It's on: TV rights to sports in chaos as News signals an NRL offload

[El Diablo]

http://www.brisbanetimes.com.au/bus...ews-signals-an-nrl-offload-20091007-gn56.html

It's on: TV rights to sports in chaos as News signals an NRL offload
ROY MASTERS
October 7, 2009

THE first shots have been fired in what will become a bitter battle for the TV rights to the National Rugby League and the Australian Football League, with Channel Seven revealing it intends to challenge Nine for the nation's most valuable sporting property: State of Origin matches.

The rumbling in the media-football landscape grew louder yesterday after News Ltd gave the strongest indication yet it would walk away from rugby league and rescind its NRL half-ownership.

The Daily Telegraph said the former prime minister John Howard had been approached to head an independent commission to govern league, a sure sign the media giant is looking for a quick exit from a game it has controlled for more than 10 years.

A bidding war for league TV rights will send shockwaves through the sporting landscape and will especially worry the AFL, whose grand final was outrated by league's decider, even though league earns $50 million a year less in rights fees.

Rugby league will face a short-term funding gap and the Seven chief executive, David Leckie, anticipates the code will seek new revenue by unbundling its TV rights and offering four separate packages: Origin, Test matches, NRL regular-season matches and the finals series.

''We're very keen to submit a bid for State of Origin and Test matches,'' Mr Leckie said. ''We think rugby league should split its properties into three, or four, with even the finals going to a separate network.''

The chief executive of the NRL, David Gallop, has confirmed he would split the properties if it maximised revenue for a code that has had to fight for its share of the TV-rights pie with one arm tied behind its back because News Ltd owns half the competition as well as holding a 50 per cent share in its major TV broadcaster, Fox Sports.

The AFL's TV deal runs out at the end of the 2011 season and the NRL's runs out the following year, although negotiations could be brought forward.

''Obviously we would need to ensure the sum of all properties sold is greater than the total we would get from, say, Nine and Fox Sports who currently share our properties,'' Mr Gallop said.

Mr Leckie and Mr Gallop would win by seizing revenue from rivals - Seven taking advertising from Nine and the NRL undermining the AFL's push into western Sydney and the Gold Coast.

The AFL is demanding $1 billion over five years from its next broadcasting contract, using it to finance its expansion to rugby league territory.

Mr Leckie said Seven's programming of Origin and Test matches would have minimal impact on its weekend coverage of AFL games. But the AFL's expectation that it will receive $200 million a year for its planned nine games a week from 2012 will be challenged if Seven pays a premium for Origin and Test matches. Nor can the AFL, which has no representative games of any credibility, unbundle its properties, except to sell finals.

Channel Ten, Seven's free-to-air partner in the AFL rights, has indicated interest in buying NRL regular-season matches.

If the AFL's free-to-air TV partnership breaks up, Foxtel, which buys four AFL games a week from Seven-Ten, would presumably increase its programming.

All major sports are required to submit their wish list on the Federal Government's anti-siphoning legislation next week. With pay TV's pot of gold increasing at a time that free-to-air networks are using profit to pay off debt, the big codes want the rules relaxed.

''We want the list abandoned but if it is retained, we want guarantees the free-to-air channels can't hoard games by showing them on their digital channels,'' Mr Gallop said.

The potential recasting of TV rights could involve cricket. It, too, has distinct properties for unbundling: Tests, one-dayers and Twenty20 matches.

''I think cricket should also split their games,'' Mr Leckie said.

However, at least two senior network executives have found the influence of Kerry Packer still dominates Cricket Australia.

Rival networks seeking to meet the chairman and board of Cricket Australia have not had their calls returned or requests for appointments answered.

They argue that cricket is in serious trouble, devoid of personalities and is in need of a makeover, yet is still ruled by the ghost of Packer.

 

[El Diablo]

good stuff

all 3 interested. get this independent commission set up ASAP before Gallop f**ks it up again

 

[nomarg]

The news keeps getting better for league....

surely the AFL match with Ireland would be worth unbundling .:lol::lol::lol::lol:

 

[TimmyB]

God I hope we can seize this wave of momentum. I've followed the game all my life. However, as a 23 year old, I've probably only followed the media for about 10 years. I've never seen such positive press for Rugby League in that time.

The Daily Telegraph in particular. Funnily enough, it feels like about 3 months ago they flicked a switch from bad to good. Perhaps this has been their plan for a while?

