It replaces Sports Vision which went into liquidation on Monday.
The move represents the latest step in series of manoeuvres described by James Bunn, of Sydney based TV distribution company TPL Sport, as representing the return of sanity to the Australian sports market.
Optus said on Monday it had agreed to put Sports Vision, a joint venture between Optus, Seven, Publishing and Broadcasting Ltd , and Walt Disney Co's ESPN, into provisional liquidation.
Pay television industry sources said Optus has struggled in recent times with only 200,000 subscribers to justify the high cost of the Sports Vision joint venture and wanted to renegotiate a more sustainable sports programming arrangement.
Optus Vision's major competitor, the Foxtel joint venture between News Corp Ltd and Telstra Corp Ltd , has about 300,000 subscribers.
Seven said its 24 hour channel for Optus would be complemented by an additional sports channel during weekends and the network was also planning the introduction of further sports channels for specific major sports events.
"The Seven sports channels will broadcast sports programming currently featured on Sports Vision's Sports Australia, including existing coverage agreements with the Australian Football League (AFL) and the National Rugby League," Seven said.
The dedicated channel would also draw on Seven's coverage of major tennis tournaments including The Australian Open and major golf championships, including The Australian Open, The Australian Masters and the Greg Norman International.
Seven said the new deal was non exclusive and allowed for cross supply with other pay television channels.
Analysts said after the provisional liquidation of Sports Vision it was positive for Seven and Foxtel because it freed it up to sell its exclusive AFL pay television rights to Foxtel.
Coverage of the AFL, which is very popular in Australia's southern states, is the only major local sport not covered by Foxtel.
"While Seven will be working closely with Optus Communications in the delivery of its new sports channels, the agreement is consistent with the ongoing rationalisation of the industry, while allowing for non-exclusivity and cross-supply - providing Seven with a number of opportunities to pursue additional delivery platforms for its new channels," Seven said.
Later Seven said it expected to make profits within two years from its new deal to supply sports programming to Optus Communication's Optus Vision.
But it said the deal was not exclusive and it would still talk to other pay television groups, including Foxtel about supplying them with its AFL coverage.
Seven chief executive Gary Rice said in a statement Seven would become a leader in sports on pay television.
"We believe the agreement with Optus Communications will play a key role in Seven's plans for a broad involvement in new communications technologies," Rice said.
Seven chairman Kerry Stokes said in the statement the new agreement was a "step in the right direction for a restructuring and revitalised pay television industry in Australia".
The Seven spokesman said the Seven board had not decided how to deal with any losses from the Sports Vision venture.
He said Seven had invested A$4 million initially in the venture and had also lent it A$13 million.
Seven holds a 30 percent stake in Sports Vision, ESPN holds 25 percent, Optus holds 25 percent and PBL owns 20 percent.
This implies a total investment in the Sports Vision of about A$13 million, with loans of about A$43 million.
Optus and Seven said in a separate joint venture the deal was far more commercially sustainable.
Sport Business/Reuters
