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Free-to-air TV chiefs have lashed out following an announcement today by Communications Minister Malcolm Turnbull that the government will allow SBS to change its advertising arrangements.Turnbull today outlined details of funding cuts for both the ABC and SBS, with the ABC budget to be cut by $254 million over five years and the SBS budget by $25.2 million.
Announcing the measures, Turnbull stated the government intends to introduce legislation to allow for a “more flexible approach” to SBS’s advertising arrangements which currently stipulate the network can broadcast five minutes of advertising per hour.
Under the government’s proposal, SBS will have to average five minutes per hour across the day, but will be able to run up to 10 minutes of advertising in any given hour.
The existing limit of 120 minutes will be maintained, compared to the 350 minutes per day commercial broadcasters can devote to advertising.
Turnbull stated the two highest television revenue results for SBS since it started to carry advertising in 2003 have been $72.3 million in 2009-10 and $73.4 million in 2013-14, the years in which SBS broadcast the FIFA World Cup.
“Compare this to the 2013-14 advertising revenue earned by commercial broadcasters of $3.9 billion: we are talking about less than 2 per cent of that commercial television advertising pie,” he stated.
Ten Network executive chairman and chief executive officer Hamish McLennan, however, has labelled the move as damaging, stating the government is “creating a fourth free-to-air network by stealth”.
“Today’s announcement that commercial broadcasters will be funding SBS budget cuts is very concerning and a damaging move by a government that says it is pro-business,” McLennan stated.
“This is a bad decision being dumped on the industry – and SBS’s viewers – without any transparency or consultation.
“The government needs to be held accountable and needs to explain itself to viewers, the shareholders who own the free-to-air television networks, Australian television production companies and the tens of thousands of people who will be hurt by this decision.”
Nine Entertainment Co chief executive officer David Gyngell has also criticised the move.
“I don’t understand how [SBS] have their cost problems and they get five minutes more,” Fairfax Media quoted Gyngell as stating.
“It’s hugely hugely damaging to free-to-air television and if they want to do it they should be reducing licence fees.”
Industry body Free TV Australia states independent analysis of the changes shows the “likely increase in SBS revenues will be approximately $200 million over five years, not the $28.5 million claimed by the Minister”.
Free TV Australia chairman Harold Mitchell stated any increase in SBS’s prime time advertising will “come at the expense of the commercial free-to-air broadcasters”.
“This government was elected on the basis of being pro-business, but this decision has been taken without any consultation or consideration of the impact on our businesses,” Mitchell stated.
“There is a finite advertising pie and any increase in SBS revenues will come directly from commercial broadcasters who will in effect be subsidising a government-funded broadcaster.”
