Next TV rights deal

[El Diablo]

Just finished reading the most recent edition of Mediaweek http://mediaweek.com.au

Interesting comment about how the AFL are looking at a 10 year contract for their next deal. I wonder how well that may work for the NRL?

http://www.theage.com.au/afl/afl-ne...0year-afl-broadcast-deal-20140826-108ni8.html

However, industry speculation is that Ten has a greater chance of securing a piece of the NRL rights, having failed in this bid in 2012.

 

[DC_fan]

10 years is a long contract. Do both parties get full value?

 

[El Diablo]

no idea

 

[taipan]

Used to buy the Australian daily @$2-20 per copy.On Tuesday told it went up to $2-50.They can get knotted ,that's $11 per week they don't get from moi.Further diminishing print income.

 

[Lockyer4President!]

A ten year deal suggests they might not be expecting much growth and just want stability with all of their expansion teams failing.

 

[Starkers]

a 10 year deal would pretty much cement the near term futures of GWS and GC in the afl. but to pay a 10-20% premium for it, as the article suggests, is expensive. if they achieved $400m per season it would be enormous. they could grant $20m salary caps to all clubs and still support GWS and GC to the tune of $20m per season in handouts on top.

 

[Perth Red]

Got to remember as well that much of the money for supporting GWS and suns as well as other struggling clubs comes from the rich clubs as much as the afl pockets. Ticket tax and inequitable grant distribution are funding them as much as the TV deal.

 

[j5o6hn]

Interesting that the article was on about the 650000 FTA 5 city spread of viewers,no breakdown of actual TV viewers in Sydney Regional NSW Brisbane and regional Qld,for AFL & NRL
I think the viewers in WA on Gem are growing slowly ranges from 3000 to 30000 & over 100000 for SoO,anyone know the breakdowns for NSW QLD?

 

[Starkers]

perth red - well i don't know exactly where all the money comes from, but just on tv rights, their total media rights package was $1.256b over 5 years (i think?). that's $251.2m per year or just under $14m per club. next year the afl salary cap is increasing to $10m http://www.afl.com.au/news/2014-06-05/salary-cap-safeguards-for-players-confirmed

now, that article is suggesting the upper limit for media rights will be a 10 year $4b deal, which is $400m per season and about $22m per club ... or a 60% rise on the current deal for a ten year period, with 10-20% of that being due to the tenure of the contract.

fanciful i think, given they get 650k FTA and ch7 seems to be paying the bulk, but if it happened it would be f**ken huge. god help us.

 

[Nerd]

The 10 year TV deal if it's true sounds like a desperate move to me by the AFL. They've already played the expansion card which was a dismal failure so I suppose this is an attempt to force the next deal up by other means. With the speed that technology is moving at the moment you would imagine that any organisation would balk at committing to such a long term deal.

To be honest, with subscription growth in AFL states not matching the extra revenue they received from Foxtel you would think that it is already fully priced. To suggest that they will get an extra 22% just sounds financially unsound.

 

[Starkers]

can't see it either personally, but they seem to continue being paid above fair value, so i don't think you can write it off as no chance. best case scenario for the NRL is that the AFL gets a modest increase and no change in broadcasters; the NRL deal then goes across Ch9 & Ch10 all live FTA and simulcast live on Fox for something like $1.5b.

 

[carlosthedwarf]

A ten year deal suggests they might not be expecting much growth and just want stability with all of their expansion teams failing.

Also they may be under the assumption that escalating rights fees is not going to last forever, and want to make sure they're not left in trouble if in 2022 TV stations aren't paying big bucks for live sport.

 

[Lockyer4President!]

Any mention in the Mediaweek article about the NRL and AFL looking at having more control over their online streaming/app viewers and moving towards something like what the NFL/NBA have (single sign-in regardless of platform, built-in apps on tv's etc)?

 

[El Diablo]

http://www.theaustralian.com.au/med...lliondollar-deal/story-e6frg996-1227043075578

AFL closes in on billion-dollar deal

The Australian
September 01, 2014 12:00AM

THE Australian Football League is weeks away from blowing the siren on TV rights negotiations for a new billion-dollar deal, with an ambitious goal of surpassing the current record $1.258bn package.

AFL chief executive Gillon McLachlan is believed to be confident as he prepares to open negoti*ations with broadcasters after the grand final on September 27, but the main commercial television networks have privately played down league expectations of *another massive jump in the value of the rights.

The networks believe the recent price escalation in sports rights is no longer economically viable as the AFL fast-tracks the next round of negotiations so that it has the capital to buy out Melbourne’s Etihad Stadium.

A league spokesman declined to comment.

Mr McLachlan is said to be aiming to clinch a new deal for the 2017 season onwards during the early rounds of next season in March or April.

