Thought this article was interesting and maybe give the NRL a wake up in a few areas. Mainly about TV deals reaching a tipping point in sports broadcasting, so a real potential of less money next deal. But also mentions NRL dependence on TV money because of lower attendance, so maybe this might be incentive to do something about attendances since the gravy train might by slowing up. Also makes the point about more premium content ie another Bris/SEQ team would help next deal.
http://www.smh.com.au/rugby-league/...warns-seven-network-boss-20170816-gxxl5o.html
AUGUST 16 2017 - 6:17PM
TV rights for major sports at 'tipping point' after Seven Network loss
Adrian Proszenko
There are fears the value of the next broadcast deals for sports such as rugby league and cricket could plateau or even plummet after the Seven Network posted a $745 million loss for the financial year.
Global Media and Sports boss Colin Smith, who previously helped the NRL, AFL and ARU broker media deals, has echoed the view of Seven West Media boss Tim Worner, who claimed sports rights had reached a "tipping point".
Seven West Media's overall revenue was down 2.7 per cent to $1.6 billion in comparison to the previous year, which included the Rio Olympics. The free-to-air network invests heavily in sports, including the AFL and tennis' Australian Open, with the shock result raising fresh questions about the future broadcast value of those and other sports.
The Nine Network holds the broadcast rights for cricket and rugby league. Nine has had the rights for home cricket internationals since 1979, although the current deal will expire at the end of the 2017-18 summer. The Big Bash rights are about to be up for renegotiation and uncertainty over the future of current rights holder Channel Ten will likely decrease the competitive tension in the market.
Nine's new NRL contract kicks in for the 2018 season and runs for the next five years, a deal that – in partnership with those done with News Corp, Fox Sports and Telstra – will bring in $1.8 billion for the NRL. While that sum represents a 70 per cent increase on the previous rights deal, there could be a downside in the future.
"We are fast approaching the tipping point," Smith said.
"The broadcasters' costs are rising and by acquiring content such as AFL and NRL they're not getting more revenue. That's not sustainable long-term.
"Then you have the issue of whether one of the free-to-air networks survive, and if it does, in what form?
"It's not like there's a feeding frenzy out there attempting to acquire rights.
"The idea that there is going to be significant growth going forward is going to be challenged."
Rugby league is the only major sport without a collective bargaining agreement after cricket and AFL recently struck revenue-sharing arrangements with their players. The Rugby League Players' Association has been pushing for a 29 per cent slice of the pie, which would mean a share of any upside or downside in revenue in the ensuing five years.
Smith said the only way the NRL could ensure an increase in its next deal was by adding premium content. He suggested a team in the Brisbane or south-east Queensland regions could achieve this.
"If you're not increasing your television audience, and therefore making yourself more attractive, how can broadcasters continue to pay more money?" Smith asked. "It's not possible. One of the challenges you have in rugby league is that TV audiences have dropped. While AFL is up about 2 per cent, in the NRL, Fox Sports is slightly up, but channel Nine is significantly down.
"That makes it tough to think that come 2021-22, there will be significant increases.
"Television is more important for rugby league than AFL because their attendances, save for Origin and the grand final, are comparably low."
Worner's "tipping point" warning came on Wednesday morning as the chief executive blamed his company's poor performance on a "tough market".
"Given changes in the market, price rises are not sustainable. We have to reach a position where the economics stack up for all parties [and] where the power and reach that free-to-air brings [to sports]," Worner said.
He pointed to the popularity of the Big Bash as an example of why networks should be rewarded for growing the popularity of sports.
"These sports code have to start to recognise the power of what we bring to them," Worner said.
There are hopes that "disruptors", such as Netflix, Google, Facebook and Amazon, will enter the race for future sporting content, therefore pushing up the price.
While Smith said their entry into the market was inevitable, it might not happen in time for the next NRL rights cycle.
