Paul McIntyre: Packer network takes a hit

There's nothing Australian TV broadcasters love more than the chance of a pony kick to a rival's rump. And it's so much more cherished when the rump in question is Kerry Packer's Nine Network.

This week Network Seven announced it had extended the contract of its chief executive and former Nine Network boss David Leckie by three years.

Leckie's present gig doesn't expire until next April, but with all the kerfuffle a few weeks back over the sudden resignation of Nine chief David Gyngell, Seven is ensuring the marketplace is reminded just how rock-solid it is after three years of turmoil dealing with a ratings slump.

This year for Seven is a good story - its prime-time audiences are up about 16 per cent while Nine and Ten have gone backwards. And Nine is still on the hunt for a new boss, a spot now being filled by Rupert Murdoch's saviour of BskyB in Britain and former Nine chief Sam Chisholm. Chisholm is also leading the charge to find a new head at Nine.

So, just in case Nine had any thoughts about luring Leckie back - Kerry Packer sacked him nearly three years ago - Seven this week moved to block it in a similar fashion to Ten's announcement two weeks ago that its CEO, John McAlpine, is standing down next month for Grant Blackley, Ten's boss of advertising sales. Blackley was also considered a candidate for the top job at Nine.

The small world of Australian TV just got smaller for Nine, and testament to just how tight the overall Australian media sector is that some other head-scratching scenarios are under way.

Try this one: Network Seven, controlled by billionaire Kerry Stokes, is suing fellow billionaires Rupert Murdoch (News Ltd) and Kerry Packer (Nine Network) and the Canadian-controlled Network Ten and pay TV operator Foxtel (owned by Murdoch, Packer and Telstra) for damages of between A$700 million and A$1.1 billion.

The reason is all these media groups joined forces three years ago to take the TV rights for the Australian Football League off Seven and, as Stokes alleges, conspired to put his pay TV channel C7 out of business.

While that mammoth case shapes up - legal fees for Seven alone top $15 million and the case doesn't start until next month - Network Ten has done a turncoat on its fellow AFL bidders and joined Seven to push to win the next AFL broadcast rights, which expire next year.

On the one hand we have Ten being sued by Seven for alleged anti-competitive behaviour, and on the other it has joined with Seven to take on Packer, Murdoch and Telstra for the next AFL TV rights. Superb irony.

And we mustn't forget that the guy at Nine who helped shape the deal three years ago that so peeved Kerry Stokes is now Stokes' TV boss at Seven - David Leckie.

Now to another media industry twist: Last month we covered Telstra's plans for an internet-delivered TV service, known globally as IPTV (internet protocol TV). Telstra has been on a global hunt for TV shows, movies and documentaries to underpin the new service, but the dilemma is that it also owns 50 per cent of Foxtel - Packer and Murdoch each hold 25 per cent. As it turns out this week, Telstra has handed some of the Australian TV networks a blueprint for delivering free-to-air TV programming and movie downloads for half the price of Foxtel's pay service. The problem with that is Telstra has kept its plans from fellow Foxtel shareholders, Messrs Murdoch and Packer.

There's been widespread belief for years that much tension exists between the three Foxtel bedfellows, mainly because Telstra has put up several billion dollars to lay fibre optic cable to deliver Foxtel's service while Foxtel has yet to turn a profit. Packer and Murdoch, however, have skimmed off any cream coming out of Foxtel because they also jointly own a number of pay TV channels which Foxtel pays big fees to carry.

So while the telco is yet to see any return after nearly 10 years, the two media moguls have done alright, thank you.

Because of that, Telstra figures it wants to fully own the next round of emerging technology - IPTV - rather than share and possibly be plundered again by media barons.

* Paul McIntyre is a Sydney journalist.