million subscribers in Australia. Say a million take the sports add-on. That is $25 million a month or $300 million a year. It barely pays for the AFL alone, presuming some broadcast costs above the $1.25 billion rights over five years.

In short, the non-sport Foxtel subscribers are massively subsidising the sport addicts.

Of course, Foxtel’s aim is to force as many sports addicts to subscription TV as possible. The free-to-air networks are battling to match Foxtel’s financial clout with their increasingly fragmented and static advertising revenue.

So we are thinking of pulling the plug on Foxtel now the BBC comes so cheaply and with such good stuff.

With some other internet-based companies such as Netflix and Apple, there are or will be plenty of ways to get recent movies without Foxtel.

Which now brings me to the ABC and SBS. It could do the app thing and maybe pick up a few subscribers. But a more intelligent approach would be to save heaps of money by withdrawing totally from sport.

Nearly all state and national-level sport in Australia has degenerated to big money-making exercises for administrators and players. There is little of cultural or geographical significance left.

The ABC and SBS could leave the commercial networks and Foxtel to the unseemly bartering for sports rights. After all, the commercial networks and Foxtel – through the Murdoch press and the radio shock jocks -- keep whingeing about unfair competition from public broadcasters. So, at least with sport, why should the public broadcasters bother to compete on sport? Besides it is one thing the commercial broadcasters cannot mess up: all the winners and losers are easy to identify.

The ABC and SBS could use the money for more useful things.

DOT DOT DOT

Last week the Australian Institute of Health and Welfare put out a worrying report on health funding in Australia.

It shows that over the past decade or so the Commonwealth has been increasingly pushing the costs of health on to the states and, worse, individuals. It was Howard Government policy to move as much health spending to the public sector as it could get away with. Labor did not reverse that.

Health is consuming a quarter of state and territory budgets, up from 16 per cent a decade ago. I hate to use the word unsustainable, but it is.

The answer is not the sort of things on the Abbott Government’s agenda – increasing private-sector and individual health spending, with hints of a Medicare co-payment.

For a start, public funding is far more efficient. Administration in the public sector (Medicare and tax collection) costs about 4 per cent, whereas about 12 per cent of the private health funds’ income goes to administration.

Australia spends about 9.5 per cent of GDP on health. The almost totally private US system eats about 16 per cent of US GDP for a much poorer result.

Next, co-payments are dangerous. Health is not like expensive consumer items people can just not buy. The co-payment only has to deter a few people from visiting a GP to obtain early preventative action to make it cost more than it is worth.

Lastly, everyone says the aging population is going to add to health costs massively. Not so. Most over 65s are healthy nearly all the time. The big costs come in the last year or two of life of over 65s to treat the illness that will kill them. And they only die once.

Yes, with the baby boomers there will be more people dying and therefore more costs, but the trend has been exaggerated.

But all the noise from the Abbott Government has been to exaggerate and use the fear of burgeoning health costs to support an ideologically based attack on the public health system, which is precisely the wrong thing to do if you want to meet a considerable though manageable increase in health costs.