Olympic first as Games go to pay TV

IN a groundbreaking move, the International Olympic Committee has ended the grip of free-to-air television networks on its broadcast rights after awarding the Italian rights for the 2010 and 2012 Olympics to News Corporation's pay-TV arm Sky Italia.
It is the first time a pay-TV group in a large market has been awarded the IOC's full broadcast and electronic rights, effectively becoming the gatekeeper of the rights. The move follows the $110million deal by the Nine Network and Foxtel for Australian rights to the same Games.
The Italian deal ends the hold on Olympic TV rights by Italy's state-owned TV network RAI, which has traditionally broadcast the Olympics in the sports-mad country and will broadcast the Beijing Games.
While Sky Italia will have to do a deal with a free-to-air TV operator in Italy to provide a minimum coverage, the surprise decision signals the IOC's determination to seek media deals that provide the maximum potential for the thousands of hours of Olympic sport across all electronic platforms, from pay and free-to-air to the internet and mobile telephony.
It also opens up the potential for News Corporation-linked pay-TV groups in three countries to consult on the coverage of the 2010 Winter Olympics in Vancouver and the 2012 Summer Olympics in London.
In Australia, pay-TV group Foxtel is 25 per cent owned by News Corporation (parent company of News Limited, publisher of The Australian), Media, with Telstra holding 50 per cent and Consolidated Media holding the final 25 per cent.
Last November the IOC awarded the New Zealand broadcast rights for the 2010 and 2012 Games to pay-TV operator Sky Network Television and its free-to-air channel Prime.
Sky Television New Zealand is 44 per cent owned by News Corporation.
Foxtel spokeswoman Kristen Foster said yesterday that the deal represented a "changing of the guard" with respect to the IOC's attitude towards subscription television.
She described the deal as transformational but said it was was early days in Foxtel's planning for coverage of the 2010 and 2012 Games.
Announcing the deal in Europe, IOC president Jacques Rogge said it would mean an increased coverage of the Games in Italy as well as "an exciting promotion of Olympic sports and Olympic values in Italy".
IOC vice-president Thomas Bach, who led the negotiations, said Sky Italia had "demonstrated an unrivalled commitment to the Olympic Games and the Olympic values that will allow sports fans in Italy the chance to see more Olympic sport than ever before".
Sky Italia chief executive Tom Mockridge said the deal showed Sky's "commitment to offer more quality and choice to our subscribers".
Mr Mockridge said Sky Italia would immediately begin discussions to identify the best free-to-air network to proceed with this project.
The Sky Italia deal is reported to have caught RAI by surprise. "It was asleep," said one observer this week.
RAI has traditionally shown the Olympics under a deal with the European Broadcasting Union, which negotiates a collective deal with the IOC on behalf of state-owned broadcasters including the BBC.
But this time around RAI did not want to pay the high price, after the EBU agreed a deal with the IOC in 2004 which represented a 40 per cent increase in fees for the 2010 and the 2012 Olympics to $US746 million in a deal covering 51 countries.
The terms of the deal were not disclosed, although one source said the IOC's decision was driven more by Sky's plans for extensive coverage across all platforms rather than the price