 

[m0nty]

Roy is a glass half full kind of bloke.

 

[Ashman]

Finally we get to see how valuble Rugby League really is! I can't believe that Nine had the rights to every big event League showed on tv yet paid so little.
Rugby League has such a great television weapon in State of Origin it could easily earn the game between 30 to 40 million a year!

Is it any wonder that as soon as News signalled that it wants to get out of the ownership of the NRL that the future of league looks so much brighter and richer.

 

[Binga]

The news keeps getting better for league....

surely the AFL match with Ireland would be worth unbundling .:lol::lol::lol::lol:

I thought they didnt play that series anymore because it was getting to rouugh :lol:

 

[Perth Red]

As well as getting lots of money in from teh next deal we need to find out why such a small % of takings goes to clubs compared to AFL. Clubs should be getting a min of $6mill a year each and there should be a "growth" fund to support the development of the game in new areas and to help fund teams taking games on teh road to these areas.

 

[nomarg]

I thought they didnt play that series anymore because it was getting to rouugh :lol:

That's right what a laugh!

Merkins!

 

[nomarg]

As well as getting lots of money in from teh next deal we need to find out why such a small % of takings goes to clubs compared to AFL. Clubs should be getting a min of $6mill a year each and there should be a "growth" fund to support the development of the game in new areas and to help fund teams taking games on teh road to these areas.

I'm starting to get excited about this-

No one is doubting we are massively underpaid...and that was before league outrated AFL.......

If we could afford to up the cap - how good would that be...AFL want a billion for there rights. Surley ours are worth more taking in tests and SOO-

cap could easily skyrocket quickly....

 

[fourplay]

Another similar article by Roy Master in the SMH today

http://www.smh.com.au/news/lhqnews/why-news-is-eager-to-quit-the-nrl/2009/10/07/1254701061965.html

Why News Ltd is eager to quit the NRL ahead of time

Roy Masters | October 8, 2009

Frustrated by continuing conflicts of interest over coverage of player scandals and payment for media rights, NRL part-owner News Ltd is desperate to exit the game.

The haste to abandon the NRL eight years ahead of its scheduled departure has fast-forwarded plans to establish an independent commission to rule a code that seemingly has as many leagues as Jules Verne envisaged.

Former prime minister John Howard, whose principal sporting passion is cricket and whose interest in rugby league is focused on St George Illawarra, would be reluctant to lock himself into a long-term leadership of a re-branded Australian Rugby League. NRL chief executive David Gallop, who is certain to be the commission's inaugural CEO, was quick to distance himself from Howard, given rugby league received an $11 million grant on Saturday from the Rudd Government to construct a centralised administration.

The NRL club boss pledged with the task of recruiting commissioners, Gold Coast's Michael Searle, has approached former Qantas chief executive Geoff Dixon and chairman Gary Pemberton, who was also involved with SOCOG (Sydney Organising Committee for the Olympic Games) and the NSW TAB.

A past Queensland treasurer, Terry Mackenroth, currently a Queensland Rugby League director who sits on the board of the ARL, is considered a certainty to be elected to the commission. NRL executive board member Katie Page is also highly regarded but has a potential conflict as part-owner of Harvey Norman, the retail chain that sponsors State of Origin.

The potential break-up of Foxtel could also have accelerated News Ltd's determination to leave. News Ltd currently owns a quarter share and management rights of the giant telco, which has pay TV, mobile phone and online operations.

Should Telstra relinquish its half-ownership of Foxtel, News Ltd and the other quarter shareholder, James Packer's Consolidated Media Holdings, hold pre-emptive rights to buy it outright.

The C7 Federal Court case, in which Seven owner Kerry Stokes claimed a conspiracy by a coalition of Telstra, News Ltd and James Packer to shut down his pay TV arm, established that the law looks unkindly on a sport and a broadcaster being controlled by the same entity.

It is not known whether News Ltd will exercise a first-and-last-rights TV option as a condition of its exit from the NRL.

News Ltd chairman John Hartigan - a newspaper man - is tired of the conflict and looking to improve the balance sheet, while chief accountant Peter Macourt can see the value of exercising broadcasting control over a product that outrates AFL.

News Ltd draws $8m annually from NRL revenue, partly as re-payment of debts incurred during the Super League war but also to fund the Storm's annual $5m-$6m loss.

