Guy Sebastian will represent Australia in the finals of Eurovision on Sunday morning Australia time as part of a deal under which SBS has paid organisers for the right to take part as it seeks a big ratings win that will boost its case to attract advertising on the multicultural broadcaster.

Like other European participants, SBS has paid a hefty participation fee, on top of its broadcasting fee, to ensure that our entrant, Guy Sebastian, can go straight into the final round, along with other countries such as France, Britain, Spain and Italy, who are given an automatic berth in the coveted final.

SBS chief content officer Helen Kellie said the fee was confidential. Eurovision said only that it was a fee similar to those paid by countries of a similar size.

But the real gain for SBS is the almost certain ratings bonanza which comes just a few days before controversial legislation is due to be introduced in Federal Parliament to allow SBS to screen 10 minutes of advertising in prime time, instead of the current restriction of six minutes an hour.

Most TV stations earn 80 per cent or more of their revenue from prime time ads. SBS is regularly selling out of prime time slots, so it's now asking the government to give it more. If successful in its bid, SBS says it will earn $28.5 million in additional revenue over the next four years, filling the gap that was left by cuts to its government funding in the 2014 budget.

Needless to say, the  commercial television networks are up in arms, claiming the changes will deliver SBS much more and warning that SBS will strip $148 million out of the advertising pie at a time when commercial TV is in dire straits.

So what's this got to do with Guy Sebastian? Apart from the World Cup in the year it runs, Eurovision is SBS's marquee event of the year. Ms Kellie says they are hopeful of getting more than 1 million viewers for the grand final, which will be broadcast live at 5am on Sunday and replayed at 7.30pm. Such numbers will translate directly into dollars, particularly if the SBS is successful in getting the legislation through parliament.

From the Eurovision perspective, the SBS suggestion of an Australian wild card entry came as the organisers grappled with how to ignite interest in an ageing song contest celebrating its 60th anniversary.

Why us and not America or Canada?

"Australia has been committed to broadcasting the Eurovision Song Contest for over 30 years and over the years built up a strong audience base. SBS has asked us to participate several times, and we thought the 60th anniversary of the contest is an excellent opportunity to – just for once – invite them to contribute," Eurovision song contest event co-ordinator Sieste Bakker explained.

As for the reaction in Europe? "It's mostly welcomed with enthusiasm and curiosity, but also some critical questions," Bakker admits.

The participation and broadcasting fees are but one component of the massive spend now needed to present the "Olympics of song". The total budget for the host broadcaster can be anywhere between €20 million to €30 million ($30 million to $45 million) and usually contains a contribution from the broadcaster itself, a contribution from the city where it's held – Vienna in 2015 – plus additional revenues streams such as ticket sales, a cut from the international sponsor income and a cut from the tele-voting income.

And if a nation wins, it comes with the obligation to stage the event next year, something many of the smaller European countries are said to deliberately avoid, by sending lesser acts. In Australia's case the time difference and cultural sensitivities mean that moving the event to Australia has been ruled out, though it is not clear what SBS's financial obligations would be if we won and were obliged to co-host in a European city.

Ms Kellie said SBS did not expect to make a profit on the event, even though this year it has four sponsors: Renault, Harvey Norman, AHM health insurance and Bingle car insurance.

But she acknowledged that it would be a ratings winner and an important part of SBS's strategy to build audiences. Like its commercial rivals, SBS will be introducing the audience watching Eurovision to the rest of its line-up, hoping they will come back more often.