The T.V Rights Thread Part III

[Cheesie-the-Pirate]

income and revenue are definitely the same thing.

They're similar, but not the same. Revenue is a type of income. Gains (such as foreign exchange or property valuation) are also income but are not revenue.

Gross Profit is the profit BEFORE expenses.

Gross profit is the profit before operating expenses (i.e. those expenses that are not part of the cost of sales) and tax.

 

[Cheesie-the-Pirate]

I didn't say you were a troll, but if we allow anyone to post that type of info without links, then we can hardly just make sure the trolls do.

And the Parra link still doesn't work.

http://www.parraleagues.com.au/ContentFiles/ParraLeagues/Documents/parramatta%20leagues%20A4%20annual%20report%202011.pdf

 

[Cheesie-the-Pirate]

And its not just the AFL's revenue that dwarfs the NRL's, but its the indivudal clubs themselves as well. I'll take the two clubs I support as examples:

Hawthorn (2010) Parra (2011)

Merchandise $2.5m $1.5m
Marketing/Sponsorship $12.5m $5.4m
Membership $7.5m $2.5m
Bar & Bistro $4.6m $5m
Matchday Inc $5m included above
Totals $32.1m $14.4m

I've excluded the pokie revenue earn't by the Eels leagues club and the grants from the NRL/AFL (plus the smaller misc income items), but looking at the above, its quite obvious that the TV deal is only the first step our game needs to take in trying to maximise its revenue streams.

sorry guys, crap formatting

While it's definitely true that the size of the revenues and expenses of the football departments of a typical AFL and a typical NRL club are very different and greatly in favour of the AFL, the comparison is a little misleading because you're including Hawthorn's gaming revenue and not including Parramatta's. Doesn't really make a significant difference to your comparison, but is a little misleading fundamentally because it's quite difficult to distinguish meaningfully between football and non-football revenues.

Most interesting to me is that Parra Leagues made a $5m profit last year. That's a huge turnaround from a couple of years ago when they copped a going concern audit opinion.

 

[carlosthedwarf]

Well I'm not even sure where to begin with this one.

That said I do question the source of the negativity - and if any of you want to challenge the logic of this feel free - but chiefly the source of that negativity being the networks crying poor and citing a tough climate.

Is there a particular reason why the networks would want to cry poor?

Is there a particular reason why the networks would want to drive the price down during the bid?

As for this scoop -


Stop the presses!


Honestly, this one's scraping the bottom of the barrel.


God knows how long ago I said this - if I searched the forum hard enough I could find it - but I'm actually hoping 9 & Fox put in pissweak opening bids.


I dare them. No wait, I double dare them. :lol:

Terrible reporting. Crying poor and trying not to publicly inflate the price is just negotiating 101.

 

[Cletus]

While it's definitely true that the size of the revenues and expenses of the football departments of a typical AFL and a typical NRL club are very different and greatly in favour of the AFL, the comparison is a little misleading because you're including Hawthorn's gaming revenue and not including Parramatta's. Doesn't really make a significant difference to your comparison, but is a little misleading fundamentally because it's quite difficult to distinguish meaningfully between football and non-football revenues.

Most interesting to me is that Parra Leagues made a $5m profit last year. That's a huge turnaround from a couple of years ago when they copped a going concern audit opinion.

Yeah its annoying to hear 14 clubs are making a loss while ignoring the leagues clubs. One area where the AFL clubs are ahead is the way the AFL do their stadium deals. Paying a few million for management rights and eventually owning Etihad is really going to help them in the future, not to mention ducking ANXIOUS as a league ground for a few million.

 

[PaddyBoy]

Yeah its annoying to hear 14 clubs are making a loss while ignoring the leagues clubs. One area where the AFL clubs are ahead is the way the AFL do their stadium deals. Paying a few million for management rights and eventually owning Etihad is really going to help them in the future, not to mention ducking ANXIOUS as a league ground for a few million.

It was a creative figure when they were trying to get more money from the NRL. I bet they'd change tune pretty quick if you said "any team operating at a loss will be docked competition points". The majority would suddenly be doing pretty well for themselves.

 

[Ray Mosters]

God knows how long ago I said this - if I searched the forum hard enough I could find it - but I'm actually hoping 9 & Fox put in pissweak opening bids.

I dare them. No wait, I double dare them. :lol:

It was part of a discussion in one of the earlier incarnations of these threads about breaking the first and last rights.

I wonder... theres been a pretty concerted effort to cry poor by 7 and 10 in the last few weeks... in the lead up to the 9 and Fox opening bid(s). If they are foxing, trying to draw a low enough first bid such that they can break it with a 20% higher next bid...then everything changes.

The league can then negotiate a proper deal with whomever they wish, in whatever configuration is best, with no detailing to the original bidder details of the competing bids...and get the maximum amount.

Its a massive longshot, I just dont see it happening... but who knows.

 

[Cletus]

It was a creative figure when they were trying to get more money from the NRL. I bet they'd change tune pretty quick if you said "any team operating at a loss will be docked competition points". The majority would suddenly be doing pretty well for themselves.

Or any team making a loss was going to be booted from the comp. It's good to see Parra leagues making a profit though because the pokies tax was supposed to kill the leagues clubs.
One thing I don't understand is how poorly Penrith FC are going financially considering how huge their leagues club is.

 

[El Diablo]

love all the experts at bigpoofy http://www.bigfooty.com/forum/showpost.php?p=24057231&postcount=651

this guy is always on about RL :lol:

 

[whall15]

As I said, never underestimate the stupidity of the Australian public as the Voice is still rating it's tits off no doubt it's paying off some of Nine's bills.

