News spurns NRL over broadcast rights
The Australian
October 05, 2015 12:00AM
NRL CEO David Smith, left, shares a joke with Jimmy Barnes as they pose for a photograph with Broncos and Cowboys players last week. Source: AAP
News Corp has not held formal talks with the National Rugby League’s top brass about a new broadcasting rights deal, eight weeks after discussions were abandoned by the media company in the wake of a deal with Nine.
The Australian Rugby League Commission, the code’s governing body, has been left in limbo after News Corp decided to put talks on ice until after last night’s Grand Final at Sydney’s ANZ Stadium.
The bidding process was postponed by News Corp in the wake of NRL chief David Smith’s controversial decision to strip the top-rating Saturday and Monday matches from sports broadcaster Fox Sports, which is wholly owned by News Corp.
Mr Smith awarded the matches to Nine Network in a $925 million agreement, gambling he could wrest a record deal by selling the remaining four NRL games per week to Fox Sports for a fee he hoped would bring the total value of the rights for the next period to at least $1.7 billion.
NRL chief executive David Smith’s risky tactic in his TV rights negotiations has come down to whether News Corp sees any remaining value left on the table.
And News Corp sources are insisting that there is absolutely no chance of the company matching the price Fox Sports paid under the current deal after losing two key franchises: Super Saturday and Monday Night.
If Fox Sports, which paid $530 million for five exclusive matches from 2013-17, elects to buy only four live games this time, the NRL’s broadcast income for the 2018-22 period won’t even get close to the $1.7bn target.
There remains a significant gap between Mr Smith’s plans and the price News Corp is prepared to pay, which would leave him in the difficult position of having to explain to disaffected clubs how it happened, when the code owns four of the 10 highest rating television shows in Australia last year, including the Origin series and the Grand Final.
It remains unclear whether there are any other serious, credible bidders in the running. ARLC chairman John Grant has privately told associates the code made a mistake by allowing Mr Smith to leave Fox Sports out in the cold.
The NRL also angered Telstra by selling the telco’s streaming rights to Nine with no advance warning.
Telstra is still yet to re-sign a lucrative title sponsorship contract with the NRL — worth $100m over five years.
It’s understood Mr Grant is losing faith in his chief with clubs bracing for a possible change at League Central as they try to win significant increases in funding out of Mr Smith.
News Corp executives will open talks by insisting the NRL reverse its controversial decision to strip the top-rating Saturday evening match from Fox Sports.
While Nine chief David Gyngell is pleased with the terms of his deal, which secured Nine the four best games in each round, he has not ruled out surrendering the rights to this match. Any move to hand the Saturday match back to Fox Sports requires Mr Gyngell to sell the wholesale rights back to the code.
In response to questions submitted by The Australian, a spokesman for the NRL issued a one-line statement, but refused to comment any further: “As is our practice we won’t comment on an ongoing process other than to confirm your assertions are wrong,” the spokesman said.
