Billionaire Kerry Stokes’s Seven Network today begins suing Rupert Murdoch’s News Corporation and Kerry Packer’s Publishing & Broadcasting, embroiling Australia’s broadcasting moguls in a $840 million battle.

Mr. Stokes, 64, alleges News, Publishing & Broadcasting, Telstra, and 19 others colluded to win Australian football rights for Foxtel Management, Australia’s biggest pay-TV network, forcing the closure of Seven’s C7 sports channel in 2002. Mr. Stokes is seeking as much as $852 million in damages as well as demanding the football broadcasting rights and a reshaping of Australia’s pay-TV industry that includes Mr. Murdoch’s and Mr. Packer’s exit from Foxtel. If he loses, Seven may have to cover its opponents’ legal costs, which analysts estimate as high as $116 million, more than double Seven’s profit last year.

“The potential valuation swings for Seven from the outcome of this case are huge,” an analyst at Merrill Lynch, Bret Hucker, said. He has advised clients to sell Seven’s stock. “While the downside appears lower, we would attach a higher probability to this outcome given the legal resources at the disposal of the defendants,” he said.

Seven had held the rights to broadcast the Australian Football League for more than 40 years. The AFL’s Grand Final is as important in Australia as the Super Bowl in America, being the most watched sports event with 2.8 million viewers last year, or more than one in every 10 Australians. Losing the rights started a three-year slide in ratings for Seven in 2001, and forced it to close C7 the following year, Seven says.

C7, founded in 1999, had provided sports channels to Singapore Telecommunications’s Optus network and Austar United Communications Network, a pay-TV network that broadcasts in Australia’s rural areas. Seven said Foxtel’s owners blocked it from airing C7 on their network, which weakened its position when it bid for the football rights.

Foxtel is owned by News, Publishing & Broadcasting, and Telstra. News Corporation, the publishing and broadcasting company run by Rupert Murdoch, an American citizen since 1985, owns 25% of the pay TV network.

Publishing & Broadcasting, which is controlled by Mr. Packer, Australia’s richest man, owns another quarter, with phone company Telstra holding the rest.

Seven has hired law firm Freehills to represent its claim that Foxtel’s owners colluded to outbid Seven for the AFL rights and also the rights to broadcast some National Rugby League matches in 2000, aiming to make it harder for C7 to compete with Foxtel or Fox Sports and “effectively killing off” the channel, according to Seven’s statement of claim.

“Seven’s put together a reasonable case,” Angus Gluskie, who manages the equivalent of $422 million at White Funds Management in Sydney, said. “They’ve definitely got an issue that they need to explore through the courts.”

News Corporation’s Australian unit, News Limited, bought the free-to-air and pay TV rights from the AFL in December 2000, selling the free-to-air rights on to Publishing & Broadcasting’s Nine Network and Ten Network Holdings and the pay TV rights to Foxtel. At about the same time, News and Publishing & Broadcasting also won the bid for the National Rugby League rights for their Fox Sports venture.

“Once Foxtel and Fox Sports had secured both the AFL and NRL subscription television rights, C7’s future as a competitor was doomed,” Seven said in its November 2002 statement of claim.

“The supply contracts with both Optus and Austar were contingent on the AFL rights being available, and consequently, C7 closed in May 2002,” it said.

A spokesman for News, Greg Baxter, denied there was a conspiracy to outmaneuver Seven, saying that “the company’s position is that the claims are without substance and will obviously be very vigorously defended.”

A spokeswoman for Telstra, Prue Christie, said “we don’t believe that the claims have any basis and we will defend them.” A spokesman for Publishing & Broadcasting declined to comment on the case.

Kerry Stokes, who owns 43% of Seven, is Australia’s eighth-richest person with an estimated fortune of $1.1 billion, according to BRW magazine’s annual Rich List.

Seven first lodged its claims in November 2002. The case has been going through preliminary hearings since then and was postponed from a February starting date as both sides were waiting for expert opinions. Seven engaged the advice of Nobel Prize winner Daniel McFadden, a professor of economics at the University of California in Berkeley, for its case.

The Federal Court of Australia in Sydney had to reconfigure court room 21A, its biggest, to make room for the legal teams of all parties involved, with an adjourning room for the press.