Next TV rights deal part 2

[Last Week]

The karma of Optus helping putting the screws into news about some delicious.

Also how did he writes the word "light" when he meant to use the word "last"? He's done it twice!

I'm pretty confident we'll get over $2 billion. More even if a ninth game is added.

 

[Cumberland Throw]

the irony is indeed delicious...

go nuts rupert set up your own comp, it cost you $1B 20 years ago...

would cost about $10B this time... bahhahaha

 

[Nerd]

The mention of a breakaway competition is just laughable. The $1.85 billion dollar combined figure being floated doesn't look like it's going to be anywhere near enough for Fox to retain the NRL rights.

 

[Hello, I'm The Doctor]

that would be good negotiating

That is about my expectation and that is excluding the simalcasting rights that would push it up by quite a bit more.

 

[Hello, I'm The Doctor]

Can anyone clarify something for me on the simulcasting issue...

There seems a misconception of who controls the simulcasting rights as well. Arent 9 meant to get a preset reduction of $25m per year, the premium payed by Fox instead going to the ARLC.

the media keep saying that it would be thrashed out between 9 and News. And i reading this clause wrong or are they??

 

[Raiderdave]

the figure I originally came up with months back looks more & more like being very close to the mark.
2177 Billion for 5 years .. everything included
the largest dollar per annum media rights deal in the nation

Mr Smith was/is a genius
its a shame hes been lost to our game ..

 

[The Voice of Reason!]

RaiderDave is completely on the money here regarding Smith. And all of this talk about having to get back a rugby league person is a nonsense. The best thing that ever happened to the NRL was having a complete outsider with balls and brains do the best thing he could for "his team". In a way, isn't that a true rugby league person anyway?

Back to rights, Optus is unfolding very nicely. I expect by the New Year $2billion will be starting to appear in News articles. Judging from the taciturn tweet from NRL media they are going to be very happy to keep staring at their cards for a while and let News slowly bleed.

The best outcome could be to actually go with another player. Imagine if News had a loss as opposed to the threat of one. My Foxtel subscription would be just another of the many around here that would be handed back quicker than you can say "I won't be needed this Mr Murdoch, but don't worry sir AFL has always been your preferred game..."

 

[BlueandGold]

Can anyone clarify something for me on the simulcasting issue...

There seems a misconception of who controls the simulcasting rights as well. Arent 9 meant to get a preset reduction of $25m per year, the premium payed by Fox instead going to the ARLC.

the media keep saying that it would be thrashed out between 9 and News. And i reading this clause wrong or are they??

You are correct, it has nothing to do with News.

The Simulcasting reduction will be thrashed out between the NRL and 9.

Once the NRL and 9 have come to a agreement on how much the reduction will be then its time to make FOX pay for simulcasting which will not be cheap.

News are trying to make it look like they are in negotiations with the NRL and 9 and still have power in the negotiating process.

They dont and we know it.

 

[docbrown]

Apparently the interest in 9 to keep the Friday Double Headers is quite low although the option is still on the table. It looks like we're headed for Sunday Double Headers -- think of the way NFL is broadcast in the US -- that wall of coverage.

Though apparently there is some legitimate talk 9 could air a second Sunday game in the evening on a secondary channel. There is a concern about cannibalisation but the lift in ad rates combined may justify it. We may end up with proper Sunday Night Football on F2A out of this -- but to be honest I still think they'll go the safe road with Sunday arvos.

But suddenly that "worthless" slot will look a whole lot more appealing than Friday 6pm for Fox. It may just be a ploy to get Foxtel to pay up for the Saturday night slot and come to a resolution.

 

[TheRam]

the figure I originally came up with months back looks more & more like being very close to the mark.
2177 Billion for 5 years .. everything included
the largest dollar per annum media rights deal in the nation

Mr Smith was/is a genius
its a shame hes been lost to our game ..

The karma of Optus helping putting the screws into news about some delicious.

Also how did he writes the word "light" when he meant to use the word "last"? He's done it twice!

I'm pretty confident we'll get over $2 billion. More even if a ninth game is added.

