C7, Fox 'close competitors', court told

A Federal Court judge was "simply wrong" to conclude Seven Network Ltd's former C7
pay TV channel and Fox Sports were not close competitors, a court appeal has been
told.
Kerry Stokes' Seven made the claim in the Federal Court on Wednesday in an appeal
against last year's dismissal of its bid to sue a raft of media, telco and sport
parties over the 2002 demise of C7.
Seven says those parties colluded against C7, in breach of section 45 of the Trade
Practices Act, and consequently reduced competition in the market.
For Seven, Allan Myers, QC, is arguing that Justice Ronald Sackville's rejection of
Seven's case was flawed and contained serious errors of fact.
C7 collapsed in 2002 after failing to win the broadcast rights to the AFL and NRL,
and failing to gain access to the platform of pay TV counterpart Foxtel - and
because Optus stopped buying its content.
Mr Myers on Wednesday told the full bench of the court that Justice Sackville was
"simply wrong" in concluding that C7 and Fox Sports, which was partly owned by News
Ltd, were not in close competition in the wholesale sports channel market just
because the NRL and the AFL had different audiences.
"The characteristics of viewers is irrelevant," Mr Myers said.
"If C7 wasn't a competitor of Fox Sports, why was Fox Sports attempting to harm its
ability to compete?
"The channel providers are interested in what profits they can make in compiling
channels and selling them to the retail pay television market.
"It doesn't matter what sports they are placing in those channels, so long as those
sports attract sufficient audiences."
Mr Myers said Justice Sackville was also incorrect to conclude Optus would have gone
into a content-sharing agreement with Foxtel even if the AFL broadcast rights had
gone to C7.
Foxtel was then owned by Optus' rival Telstra Corp in partnership with News Ltd and
Publishing and Broadcasting Ltd.
It was "improbable" Optus would go into the "arms of its enemy", Mr Myers said.
"Optus was perfectly content with having AFL rights with C7," he said.
"The judge's decision is extraordinary."
Seven's marathon campaign to prove Foxtel's owners and others conspired eight years
ago to kill off its C7 pay-television sports venture was rejected by the Federal
Court in July 2007.
In his findings, Justice Sackville was scathing about the cost of Seven's so-called
"mega-litigation", which he estimated at about $200 million.
The trial had produced 85,653 documents, comprising 589,392 pages, with the
transcript running to 9,530 pages.
The appeal, which began this week, is set down for three weeks.