Such is the rivalry in the ''catch-and-kill-your-own'' world of rugby league, the NRL's other 15 clubs would demand News Ltd's $8m be split among them, rather than fund a club that has won the code's two big prizes - the NRL premiership and the under-20s Toyota Cup.

It is anticipated News Ltd, whose 1997 peace treaty with the ARL committed it to exit all but one of its clubs within 20 years, would leave the Storm at the same time it departed the NRL. This would impose immediate cost burdens on the NRL outpost.

While the Storm's revenue will increase when it moves to its new $300m rectangular stadium next year, it would need significant subsidies until gate-taking and sponsorship can be maximised.

The Broncos, the NRL's only listed club, is controlled by News Ltd, with a 67 per cent share, and makes an annual profit of between $1m and $2m. News Ltd's conflict was exposed during the State of Origin series when a Broncos player considered legal action against a News Ltd publication for a story that wrongly linked him with drug-taking.

News Ltd's Sydney tabloid, The Daily Telegraph, announced its back page would be a ''scandal free zone'' when the relentless exposure of misdemeanours attracted the criticism that the media company was undermining the value of its own sporting asset. A meeting of NRL club executives in August complained about harsh coverage.

The ARL, whose half-ownership of the NRL is enshrined in the 1997 peace treaty, was suspected a few months ago of deliberately stalling moves towards an independent commission. However, ARL chairman Colin Love is a strong supporter of a commission, despite News Ltd's oft-expressed view the ARL is made up of dinosaurs who should also surrender control.

Love is aware many leading Australian companies have been reluctant to invest in the NRL, knowing they were lining the pockets of one of the world's biggest corporations.

News Ltd also has a half share and management rights of Premier Media Group, owners of Fox Sports, which has the rights to televise five NRL games a week until 2012. As News Ltd half-owns the NRL and PMG, it is in fact paying money to itself for rights that, based on rugby league filling 66 of the top 100 spots on pay TV, is a seriously undervalued commitment.

 

[_Johnsy]

Great article Roy !!!!

Its gaining momentum, and I like it.

 

[Goddo]

Its too early to get excited for me. The NRL has to be very careful, as its very easy in this market to get ripped off. It seems rosey in the garden, but we have seen in the past how easy it is for the game to be undervalued.

Even though they are ripping league off, the current status quo with News Corp has had a stabilizing effect on the game. Changes need to be very carefully concidered. I would hate for there to be another disapointment.

I guess we need our fingers crossed and wait and see.

 

[Big Mick]

Geoff Dixon would be fantastic to have on the commission.

A very accomplished businessman, and very well respected in the world of aviation management.

Could certainly swing some sponsorship cash.

 

[Teddyboy]

Its too early to get excited for me. The NRL has to be very careful, as its very easy in this market to get ripped off. It seems rosey in the garden, but we have seen in the past how easy it is for the game to be undervalued.

Even though they are ripping league off, the current status quo with News Corp has had a stabilizing effect on the game. Changes need to be very carefully concidered. I would hate for there to be another disapointment.

I guess we need our fingers crossed and wait and see.

You seem pretty level headed.
I buy you a drink next time iam in The Black Garter.;-)

 

[Loudstrat]

As well as getting lots of money in from teh next deal we need to find out why such a small % of takings goes to clubs compared to AFL. Clubs should be getting a min of $6mill a year each and there should be a "growth" fund to support the development of the game in new areas and to help fund teams taking games on teh road to these areas.

Because in 1995 f*ckwit clubs like YOURS snubbed all the hard work the ARL in Sydney did to get the them up in the national comp, and brought News Ltd in to screw us all!

 

[TimmyB]

Don't be such an antagonistic prick. Time to let go of the us vs them mentality.

 

[Bastard Squad]

The news keeps getting better for league....

surely the AFL match with Ireland would be worth unbundling .:lol::lol::lol::lol:

Their supporters might object to having to subscribe to a separate gay porn channel to watch it.

Or maybe not.

 

[Perth Red]

Because in 1995 f*ckwit clubs like YOURS snubbed all the hard work the ARL in Sydney did to get the them up in the national comp, and brought News Ltd in to screw us all!

 

[superdog]

masters is a dope but this is very interesting news if true

they should engage seven and they should also engage ten/one hd