Mr Mitchell said it cost about $1000 a year to watch All Black Tests and other big matches on Sky Sport, and many people couldn't afford it.
Listen: Clayton Mitchell on the Radio Sport Breakfast
Government MPs said the bill was "populist pandering".
"Nothing is free, someone has to pay for it," said Brett Hudson.
"Some organisation is going to have to invest in and assemble a whole lot of equipment - are we going to dig into taxpayer money?"
Labour's Trevor Mallard said there was no way the bill could pass.
"No government is going to take $125 million a year off sport, that comes from broadcasting rights," he said.
"The member's heart is in the right place, it's a pity his brain wasn't engaged."
The Greens said there were many problems with the bill but they thought it should go to a select committee so there could be a discussion about its proposals. - AAP