Why a second Brisbane team could be the key to the NRL's pay TV negotiations
A second Brisbane team could add up to $200 million to the value of the overall broadcast rights and enable the NRL to do a deal with Fox Sports that rivals the AFL's.
That is the view of those involved in negotiating sports rights, broadcasting and consortiums preparing to enter a team in the NRL if the competition is expanded beyond 16 teams in coming years.
While there are fears that the NRL will not be able to get another $1.1 billion for the pay TV, digital and overseas rights to match the AFL's $416 million per year deal after selling four matches per week to Nine for $925 million over five years, there is speculation that News Corp wants an extra game to maintain the five matches Fox Sports currently broadcasts each round.
In order to provide nine games per week, the NRL would need to expand the competition to 18 teams by 2018 with the introduction of a second Brisbane team and another team, likely to be based in either New Zealand or Perth.
NRL chief executive Dave Smith strongly indicated to Fairfax Media during an interview last week that no new teams were likely to be added until the existing 16 clubs were financially strong but others believe the creation of an extra game each week would significantly increase the value of the broadcast rights.
"The NRL has got to get from Telstra and News Corp $1.1 billion or more and on what is available to offer them that is going to be tough," said Global Media and Sports chief executive Colin Smith, who was involved in negotiating the NRL's current broadcast deal.
"The grand final between the Broncos and the Cowboys reinforced how popular rugby league is and when you add State of Origin it is clearly a premium sport up there with AFL but what the NRL has done is sell all of the main content before they have got competitive rivalries to work across all of the [broadcasting] platforms.
"I would be.absolutely certain that News and the NRL will come to an arrangement. The question, though, is at what price? Whilst I am certain a deal will be done it is worth a lot less to Fox Sports than it was before because they have lost Super Saturday and they have lost Monday Night Football.
"The NRL has to think differently and if you think about State of Origin, if you think about television audiences, the solution to me is to have another team in Brisbane.
"If you had a second Brisbane team it means that you have got a live game in Brisbane every week and with the focus of the AFL now on the northern states I think it is even more important that the NRL address this for the future success of the game."
The grand final was the third-most-watched television program of the year behind Origin II and Origin I, with an average national audience of 3.667 million viewers, including 952,000 in Sydney, 788,000 in Brisbane, 433,000 in Melbourne, 152,000 in Perth and 1.230 million in regional NSW and Queensland.
An additional 141,000 viewers tuned in from 9.30pm in New Zealand, where the rights are valued by the NRL at about $30 million per year but could be worth more if there was a second team based in Wellington.
Other bid teams include Brisbane Bombers, Western Corridor (Ipswich), Central Queensland, Brothers Leprechauns, West Coast Pirates and PNG Hunters.
Nine boss David Gyngell has publicly supported a second Brisbane team and a provision was included in the new free-to-air broadcast deal enabling that to occur between 2018 and 2022.
Bombers bid team chairman Craig Davidson believes a second Brisbane team to rival the Broncos would add $200 million to the value of the broadcast rights - a figure that easily exceeds the estimated $10 million-$12 million in grants the new club would receive each year from the NRL.
"David Gyngell has confirmed not in dollar figures but certainly that he sees a lot of value in a second Brisbane team and I have got absolute confidence in the NRL that they will make a decision based on commercial common sense," Davidson said.
"They won't be scared to put a second team in Brisbane and we have got our business plan done and our model done to the point that if they come out with a tender we will be ready to put up a team."
Fairfax Media has been told that the NRL would be likely to consider expansion if the value of increased broadcast rights significantly outweighed the cost of extra teams.
With NRL head of strategy Shane Richardson having finalised a 106-page report on his "Whole of Game Review", there will be much interest in the outcome of his presentation to the ARL Commission later this month.
Despite speculation that News Corp has not had any formal discussions with the NRL about the pay TV rights since the deal with Nine, Fairfax Media this week reported that Smith and outgoing News chief Julian Clarke have continued to engage about the rights package directly.