How so? All I see from all the media outlets is a figure around $1.75-1.9 Billion, for everything. Plus we hand back Saturday game to Pox, which by the way would be a massive setback for the game. How on earth can the AFL have everything, like prime free to air games, complete simulcast of all games, a designated channel and $2.2b, while the NRL, the number one sports rating program on TV is struggling to break the $2B mark and only have 3 games on free to air to achieve it?

How is that great? Correct me if I'm wrong.

I know that Pox is throwing a lot of shade at the ARLC at the moment with its propaganda war but so far nothing has changed as far as the NRL being the step sister to the AFL. The Optus thing is a positive development, but I hardly think that it will pan out to the extent of pushing up the price to $2B+.

 

[docbrown]

How so? All I see from all the media outlets is a figure around $1.75-1.9 Billion, for everything.

Remember it was only a few weeks ago that News Corp were saying the NRL would get next to nothing from Fox, $1.3 to $1.4 billion for the deal max.

If the NRL signed a deal where everything (F2A, Pay TV, NZ, Simulcasting, Streaming, Sponsorship etc) came in at the $1.8 billion price and we'd only have 3 F2A games & a crappy 6pm Friday slot -- believe me -- I'll be the first to complain.

But remember - the NRL have had that offer from Fox for 2 weeks now. They could have pushed to get that resolved already. Don't forget - they sorted out & signed the 9 offer in a day.

The NRL are holding out for better terms - they think they can do better than that in terms of price and coverage. Don't be too eager to rule things out.

Edit: I'll add I think those estimates undervalue the NZ price too. I reckon they need to add another $30-50million+ easy.

 

[RoosTah]

I think people are underestimating Optus a bit here. They've confirmed interest and have been increasing their content offerings significantly via streaming services over the past few years. This year they posted close to a $1bn in profits, while News Corp posted $149 mill loss.

Over all revenues are another story, but it means Optus have a bit of cash to throw around and will be able to borrow pretty cheaply. Getting the NRL would massively improve their Australian media footprint - if they followed it by grabbing Super Rugby, then Fox would have very little left to offer footy fans.

From a strategic standpoint it would make sense for Optus to be willing to pay overs to get the NRL rights - the churn it would lead to over at Fox would be considerable and the majority would migrate direct to Optus.

 

[docbrown]

I think people are underestimating Optus a bit here. They've confirmed interest and have been increasing their content offerings significantly via streaming services over the past few years. This year they posted close to a $1bn in profits, while News Corp posted $149 mill loss.

Over all revenues are another story, but it means Optus have a bit of cash to throw around and will be able to borrow pretty cheaply. Getting the NRL would massively improve their Australian media footprint - if they followed it by grabbing Super Rugby, then Fox would have very little left to offer footy fans.

From a strategic standpoint it would make sense for Optus to be willing to pay overs to get the NRL rights - the churn it would lead to over at Fox would be considerable and the majority would migrate direct to Optus.

Their goal is to be a diversified media & communications platform - phone, internet, entertainment etc. To do that they need big brands. In terms of sport in Australia there's only a couple that fit the bill and at the moment really only one that's in an auction phase.

 

[RoosTah]

Their goal is to be a diversified media & communications platform - phone, internet, entertainment etc. To do that they need big brands. In terms of sport in Australia there's only a couple that fit the bill and at the moment really only one that's in an auction phase.

Absolutely. I can see Optus going hard at this and with Foxtel having blown their load on the AFL, I think they may end up being predominately just 'The AFL platform' if Optus decide to offer an amount in the $1bn territory.

Super Rugby is comparatively small fry, but it would mean Fox would effectively lose their north shore subscriber base, and a significant chunk of their eastern suburbs base too.

 

[TheRam]

Remember it was only a few weeks ago that News Corp were saying the NRL would get next to nothing from Fox, $1.3 to $1.4 billion for the deal max.

If the NRL signed a deal where everything (F2A, Pay TV, NZ, Simulcasting, Streaming, Sponsorship etc) came in at the $1.8 billion price and we'd only have 3 F2A games & a crappy 6pm Friday slot -- believe me -- I'll be the first to complain.

But remember - the NRL have had that offer from Fox for 2 weeks now. They could have pushed to get that resolved already. Don't forget - they sorted out & signed the 9 offer in a day.

