https://www.brisbanetimes.com.au/sp...with-cap-on-rights-value-20200510-p54rl6.html
The NRL is considering a proposal from Nine Entertainment Co for a long-term extension to its television deal with the the free-to-air network, which wants to cap its annual rights fee for the sport at about $90 million to $100m.
ARL Commission chairman Peter V’landys says he hopes to have reached agreement with the game’s two major broadcast partners by Friday and provide more financial certainty for the game ahead of its May 28 restart.
According to sources with knowledge of the negotiations, it is expected that while Foxtel, majority owned by News Corp, may be close to signing a long-term extension, Nine won't commit beyond the three years that remain in its existing deal unless League Central agrees to its offer for a reduced long-term arrangement.
News Corp reported on Sunday the code was on the brink of securing a new $2.3 billion television deal over seven years, which would take in the final three seasons of its current $1.8bn contract with Nine, Foxtel and Telstra that runs from 2018 to 2022.
Sources say Nine, the owners of this masthead, wants to cap its annual rights fees for the sport at $90m to $100m. Nine is this year paying $115m for NRL rights, a figure that will rise to $120m next year and $125m in 2022.
The NRL has offered a five per cent discount to the fees for the next two years, according to sources, as well as a more significant markdown on this season because of the impact of coronavirus.
Nine has put forward its case to the NRL for a long-term extension and the two parties have been back and forth on the issue but they had not reached a resolution by Sunday night.
The result is both could end up resolving to revisit a longer deal down the track rather than immediately. That would leave the door open for Nine to walk away from its long association with the game in the future or reconsider the game's value to the business. That scenario would also allow the NRL to potentially consider an alliance with another free-to-air network beyond 2022.
Nine chief executive Hugh Marks has been at loggerheads with the NRL for weeks over the value of the sport as a result of coronavirus and last week told investors at the Macquarie Australia Conference “it's not a given that NRL has to be part of our future”.
Marks said the sport needed to “pay its way like all of our content does” and confirmed the company’s interest in taking over the NRL’s digital arm.
While News Corp chief executive Robert Thompson said on Friday there needed to be a “fundamental reset” of the price of sports rights, Foxtel CEO Patrick Delany has kept a low profile on the talks with the NRL.
"The one thing I'm pretty consistent with is we just don't comment on live negotiations,” Delany told the
Herald last week.
“Some people choose to negotiate through the press, we just like to do things directly with our partners.”
Sources said an extension with Foxtel would not grant the subscription television outlet prized simulcast rights to State of Origin and the NRL grand final.
Nine currently has exclusive coverage of those flagship events as part its five-year deal with the NRL.
“I understand Channel Nine is being prudent but you’ve got to be careful because I still believe a free-to air network without either the NRL or the AFL ,that’s not something I would choose to do,” said Global Media and Sports managing director Colin Smith.
“I’d be surprised if Channel Nine would want to give up on State Origin in particular.”
- with Zoe Samios
