The Federal Court appeal panel's ruling protecting the NRL's right to sell live streaming has increased the code's chances of securing $1 billion-plus in broadcast rights. Roy Masters examines the opportunities for the broadcasters and NRL as bidding begins.
CHANNELS Seven and Ten can start bidding for rugby league broadcasting rights next week, following the end of the three-month exclusivity period of holders Nine and Fox Sports.
Seven is expected to be a serious bidder if the network is to achieve its ultimate aim of dominating the TV landscape by owning the two top-rating channels, meaning that its digital channel, 7Mate, outrates the main channels of Nine and Ten.
It can achieve this by owning the rights to both AFL and NRL.
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With a panel of the Federal Court yesterday upholding an appeal by Telstra, the NRL and AFL to protect live streaming rights, the enshrining of those rights will provide added value to the NRL and AFL contracts.
Seven shows four AFL games on its principal channel in southern and western states, and telecasts the same games on its digital channel in the northern states.
If Seven also held the rugby league rights, it could reverse the process, showing NRL on its main channel in NSW and Queensland and beaming these games on its digital channel into Victoria, South Australia, Western Australia and Tasmania.
Seven would then have control over advertising rates in Australia's two most popular winter sports, charging a premium for companies seeking commercial packages with both. Television's ''halo'' effect, where viewers stay tuned once the football is over, allows it to charge higher rates on other programs.
Nine and Fox Sports have formed a shaky combination to bid for NRL rights, while Seven and Foxtel made a successful joint bid for AFL last year.
Should Seven outbid Nine for NRL free-to-air rights, Seven could do a deal with Fox Sports where the pay TV sports production company bought some of the games.
Nine pays $45 million a year for three games of league a week; Seven pays $84 million for four AFL games.
The AFL's total broadcast income, including payments from Foxtel to show all nine games live and Telstra's online rights, is $1.25 billion.
Whether league receives a similar amount depends on the value broadcasters place on the codes.
1
Rugby league outrates AFL on combined free-to-air and pay TV audiences but it needs State of Origin football to do so. The three Origin games draw a total of 11 million viewers a year and always appear in the annual top 10 programs.
2
Rugby league is a better product on TV than Australian football, where the fan must attend the game to appreciate the full experience. The 13-a-side code has the TV cameras focusing on the ruck and showing the parallel attacking and defensive lines, while the AFL viewer often can't see the ball or the man to whom the kick is directed. This partly explains why AFL crowds are bigger. Pay TV chiefs have sometimes cited, though, the AFL's larger crowds justify higher rights fees.
3
The AFL has nine games compared with the NRL's eight but at least three of the AFL games each week are one-sided, with new clubs, the Gold Coast and Greater Western Sydney easybeats, while Melbourne are perennial cellar dwellers. The NRL season is nearly a month longer, and results are unpredictable.
4
AFL games have four quarters and last two hours while rugby league games are two halves of 40 minutes. This means more opportunities for commercials in AFL games. However, the NRL has been busy working on increasing the number of commercials per game, such as an ad following a sideline kick and another following a goal attempt.
5
The AFL has higher five-capital-city ratings than the NRL, which has a stronger regional following. It means Seven can charge higher rates for ads in, say, Perth than a regional network can levy advertisers in say, western Queensland. Seven also has a nationwide network, while Nine owns channels in only Sydney, Brisbane and Melbourne. Nine receives about one-third of the revenue generated by games in regional areas. While this means AFL's free-to-air revenue should be higher than NRL, rugby league's big following in regional and rural NSW and Queensland could be a future bonanza for the code. Foxtel has acquired Austar, and sees significant subscription growth if it can convince league lovers in the bush they should sign up.
6
Sixty per cent of the national advertising dollar is spent in NSW and Queensland where the NRL has 14 of its 16 teams. This was the motivation for the AFL to introduce the Giants and Suns. Before this, the AFL had only two teams (Swans and Lions) in the north and 14 of its 16 teams in the market providing only 40 per cent of the advertising spend. A second Brisbane NRL team would add significantly to rugby league's rights fees. Where can the AFL expand? Hobart? It already has all of Tasmania's eyeballs.
7
Rugby league has a viable international game, while the AFL's hybrid match with Ireland is not a serious product. The Australia-New Zealand Test match, shown on delay from Auckland, recorded fabulous ratings - 526,000 in Sydney, 365,000 in Brisbane and 615,000 in regional NSW and Queensland. The NRL also has access to the New Zealand market for seven months via the Warriors.
8
The AFL's $1.25 billion deal included a $150 million Telstra payment for online rights. Yesterday's appeal panel decision implies the NRL should receive the same.
9
AFL's pre- and post-game shows are superior to the NRL's. When broadcasters are buying rights, they are also acquiring access to players and coaches. Even non-rights holders, such as Nine and Ten, have AFL programs. This reflects the inferior quality of league TV commentary.
10
Rugby league has the big media players as fans - James Packer, Lachlan Murdoch and David Leckie. This hasn't helped because the Packer family and News Ltd believed they own the code. Serial underpayment for league rights will make it difficult to make the leap from $500 million to $1 billion, compared with the AFL's jump from $780 million to $1.25 billion. There have been media changes that might benefit rugby league. Packer and Murdoch have equity in Ten in conjunction with their stakes in Fox Sports. Seven owner Kerry Stokes is an AFL man but will back his chief executive, Leckie, on league. New appointments at the top of Foxtel and Fox Sports should also help league, particularly the departure of Kim Williams, now head of News Ltd. Williams believed AFL's more wholesome image warranted higher rights fees.
