- Messages
- 77,628
Ch9 are trying the weazel their way into gaining the NRL digital rights for f**k all.
'Two-billion-dollar asset': Don't sell digital arm, Grant warns NRL
Roy Masters
Social distancing in order to kill off COVID-19 is short-term pain for long-term gain. Selling NRL.com is the reverse.
The Herald reported on Saturday that Nine Entertainment Co, the NRL’s free-to-air broadcaster, is interested in acquiring the NRL’s digital arm as part of a strategy to lower costs and renegotiate the existing broadcast deal.
Foxtel is also the NRL’s pay TV partner but Nine, owner of this masthead, has a stronger balance sheet.
The challenge for the networks is that advertising is way down as a result of the pandemic and, with no major sport, subscribers are cancelling Foxtel and Kayo.
In New Zealand, the NRL broadcaster is the listed SKY NZ. It was once the most profitable broadcaster by margin in the world. Today, it has a market cap of $61m, signed a dud deal with NZ rugby and is leaking subscribers.
But NRL is not a dud sport in Australia. Nine can boast that four of the top five programs nationally and annually are rugby league, yet now complains it costs too much to buy the rights and produce the games. It anticipates empty stadia will cause a fall in TV audiences.
Nine’s attack last month on the NRL’s “bloated” administration cost structure may well have been a ploy to relieve V’landys of the expense of employing 70 staff in the NRL’s digital arm in exchange for acquiring a potentially valuable property.
Grant was always confident NRL.com could be worth $1 billion and hasn’t changed his position. In fact, it’s the only issue that will draw him into making a comment.
He argues that NRL.com is an extension of the strategy that started in 2012 with the removal of Fox Sports and Nine’s first and last rights over broadcast through until 2027. This, he says, returned sovereignty to future rights negotiations and, as the Australian viewing audience becomes more wedded to streaming, a global provider may offer the seed capital to fund NRL.com to a point where it streams games, such as the Junior Kangaroos versus France match on its website last year.
Former ARLC chair John Grant lost his job over the $150 million funding of NRL Digital, which put clubs offside.CREDIT:LISA MAREE WILLIAMS
Grant calculates that if the NRL converted half its existing 1.6 million digital customers into $25-per-month subscribers, and had a free-to-air broadcaster pay a fair but lesser price than Nine pays now - plus monetises other available revenue streams - it could produce annual revenue of over $360m with advertising offsetting production costs.
“That’s almost $2b over five years, and any asset capable of generating this sort of cashflow is a very valuable asset,” Grant said.
“Also, the NRL is in a good position to start with a restructure of the costs in the game. Right now, the ARL Commission has a very big decision to make. To sell or not to sell NRL.com! I just hope that before the die is cast, the good people on the commission, led by what has, to date, been a very capable and strong Peter V'landys, do the numbers and make the right decision for the game’s future. The opportunity to retain sovereignty over this future and to redefine the game’s cost structure and its relationship with the media is very enticing.”
But Nine clearly want exclusivity of product and acquiring Nrl.com is the cheapest first step. Nine will also want to release the network from its simulcast arrangement with Foxtel, where Nine’s 7.30pm Friday viewership is undermined by Foxtel subscribers staying with the network at the conclusion of the 6pm game.
Advertising revenue is split among the multiple platforms on which NRL viewers can watch games: Nine’s two channels, Foxtel’s three and NRL.com in partnership with Telstra.
The NRL’s Annual Report points out that its digital arm has been developed and run in partnership with Telstra, the NRL’s sponsor.
Telstra own 35 per cent of Foxtel who would also be interested in acquiring NRL.com. The Australian-owned telco, which has been ignored in the media coverage of V’landys' battles with broadcasters, would have something to say on Nine owning NRL.com.
https://www.smh.com.au/sport/two-bi...ital-arm-grant-warns-nrl-20200503-p54pcb.html
'Two-billion-dollar asset': Don't sell digital arm, Grant warns NRL
Roy Masters
Social distancing in order to kill off COVID-19 is short-term pain for long-term gain. Selling NRL.com is the reverse.
The Herald reported on Saturday that Nine Entertainment Co, the NRL’s free-to-air broadcaster, is interested in acquiring the NRL’s digital arm as part of a strategy to lower costs and renegotiate the existing broadcast deal.
Foxtel is also the NRL’s pay TV partner but Nine, owner of this masthead, has a stronger balance sheet.
The challenge for the networks is that advertising is way down as a result of the pandemic and, with no major sport, subscribers are cancelling Foxtel and Kayo.
In New Zealand, the NRL broadcaster is the listed SKY NZ. It was once the most profitable broadcaster by margin in the world. Today, it has a market cap of $61m, signed a dud deal with NZ rugby and is leaking subscribers.
But NRL is not a dud sport in Australia. Nine can boast that four of the top five programs nationally and annually are rugby league, yet now complains it costs too much to buy the rights and produce the games. It anticipates empty stadia will cause a fall in TV audiences.
Nine’s attack last month on the NRL’s “bloated” administration cost structure may well have been a ploy to relieve V’landys of the expense of employing 70 staff in the NRL’s digital arm in exchange for acquiring a potentially valuable property.
Grant was always confident NRL.com could be worth $1 billion and hasn’t changed his position. In fact, it’s the only issue that will draw him into making a comment.
He argues that NRL.com is an extension of the strategy that started in 2012 with the removal of Fox Sports and Nine’s first and last rights over broadcast through until 2027. This, he says, returned sovereignty to future rights negotiations and, as the Australian viewing audience becomes more wedded to streaming, a global provider may offer the seed capital to fund NRL.com to a point where it streams games, such as the Junior Kangaroos versus France match on its website last year.
Former ARLC chair John Grant lost his job over the $150 million funding of NRL Digital, which put clubs offside.CREDIT:LISA MAREE WILLIAMS
Grant calculates that if the NRL converted half its existing 1.6 million digital customers into $25-per-month subscribers, and had a free-to-air broadcaster pay a fair but lesser price than Nine pays now - plus monetises other available revenue streams - it could produce annual revenue of over $360m with advertising offsetting production costs.
“That’s almost $2b over five years, and any asset capable of generating this sort of cashflow is a very valuable asset,” Grant said.
“Also, the NRL is in a good position to start with a restructure of the costs in the game. Right now, the ARL Commission has a very big decision to make. To sell or not to sell NRL.com! I just hope that before the die is cast, the good people on the commission, led by what has, to date, been a very capable and strong Peter V'landys, do the numbers and make the right decision for the game’s future. The opportunity to retain sovereignty over this future and to redefine the game’s cost structure and its relationship with the media is very enticing.”
But Nine clearly want exclusivity of product and acquiring Nrl.com is the cheapest first step. Nine will also want to release the network from its simulcast arrangement with Foxtel, where Nine’s 7.30pm Friday viewership is undermined by Foxtel subscribers staying with the network at the conclusion of the 6pm game.
Advertising revenue is split among the multiple platforms on which NRL viewers can watch games: Nine’s two channels, Foxtel’s three and NRL.com in partnership with Telstra.
The NRL’s Annual Report points out that its digital arm has been developed and run in partnership with Telstra, the NRL’s sponsor.
Telstra own 35 per cent of Foxtel who would also be interested in acquiring NRL.com. The Australian-owned telco, which has been ignored in the media coverage of V’landys' battles with broadcasters, would have something to say on Nine owning NRL.com.
https://www.smh.com.au/sport/two-bi...ital-arm-grant-warns-nrl-20200503-p54pcb.html
