Details of the decision were made to the Australian Stock Exchange as the network brought to a close a partnership spanning the history of Australian television and the national growth of the game.
Seven Network said that matching the News Limited offer would have more than doubled Seven's costs of covering the Australian Football League.
The decision follows Seven's consideration of the structure of the offer for free-to-air television rights. Seven also took into account the maturity of the game in ratings and advertising revenue, and forward forecasts on future growth in those key indices, set against the substantial increase in costs associated with covering the game.
Executive Chairman of Seven Network Limited, Mr Kerry Stokes, said: "This significant decision was given the highest and most extensive level of consideration, as you could expect after such a long partnership.
"In the end, it was determined that we were not able to match the price the News Limited consortium was willing to pay - and at the same time continue our investment in other programming and production.
"Our programming and production plans for 2002 - under a strong and talented executive team led by Maureen Plavsic - are exciting and the board of the Seven Network was unwilling to compromise those plans.?
The AFL's offer included a significant increase in the rights fee, to $46 million cash and $10 million in contra airtime on the Seven Network per year, for five weekly matches.
In addition, Seven would be required to invest a further $33 million cash in rights fees each year to deliver free to viewers the same amount of coverage of the AFL from 2002 as the company has planned for 2001. In other words, to deliver in 2002 the free-to-air coverage planned for 2001 would have required an annual commitment of $89 million, not including marketing and production costs.
Based on a five match schedule, and on a per-hour basis, Seven's AFL costs would be more than 75 per cent greater than the cost of producing Blue Heelers, Australia's most-watched drama series.
Together with Seven's recent successful bid for television rights to the Commonwealth Games in 2002, the network's sports programming will now be driven by broadcast and subscription television coverage of the 2002 and 2006 Olympic Winter Games and the 2004 and 2009 Summer Olympic Games, and a long-term agreement for coverage of the Wallabies' rugby union test campaign.
In addition, Seven has ongoing agreements for coverage of the major golf tournaments and tennis championships in Australia, as well as Australia's campaign in the Davis Cup, and will be bolstering its coverage of rugby union and soccer, and a number of other major sports, including exclusive coverage of the Australian cricket team's Ashes tour of England this year.
