Peter V’landys and his chief executive Andrew Abdo want a mammoth broadcast deal to shore up the code’s future. Will they bring an NFL-style model to Australia?
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The media storm behind the NRL’s next billion-dollar play
Once the dust settles on this weekend’s grand final, rugby league bosses Peter V’landys and Andrew Abdo will hit fast-forward on plans to secure a multibillion-dollar broadcast deal.
There are more than two years left on the NRL’s existing agreement with Foxtel and Nine Entertainment – but the pair do not want to waste time.
The NRL’s audiences are bigger than ever and the addition of two new clubs into the competition by the end of the decade has put them in a strong position. Or at least that’s the hope.
People familiar with the matter but not authorised to speak publicly said negotiations could start within weeks, as soon as the NRL’s expansion plans are locked in. V’landys, who is the Australian Rugby League Commission chairman, is a deal maker and there is every chance a record agreement can be achieved. But this next round of negotiations will not be easy.
Traditional media has never been in a tougher position. Australia’s advertising market is weak and companies including Nine and Foxtel are trying to balance this with fast-growing costs – this was the key reason for the departure of Nine chief executive Mike Sneesby last month.
The Albanese government is also considering a gambling advertising ban during major sporting events, which would cost sports and media partners millions of dollars. To make matters more complicated, Foxtel – the owner of Fox Sports and Kayo Sports – is up for sale, and Nine doesn’t have a permanent chief executive (Matt Stanton is the interim CEO).
The AFL made history in 2022 when it signed a $4.5 billion media rights deal with Seven West Media and Foxtel over seven years. This was a 36 per cent increase on the adjusted broadcast agreement made during the pandemic.
With more matches to sell when the new clubs start, as well as new timeslots and new markets, the NRL will want a record windfall. Media rights are critical to sports administrators – about 70 per cent of the NRL’s revenue comes from this deal.
For all of V’landys’ NRL achievements – steering the sport through the pandemic and launching the season in the United States – he will be judged on the size of the next agreement. To achieve a substantial increase in the current climate, V’landys and Abdo will have to think differently.
“Naturally, we would expect any future NRL media rights deal would reflect the strong growth the code has experienced in recent seasons and the passionate following fans have for the game,” Abdo says. “The [ARLC] is focused on securing the best possible broadcast deal for the game’s stakeholders and that will involve a detailed analysis on what we take to the market.”
The NRL’s 17 clubs – which believe they were undercut last negotiations – want the final sign-off on any deal as a condition of continuing to compete for the premiership. No matter what way you cut it, it will be complicated.
“The next NRL broadcast deal is the trickiest sports rights deal in Australia in living memory,” says sports and media lawyer Lachlan Gepp, who previously worked for the NRL and Sportsbet.
“The ARL Commission will be laser-focused on surpassing the value of the AFL deal, but I can’t see that happening under a traditional broadcast model. The money just isn’t there.”
The last time V’landys was forced to the negotiating table, NRL players weren’t even on the field. It was early 2020 and the number of people infected with COVID-19 was increasing by the day. It was a terrible situation. The absence of competition was going to send the NRL broke and put its media partners Nine and Foxtel into a bad financial state.
But in the hours before the start of the season, V’landys – who had recently sacked chief executive Todd Greenberg – struck what many thought was gold: an extended deal with Foxtel until 2027 (the terms were not disclosed).
Nine, the owner of The Australian Financial Review, negotiated a discount for the remaining part of its contract before signing a deal worth $650 million in 2021 and Foxtel ended up injecting more cash into the game when the Dolphins joined the competition in 2023.
Media and rugby league sources claim the total agreement, which expires in 2027, is worth a little over $1.7 billion when including rights in New Zealand.
But by the time 2022 came around, it was clear that the NRL may not have got what it thought it deserved. A $4.5 billion deal struck by the AFL with Foxtel and Seven West Media raised eyebrows – it left many NRL clubs and media executives believing Foxtel got itself the better deal back in 2020.
Former Nine chief executive Hugh Marks was probably thinking that, too. By the time Nine was ready to negotiate an extension in late 2021, the company had launched its own paywalled sports service, Stan Sport.
People with direct knowledge of the discussions, who requested anonymity to speak freely, said Marks told V’landys doing an early deal with Foxtel was a mistake – Nine could have bid for the entire product and used it across all of its services.
V’landys would later say the AFL deal wasn’t a concern and that he needed to do the deal to stop Foxtel from going broke. “If Foxtel coughs, all the codes catch a cold,” he told The Sydney Morning Herald in 2022.
Some media executives didn’t agree, suggested the comments proved he was too close to News Corp. “He did the wrong deal,” said one on condition of anonymity over concerns of retribution. “Hindsight is a brilliant thing.”
V’landys and News Corp executive chairman Lachlan Murdoch know each other well. Fox Corp, which is run by Murdoch, was a significant promoter of the push into Las Vegas early this year and News Corp is the majority owner of the ASX-listed Brisbane Broncos. News Corp tabloid The Daily Telegraphfrequently places V’landys among its most powerful people in the country (the Financial Review also placed V’landys on a power list last month). V’landys argues the relationship comes with benefits for the NRL.
The NRL has more than two years until its existing broadcast deals expire, which begs the question of why now.
The most obvious answer is the NRL is in a strong position. In 2023, the NRL reported revenue of $701 million, an increase of 18 per cent and an operating surplus of $58.2 million, up 7 per cent.
Viewership has increased too, which makes it more appealing to advertisers and broadcasters. The NRL says that free-to-air television viewers climbed 3.7 per cent in the regular season and subscription TV audiences, including those on Kayo Sports, climbed 8.1 per cent. Flagship season events like the State of Origin and Magic Round were also up year-on-year.
“Peter V’landys and Andrew Abdo have the game humming,” says former Nine chief executive David Gyngell. “They need to get paid for it.”
There are signs traditional media partners will be played against the new in this negotiation – V’landys said in an interview last month he wanted a meeting with billionaire David Ellison, the new owner of Paramount.
But what competitive tension looks like in reality is unclear.
Nine’s investors made it clear that they don’t want the company to spend lots of money after striking historic deals with Tennis Australia and the International Olympic Committee for five summer and winter games.
Seven and Ten aren’t flowing with cash either and all three television networks are still waiting on the outcome of a federal government inquiry into reducing online gambling harm.
There is a possibility that gambling ads will be banned during live sport, inside stadiums, and on jerseys. If that goes ahead, it would have an impact on the economics of a new deal and how much a potential party could offer.
Some bookmakers are already introducing changes to how much they spend on advertisements and programs around sports. The NRL’s wagering partner, Sportsbet, has cut the numbers of ads before and after live sport and will have no one promoting odds around the grand final over the weekend (it did the same thing in the AFL). Sportsbet declined to comment.
“The AFL has almost always perfectly timed their deal,” Hunter Fujak, lecturer in sports management at Deakin University, says. “The AFL signed a deal in a world before Seven would have been thinking about gambling ad bans. They would have got absolute top dollar.
“NRL is now going to go to market in a world where free-to-air companies can’t have anywhere near as many gambling ads. Structurally, I don’t think it’s going to be able to be in the same ballpark.”
If Nine does want to engage in a new deal, it will need to convince its board and shareholders the numbers stack up. That includes billionaire Bruce Gordon, who happens to own the St George Illawarra Dragons.
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