Is the Packer-Murdoch controlled Sky News angling for some
or all of the current contract that the ABC holds to produce the Asia Pacific
TV service
for the Department of Foreign Affairs and Trade?

Normally it would be put down as paranoia among ABC staff
with the contract’s renewal still more than a year away, but rumours persist
that some interest is being shown by Sky. News of this interest has reached the
ABC and DFAT.

The contract, which is worth $18 million a year over five years and
kicked off in August 2001, comes up for renewal in August next year. To preserve either continuity or to allow for a new
contender to ramp up, it’s felt that a decision will be made later this year on
a new contract from August 2006.

ABC chairman
Donald McDonald was as proud as punch in launching the new service a few years
ago. It was like a prodigal son or daughter returning. The ABC
had run a predecessor of the Asia Pacific Service in the early 90s but couldn’t
make it pay. The
Seven Network picked up the operation only to relinquish it as uneconomic.

The ABC came back to run it with DFAT’s funding under the
five-year contract. The appearance of Sky is interesting. It’s owned a third by
Nine Network (PBL) a third by Sky of London (News Corp, BSkyB) and a third by
the Seven Network.

News and PBL/Nine are the driving forces and newish
chairman, Sam Chisholm, the former Nine boss, head of BSkyB and current PBL
director, has become a hands-on chairman.

Sky could be interested in providing the news component alone,
but with Seven and Nine on board, there could be interest in turning Asia
Pacific into a much bigger satellite based service. It would also solve the
problem of what to do with Sky News which cannot grow very quickly because its
growth is limited to the growth in Foxtel subscribers.

Sky News has spent up on digital services and now it has to
get a return for that spending, but its been slow in coming because of the slow
uptake of Foxtel digital.