Rugby league blows siren on record billion dollar TV rights deal
The Australian
April 24, 2015 6:08PM
Rugby league has blown the siren on a new record billion dollar TV rights deal, pulling forward negotiations by one year in a surprise move to blindside the AFL.
It’s understood Australian Rugby League Commission CEO David Smith phoned the bosses of rights holders Nine Network and Fox Sports on Friday morning to give formal notification that he will kick off the process next week.
Mr Smith also contacted the Seven and Ten networks in a clear sign the code will aggressively exploit competitive tension to beat the $1.1bn contract signed in 2012.
The rugby league boss has conjured up an audacious move to get one over Australian Football League chief executive Gillon McLachlan, deftly exploiting the rival code’s delayed talks. A spokesman for the NRL declined to comment.
Broadcasters are paying more than ever for exclusive rights because the immediacy of fixtures and fan loyalty ensure big live audiences, which will push up the value of the NRL’s rights.
Bidding for rights as they come up for renewal has become an even fiercer game, which will make the spectacle as intriguing as the matches themselves in the coming months.
But the NRL is unlikely to match the extraordinary sports rights inflation recently seen in the US and UK markets, which do not have the anti-siphoning list.
The regulation ring fences a long list of top-tier sports events and fixtures for the free-to-air networks, effectively locking subscription-TV provider Foxtel out of the bidding process. The range of the controversial regulation is unique to Australia.
In February, European satellite broadcaster SKY and telco BT forked out a record £5.1 billion ($10 billion) for television rights to broadcast English Premier League games in 2016-2019.
The stunning 70 per cent price hike came amid a massive bidding war that also included reported bids from America’s Discovery Network and Qatar’s beIN Sports.
For free-to-air network CEOs, it’s also getting tougher to deliver earnings growth because of flat conditions in the advertising market and cost inflation. While the media bosses will do what it takes to win the rights, they will not have open cheque books, opening up the possibility of two free-to-air networks sharing matches to keep a lid on costs.
Presently, Nine owns all the free-to-air rights, with Fox Sports and Foxtel broadcasting pay-TV rights.
Mr Smith has swooped in after The Australian revealed Mr McLachlan postponed his own talks due to ongoing uncertainty surrounding the sale of potential bidder Ten Network.
The AFL Commission decided to wait for the free-to-air network’s future to be clarified to maximise competition tension and get the best possible deal.
The NRL’s five-year deal with Nine and Fox Sports is worth $1.025 billion, comprising $925 million in cash and a further $100m in contra advertising.
The agreement is only just short of the $1.253 billion five-year deal AFL deal, which improved on its previous deal of $749 million.
