Independent body not all good News for avaricious code
JACQUELIN MAGNAY
November 30, 2009
COMMENT
Wild dreams of pots of gold from broadcast rights fees are underpinning a push from certain elements of rugby league for an independent commission to run the code.
While having the one body pushing the code in a cohesive direction can only be good for the game, there are some dangers in allowing the current cash cow - News Limited - to walk away. And the key one is money.
Many people in the game believe the NRL has previously been stymied in television contract negotiations by News Limited's half-ownership and the conflicts of interest in securing pay television rights fees from Fox Sports, part-owned by News Limited. But it could be argued that the game's second-largest revenue raiser - major naming rights sponsor and internet rights holder Telstra - is most involved in the code because of its part ownership of Foxtel, alongside News Limited.
The NRL might have boosted its television rights fees in the last negotiations - but not as much as its fierce rival, the AFL. And that had more to do with posturing from media moguls than any commonsense analysis of return on investment or the reach into key commercial markets. In essence, the pay television deals had nought to do with the differences between the code's contracts - but the free-to-air rights did.
Significantly, all of the rights for the NRL - sponsorship, broadcast, radio, internet and new media - are up for renewal at the end of 2012. This was done deliberately by NRL executives to try to extract a premium from a telco or media company which might pay more to buy a whole product, and which could then subcontract out bits and pieces.
Yet within the NRL there are subcommittees already working hard against that principle, preparing to split the game further than it already is - auctioning the State of Origin, or Monday Night Football, or Test matches into separate parcels. The theory is that perhaps the sum of the pieces will be greater than the whole, but this, too, is a gamble.
Will a company that has only a small piece of the game leverage harder to promote it?
Insiders say having everything available at the one time simply allows any negotiations to be maximised as various combinations can be put forward.
The global financial crisis has caused a shift in the fortunes of media outlets such as Channel Nine, which has a first and last right of refusal for the free-to-air NRL broadcast rights. If Channel Seven and Ten successfully bid for the AFL rights - which critically expire a year before the NRL's - then the number of bidders for rugby league might be restricted. But of course the NRL has a great product which repeatedly draws in the ratings - a magnetic lure for television stations, even ones that are struggling.
Let's hope that the blazer-wearing types that end up overseeing the game are business savvy, because the rainbow is a slippery slope indeed. Maybe the question should be posed: If the game is so robust, why is News Limited running out the door?
