Since July, the ABC has been in the grip of a three-year freeze on growth of its $1 billion a year in government funding. The indexation freeze was projected to cost a total $84 million although the actual foregone revenue may end up being around 40 per cent less, given the lower-than-expected inflation rate.
ABC managing director David Anderson warned in May that staff cuts and content disruption would be inevitable and has since looked at contracts covering transmission and content deals and real estate as other ways to manage the shortfall.
Communications Minister Paul Fletcher says the ABC Act requires the broadcaster’s board to ensure efficiency and deliver maximum benefits to taxpayers. He has urged the organisation to adapt to digital disruption “without skipping a beat in the services they deliver”.
“The ABC shouldn’t be afraid to talk to Australians directly and explain its decisions and strategy for transformation in the new media age,” he adds.
A former senior ABC executive says the issue of whether to keep the coverage was debated for the “last several Olympics” as audiences increasingly moved to videos on mobile devices. The source did not want to be named because of the controversial nature of the topic.
“There has been this tension around the price of the rights, which are of course only a fraction of the television rights, but [for public broadcasters] have no revenue stream attached,” the person says.
According to several people close to the ABC, the organisation is trying to focus on “all things Australian” and while the Olympics can be viewed through an Australian lens it is still a global event.
However, the decision still came as a “surprise” and a “shock” to many associated with the broadcaster who said Tokyo was a good time zone for coverage which would boost audiences.
“Can you guarantee someone on a farm in Gunnedah or living in Mount Isa can hear the coverage [without the ABC]?,” the former senior ABC executive says.
“The flipside is if you have a screen near you, you’ll watch it. If you have a mobile phone you’ll watch it … Even farmers in tractors ploughing fields have phones and internet. There’s a real tension between sentimental attachment versus a clear-eyed assessment over the cost and audience size.”
A retreat from the Olympics could present difficulties for the broadcaster in holding on to sporting talent amid the competition of Foxtel, commercial television and radio. The Games are considered a highlight of the sporting calendar.
An ABC spokesman says the public is given a wide range of programs and content across many different platforms and the Olympics coverage is not a “zero-sum decision” but to do with priorities.
“Part of the ABC’s charter responsibilities are to also consider the broader media environment,” he says in a statement responding to why lifestyle website ABC Life was retained over the Olympics coverage.
ABC radio boss Judith Whelan says the broadcaster is saving $1 million by not doing the live radio coverage. The cost of mounting the coverage accounts for more of that bill than the rights themselves, which the ABC buys from official commercial broadcaster Seven.
A source familiar with the ABC’s thinking says there is “no doubt on an audience-for-investment basis ABC Life will bring a far bigger and broader audience for the money”. The 2016 Rio Olympics radio coverage did not result in any significant increase in ABC audience numbers.
Former ABC chair Maurice Newman, who served in the role between 2007 and 2012, questions the severity of the budget pressures faced by the broadcaster and the suggestion that the money couldn’t be redirected from elsewhere, including outside the radio programming budget.
“If you can’t find $1 million to carry the Olympic Games, your budgeting isn’t very good,” he said. “If you want to find the money, you can find the money.”
Buttrose is considered by media industry executives to have a strong grasp on the views of the average taxpayer across the country. For this reason, sources close to the government consider the Olympics decision to be “political” and designed to anger the public about budget cuts.
“They would have known this would’ve generated attention and political attention and I don’t think they [the ABC] mind people knowing they’re facing tough decisions,” another source said. “I wouldn’t be surprised if the decision is flipped in future.”
ABC sources categorically reject the idea politics was a factor. “No, it’s not a political chess move,” insists Whelan.
“The ABC has announced its decision and is sticking by that decision,” a spokesman says.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.
Fergus Hunter is an education and communications reporter for The Sydney Morning Herald and The Age.