As the current rights holders, Kerry Stokes’s Seven Network and pay-TV operator Fox Sports will again be frontrunners, as will National Rugby League rights holder the Nine Network, if only to bid up the price Seven could pay to renew its contract.

A factor limiting Nine’s interest is its commitment to the NRL. If Nine overplays its hand with the AFL, it could give Ten an advantage when rights came up for the NRL, which Ten is preparing to have a tilt at.

Ten has a genuine interest in broadcasting AFL games, and may partner with one of the other networks to split the rights.

Ten chief executive Hamish McLennan is an aggressive bidder. after buying sports rights including cricket and V8 Supercars.

Although competition tension will guarantee the AFL a decent chance of matching the last contract, the networks believe sports rights inflation has peaked, particularly while they continue to operate under gloomy conditions in the advertising market.

Last week, Seven and Nine warned that advertising expenditure, their main source of revenue, would grow no more than 2 per cent this year, contrary to a bright forecast at the start of the year.

Globally, the price of premium sports rights has increased by about 6 per cent, but after Cricket Australia secured a record $550 million agreement last year, sports rights inflation in Australia has fallen away.

The International Olympics Committee, Commonwealth Games and V8 Supercars all failed to achieve a big spike in the value of their media rights. To counter this, the league may follow the trend internationally for longer media contracts, often running out to 10 years. The league can also charge more for the digital rights held by Telstra, which have become more sought-after in a digital media world where audience habits are changing rapidly.

It is believed Mr McLachlan is not preparing to hire an outside consultant to assist with the tender process. If he needs help turning the screws in the rights process, he has former News Corp Australia chief executive Kim Williams as a fellow AFL commissioner and former Foxtel sports executive Peter Campbell running the league’s *internal media division.

 

[taipan]

Looking on the bright side.Ch7/Fox will retain the Fumbleball ,of that I have no doubt.10 years /$400m pa who knows who cares.
Their code needs to get more having a far bigger playing list than rugby league(NRL).

Regardless, nein and ch10 will fight over the NRL.No F&L rights deal to hinder,and 10 anxious for a topline ratings drawcard.If the NRL can't crack min $300m pa with an expanded 18 team comp,Perth & Brisbane 2,then the fumblers have no chance of $400m pa.
Furthermore believe there will be more Sunday arvo games next time.Smith and Grant admitted they were hamstrung to do any better on the current deal.Thanks to Gallop's poor negotiating deals prior.

 

[insert.pause]

The NRL have a funny way of trying to grow the game in Australia and I hope it's the next thing on the agenda for Smith because there is currently half the country being underleveraged by the game while also allowing competitors free reign.

The fact they are allowing 9 to broadcast games at a stroke before midnight when they are apparently contractually obligated to air games live on secondary channels is a complete disgrace and is turning away any potential fans that in 3 years time could be exploited in rights negotiations.

The game needs to figure out a serious plan for what it wants to look like in 10-20 years time because they are too uneven atm.

I think Smith should seriously consider hiring an executive solely in charge for growing the game in the southern states and resource them properly because it is getting lost in Smiths (much needed) reform agenda. They need a voice like the QRL and NSWRL because those bodies were never supposed to exist under the ideal independent commission model.

 

[insert.pause]

Looking on the bright side.Ch7/Fox will retain the Fumbleball ,of that I have no doubt.10 years /$400m pa who knows who cares.
Their code needs to get more having a far bigger playing list than rugby league(NRL).

Regardless, nein and ch10 will fight over the NRL.No F&L rights deal to hinder,and 10 anxious for a topline ratings drawcard.If the NRL can't crack min $300m pa with an expanded 18 team comp,Perth & Brisbane 2,then the fumblers have no chance of $400m pa.
Furthermore believe there will be more Sunday arvo games next time.Smith and Grant admitted they were hamstrung to do any better on the current deal.Thanks to Gallop's poor negotiating deals prior.

The difference between broadcast revenue of the two codes under their current rights agreements is only like 13M annually or 65m over 5 years, the difference in next deals are likely to be negligible, especially considering the NRL f&l has been removed. So a 100M p.a. difference is not going to happen.

 

[CC_Roosters]

Does the current nrl deal expire in 2017 or 2017? I am praying for a change in network or at least split Fta coverage

 

[insert.pause]

Does the current nrl deal expire in 2017 or 2017? I am praying for a change in network or at least split Fta coverage

Yes:sarcasm:

end of 2017.

 

[Starkers]

i would think starting the bidding process for the AFL rights after this years granny is pretty early. they don't begin until 2017. has there been enough value added to allow a clear projection of growth in the rights? what happens if the next two years turns to shit?