On growth and greater compitition, this could be right. But it doesnt take into account the value that the NRL chose to forgo in return for the stations to relinquish their F&L right....
Fox had those right until 2027, which would have covered this coming deal and 2 after than. they obviously would have placed a lot of value on that, so to give it up that must have reduced the basic dollar amount from this deal by quite a bit. (i heard the deal would have been $1.6b-ish without the F&L thrown in)
I honestly dont reckon $2billion is unreasonable...
What follows is a lengthy post with many pertinent points. The 'TLDR' summary: You fools! Should have read it!!!!!
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Start: will quote this comment because it is seminal to the current flow of conversation; but Im speaking about most comments these past 2 pages.
ive said elsewhere myself that more than $1.5B is not out of the question at all, even $2B is like you say 'not unreasonable' in many senses.
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Dice it up any way we like; and in this case lets get out our algebra and see if we arrive at the purported figures with this.
If people take Origin to be next time worth 500k a minute (and its estimated to make up right now approx 1/3rd the entire deal)....thats 3 matches a year at 40m each=120...then multiply by 5 years= 600M.....
Aaaaand, ta!-da!.. the figure that 600m is 1/3rd of if 1.8Billion.
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Add some competitive tension, maximise the chance for everyone to have a crack at the bid for once in god knows how long - 30 years??....and you could find league more spread around [perhaps] and more fairly remunerated.
Now, if you take the other estimations like the price paid for F&L rights, you could be looking at something that has a value
well over 2 Billion dollars.
Now, can the market pay that? Thats the big question. But if anyone thinks that under 1.5 is acceptable, or 1.6, and its not northwards of 1.7 at least, will have a hard time convincing anyone robbery didn't happen.
We may not be on the cusp of the massive jumps in American and european markets, but we are in a time when sport is undergoing an "ascension" of sorts. Not only is it more popular than ever (sport), but its beginning to reach places - and levels- that its never reached before in society/culture. It is far more important.
If you had to buy the rare Ferrari or Porche, whatnot, you may want to get creative with funding to make that happen. No, advertising rates have not gone up, but what has gone down perhaps is the massive value of back catalogues networks have, different programs they've accumulated. And things of that nature outside news, reality tv, and live sport. Those things will just command more time/resources from the networks. So in that manner, the funding will be found. They'll simply pay the funds to the thing that generates them and take it away from the areas that don't generate much. Sure, its more complex and nuanced than that - but thats the jist.
This is capitalism. It levels like water in the end. The story is: sport IS valuable, its under valued as it is now. Imagine in 5 years it will be more valuable again. 2011 and 2012 were then. This is now.
So, no, it won't be undersold -- and no one in their right mind would wish to underpay for it too much. I can assure you. Everyone must swim in the river of plenty. I dont know how the contracts will pan out, but I do know both sides will be perceiving for the first time "value" they had never seen before. I think a way different torch light will be shone on this deal than the previous.
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Thats just the value side of things. Then if you talk compromises you might be shaving certain amounts off the final price. But it should still prove very high. Being such a large sum of money, one could expect to see a large amount of haggling.
I just wish for channel 9 to bite the simulcast bullet. I think the advantages outweigh the negatives. This is the day and age of options and structured [tv] tiers afterall. While sport is becoming more important, I do think traditional networks will have to increasingly slot-in to a wider gamut of viewing options. But the fork in the road they are at right now, they may wish to maintain their stranglehold as much as possible, though some ground may be conceded eventually, they would do well to work with the grain.
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An example of working with the grain. So channel 9 for example, they have Stan or some such. Why can't the NRL appear on that eventually at times, as part of a showcase or example of technology to start with (proof of concept, ect) and then they could sell that to the customer. And from that sale, or some profits, ch9 retain some, and the NRL retain some. So they can make back (from multiple parts of the market) the money they have had to spend to acquire the rights. In return for this, maybe the NRL could set some programming standards regarding commentators or things of that nature. Its all give and take.
Thats but one example of a new revenue stream. It could supplement rights costs. I am not sure how Telstra/NRL media would feel about that, but hey, the future can be changed at some point. Maybe it could be a venture, or a production bought from NRL media?
Its reaching new [digital] viewers.... and then the NRL has its website, so Im hoping those restrictions are released. The advantage of stan is (not sure if they need a dongle, I only ventured with presto) but in that way, it would be able to appear on a big tv screen.
Thats could be the point of differentiation- mobile service versus TV screen-sized service. Unless Stan goes to both, which I think it does, and may mean a restructure there. But thinking outside the box is way more approachable during this deal....
so.....to end this long post...with all the new things available at this point and time, you can see (I hope you followed!!!!),,,, but you can see why I said "they will realize value they never saw before"....
and why I concur with The Doctor that those vast sums of money are not unreasonable. The creative types/negotiators just need to find ways.
And this is before we start getting into the money that the 9s and other competitions factored into the current deal generate but the nrl is not getting paid for. So there's plenty in this complex deal to see emerge/evolve over time.
