Optus joins race for NRL broadcast rights, increasing pressure on Fox Sports
Date
November 19, 2015 - 10:00PM
Brad Walter
Sports Reporter
Optus has confirmed its interest in the NRL broadcast rights in a move that increases pressure on Fox Sports to secure a deal for the remaining four matches per week.
After initially talking down the value of the pay TV rights following the NRL's decision to sell four free-to-air games per week to Nine, News Corp is now back at the negotiating table with a radical proposal that includes a match each Friday at 6pm on Fox Sports.
While there has been speculation the resignation of NRL chief executive David Smith was the key to rekindling talks, the offer from Fox Sports coincides with Optus snatching the rights to English Premier League for three years from next August.
The shock return of Optus to the sports market is believed to have sparked fears within News that the telco would buy the NRL rights and on-sell them to Fox Sports for a premium.
Another possibility is Optus again becomes a serious pay TV rival to Fox Sports and either broadcast matches through Fetch TV or seeks to have a channel on the Foxtel platform, which is operated by Telstra.
As a result, News is seeking to speed up negotiations but the NRL does not see the need to rush any deal and has been speaking to other parties, including Optus.
It is unclear whether Optus would be willing to pay the estimated the $700 million the NRL is seeking for the five-year deal but a spokesperson told Fairfax Media the telco was interested in securing more premium content.
"Content is key to Optus' strategy of delivering Australians with more entertainment," the spokesperson said. "Our focus is on opportunities that make commercial sense, add value to the Optus brand, and help build a bigger, better mobile experience for our customers."
The NRL's decision to look at alternatives to Fox Sports in a bid secure more money for the game appears to be causing frustration within News ranks, which has led to speculation about a breakaway competition if a deal isn't finalised soon.
However, the latest Fox Sports bid is dependent on Nine selling back the Saturday night match it has purchased for five years from 2018, which the free-to-air network has indicated it would be willing to do for $200 million – about $50 million more than News has indicated it would pay.
Should the deal proceed, it has been estimated that News could pay up to $950 billion for five games per week and the right to simulcast the remaining three shown by Nine.
With the digital rights and New Zealand rights included, it is predicted the total value of the NRL broadcast rights could be as high as $1.85 billion over five years – a figure comparable to the $2.508 billion, six-year deal the AFL recently negotiated with Seven, Fox Sports and Telstra.
News Corp's decision to surrender its first and light rights option for the rights as a condition of the current broadcast deal, combined with the emergence of streaming, has created competitive tension in negotiations that has not existed since before the Super League war.
Optus was heavily involved in the game during that period and broadcast matches on Optus Vision through its allegiance with the then Nine boss Kerry Packer, who held the pay TV rights to rugby league and cricket.
Packer had initially been part of a consortium with News and Telstra that became Foxtel and his decision to switch camps and provide content for Optus was a catalyst for the Super League war.
Under the terms of the peace deal in 1998 that led to the formation of the NRL, News Corp had the first and light right of refusal for the broadcast rights until 2022 and that term was extended until 2027 as a key condition of the media company handing control of the game to an independent commission in 2012.
