Australias Sports Vision Gets Benched

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Sydney, Australia -- Sports Vision became the Australian
pay TV industry's latest casualty, announcing last week that an "unsustainable
shareholder structure" and escalating losses were forcing the company into
liquidation. The company, which was the exclusive supplier of sports channels to cable
operator Optus Vision, will lay off its staff of 45.

No sooner had that announcement been made when free-to-air
broadcaster Seven Network said that it would step in and package a nonexclusive sports
service for OV, based on the rights that it holds. This would mark the first time that a
national free-to-air network has packaged and supplied a channel to pay TV operators in
Australia.

Sports Vision's shareholders include Optus
Communications (OV's parent), Kerry Stokes' Seven, Kerry Packer's
Publishing and Broadcasting Ltd. and U.S.-based ESPN International. The company operated
four sports channels exclusively for OV: Sports Australia 1 and 2 and ESPN, which were
part of the premium tier of OV programming, as well as Sports AFL, an all-Australian
Football League channel, which was sold on a separate tier.

OV sources said the Sports Vision shareholders decided that
the revenue that they were receiving from OV subscribers could not sustain the company. OV
has had about 180,000 subscribers for the last 15 months, and Sports Vision was being paid
on a per-subscriber basis, with no minimum guarantees.

Optus Multimedia director Chris Weston said Sports
Vision's "current shareholding structure was not sustainable," while
sources said Seven had been agitating for some time to get out of Sports Vision and to cut
better deals for the rights that it holds.

Meanwhile another Sports Vision shareholder, PBL, has had
long-term plans to take a stake in Foxtel, the Australian cable operator owned by News
Corp. and telco Telstra.

Sports Vision held the rights to some of the most
significant sports programming in the country, and it was widely seen as having a stronger
sports lineup than News Corp.'s Fox Sports -- its rival, which is seen exclusively on
Foxtel and on the Austar wireless system.

The closure of Sports Vision was also interpreted as the
strongest indication yet that Optus Communications is pulling out of the pay TV-production
business, and that it will become strictly a programming distributor.

Weston noted that the nonexclusive deal with Seven is in
line with Optus' philosophy on the ongoing rationalization of Australia's pay TV
industry.

"We are committed to rationalizing the industry, and
we believe that this must involve nonexclusive content. Our deal with Seven is consistent
with this objective," he said.

Seven chairman Stokes added that the nonexclusive channel
agreement is "a step in the right direction for a restructured and revitalized pay TV
industry in Australia."

However, talk of "rationalization" on the sports
front appears to be premature, with a number of sports services still available.

Sports Vision, up until several weeks ago, had proposed
merging with Fox Sports, but that deal was scuttled at the last minute.

Under the new arrangements, Sports Australia 1 and 2 and
Sports AFL will disappear. Instead, OV viewers will get one 24-hour, seven-day sports
channel, and an additional sports channel on weekends. A third channel will be added for
major sports events. Seven said it also plans to "produce and supply a range of new
pay TV channels focusing on sport, drama and entertainment programming."

ESPN will continue to be transmitted on OV. The Australian
rights to the channel are held by Sports Vision CEO Tom Barnett through his private
production company, Leisure Media.

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