The NRL are holding out for better terms - they think they can do better than that in terms of price and coverage. Don't be too eager to rule things out.

Edit: I'll add I think those estimates undervalue the NZ price too. I reckon they need to add another $30-50million+ easy.

Obviously they are holding out, but there in lies the problem, they are being significantly low balled and unless something major happens to change that, I think the rights will go up slightly by about $100-200m which would push it at best to $1.9B for everything and the loss of Saturday FTA coverage.

The only way around this is for Optus to really go hard, unlikely, and offer around $1B for just the remaining 4 games. I can't see them or anyone else doing this, can you?

 

[RoosTah]

Obviously they are holding out, but there in lies the problem, they are being significantly low balled and unless something major happens to change that, I think the rights will go up slightly by about $100-200m which would push it at best to $1.9B for everything and the loss of Saturday FTA coverage.

The only way around this is for Optus to really go hard, unlikely, and offer around $1B for just the remaining 4 games. I can't see them or anyone else doing this, can you?

I can.

You have to look at what Optus just did with the EPL and think about their rationale. They paid massive overs - twice what Fox were pitching - because its a market building strategic investment. They didn't have the rights, so they needed to be sure they'd get them and were willing to provide the outlay for their broader plan.

With their profits in such healthy territory, a $1bn offer for a property like the NRL would be a rationale outlay, given it's a property currently owned by another provider. Having it would enable them to become a genuine pay TV player again, and with their profits already strong, it would be worth paying overs to ensure they steal it from Fox, as the long term benefits would be a massive broadening of its consumer base.

 

[insert.pause]

Optus is also now fighting against a merged TPG-iinet with 1.7m broadband subscribers to Optus's 1m broadband subscribers. They know they need more to differentiate themselves from the budget broadband providers, particularly once the NBN is up and running, content will do that. What would be very interesting is if the rumoured merger or JV between Vodafone & TPG eventuated within the next 24 months. A new NBN network with a proliferation of budget providers and three big telco players looking to differentiate themselves, it's where the all content rights will be fought in the future, optus is probably ahead of the curve and caught telstra & newscorp off guard.

 

[TheRam]

I can.

You have to look at what Optus just did with the EPL and think about their rationale. They paid massive overs - twice what Fox were pitching - because its a market building strategic investment. They didn't have the rights, so they needed to be sure they'd get them and were willing to provide the outlay for their broader plan.

With their profits in such healthy territory, a $1bn offer for a property like the NRL would be a rationale outlay, given it's a property currently owned by another provider. Having it would enable them to become a genuine pay TV player again, and with their profits already strong, it would be worth paying overs to ensure they steal it from Fox, as the long term benefits would be a massive broadening of its consumer base.

Well I certainly hope your right and that I am proven totally wrong, but I am finding it very hard to see it going that way.

Besides, it's RL we are talking about, we have always been f**ked over.

 

[RoosTah]

Well I certainly hope your right and that I am proven totally wrong, but I am finding it very hard to see it going that way.

Besides, it's RL we are talking about, we have always been f**ked over.

The NRL is a very different beast now to what it was even 10 years ago. Smith has done a heck of a job into turning it into a real corporate powerhouse.

I have a friend who works there who is originally from Melbourne, and she told me that the change in the place has been pretty dramatic over the past few years and that it's really surprised her just how much every structure they have in terms of corporate governance has improved things.

The tweet put out by the NRL's new media account points to this in my view. Their very cool and collected message that they were in no rush and only care about the best interests of the game is frankly not a message we'd have had out of the NRL in the early 00s.

 

[RL The greatest game]

The NRL is a very different beast now to what it was even 10 years ago. Smith has done a heck of a job into turning it into a real corporate powerhouse.

I have a friend who works there who is originally from Melbourne, and she told me that the change in the place has been pretty dramatic over the past few years and that it's really surprised her just how much every structure they have in terms of corporate governance has improved things.

The tweet put out by the NRL's new media account points to this in my view. Their very cool and collected message that they were in no rush and only care about the best interests of the game is frankly not a message we'd have had out of the NRL in the early 00s.

Excellent post