 

[Karl]

All I hear from within the industry is how tight money is with the TV Stations. Channel 10's EBITDA is down about 40% in the first half of 2012 compared to 2011. 7 hide behind consolidated reporting, but TV EBIT is down 7% on last year, 9 has huge debt, is struggling for ratings and hoping the Olympics is HUGE for them, 7 has been thumping them in the ratings, 9's owner is a private equity group, CVC Asia Pacific, and they are stretched badly.

I have no idea where everyone thinks a TV Rights deal for 1 Billion to 1.4 Billion dollars is getting funded from, or how sustainable it is. A Billion Plus Dollars is a lot of cash for a station already under about 3.6 billion dollars in debt and where just a few months ago there was a lot of speculation about whether they could even roll the facility.

 

[carlosthedwarf]

They're losing money but live sport is still one of the few properties that can deliver strong ratings and advertising.

 

[Kirky]

I think people are also forgetting that networks don't just hand over a cheque for $1billion as soon as the contract is signed. The payment is spread out over 5 years. It's not like Nine/Seven/Ten would have to come up with the entire amount upfront.....

 

[Karl]

Sure, but not at any price, not when there is a finite amount of cash in the bank and all of it's debt. If they overpay and it all goes pearshaped, the current Board will be in deep trouble and don't think they're not aware of that possibility.

Everyone seems to think there's going to be this more than doubling of the current deal but I'm not sure anyone is looking at the fiscal realities of the situation. Eggs are being counted as chickens all over the place.

And no, they don't fund the Billion upfront, but what is the loading? How do they cashflow it 'cause I doubt they can borrow anymore. And 200 to 250 Million dollars a year is a lot of revenue to find when you're on the slide, massiviely in debt, leveraged to the hilt and you're talking about doubling the cost (or more) of just one rights deal while running around trying to cut the guts out of everything else.

 

[Canard]

Right on cue the Union troll and Paul Pottinger apologist makes his impact on this thread.

There certainly is a shit load of chicken counting going on in this thread, but be f**ked if Ill take any input from a died in the wool Union fan about it.

 

[docbrown]

Is that 9&Fox bid mentioned in the SMH article for F&L rights or for the simulcast option?

The less than $1 billion one? That's the value he's predicting for the two individual bids.

What strikes me is that 9 were going hell to leather talking about simulcasting and if I recall correctly even said they'd put it in the first deal submission.

You can probably interpret the fact that they're now not doing that in a number of ways but my best guess is that Fox Sports don't want to be tied solely to 9 for obvious reasons. I guess you can read into that what you want about it but it does make me think that Fox Sports aren't 100% confident that 9 will end up with the F2A rights.

Terrible reporting. Crying poor and trying not to publicly inflate the price is just negotiating 101.

The only truly important number to get excited about in this process is the one that's on the line above David Gallop's (and I figure John Grant's) signatures.

It was part of a discussion in one of the earlier incarnations of these threads about breaking the first and last rights.

I wonder... theres been a pretty concerted effort to cry poor by 7 and 10 in the last few weeks... in the lead up to the 9 and Fox opening bid(s). If they are foxing, trying to draw a low enough first bid such that they can break it with a 20% higher next bid...then everything changes.

The league can then negotiate a proper deal with whomever they wish, in whatever configuration is best, with no detailing to the original bidder details of the competing bids...and get the maximum amount.

Its a massive longshot, I just dont see it happening... but who knows.

For 9 to go blind is still the best outcome.

I might be mistaken but your mistyped namesake is the only journo to pick up on the 7 thing but it's getting recirculation now.

If 7 are truly poor why aren't they pissing on such comments in public?

All I hear from within the industry is how tight money is with the TV Stations. Channel 10's EBITDA is down about 40% in the first half of 2012 compared to 2011. 7 hide behind consolidated reporting, but TV EBIT is down 7% on last year, 9 has huge debt, is struggling for ratings and hoping the Olympics is HUGE for them, 7 has been thumping them in the ratings, 9's owner is a private equity group, CVC Asia Pacific, and they are stretched badly.

I have no idea where everyone thinks a TV Rights deal for 1 Billion to 1.4 Billion dollars is getting funded from, or how sustainable it is. A Billion Plus Dollars is a lot of cash for a station already under about 3.6 billion dollars in debt and where just a few months ago there was a lot of speculation about whether they could even roll the facility.

You're roughly on the money with those numbers but what 10, 9 & Foxtel truly fear now is what will happen if they don't have the NRL. 10 had these plans in place for about 18 months now - well before current quarter. 7 has their halo locked up - as I've said since these things started leaking out - of all 4 groups in they're in the only power seat.

Also on 9 not sure if I've seen this getting reported but the hedge fund buyers have okay about $600 million for this fight.

This really is do or die for both 9 & 10. Play it cheap, then they'll pay the real price.

 

[Karl]

Read the TV Channels' corporate websites under Investors - they have their financial reports and "presentations" up for the first half of 2012 etc. I got my figures from the source, but what's interesting is the way they talk it up. 10 look diabolically rooted on performance but the future, oh the FUTURE is so bright everyone on the Board needs industrial shades. The message they deliver depends on the purpose and the audience and it's the same for all of them. If they are in negotiations about how much they can pay in a rights deal then they play up the tight cash situation, the tough trading environment, the uncertainty and disruption caused by new technologies, debt servicing and how tough lenders are these days etc. But when it's about the share price, well hell boys and girls, look at our fabulous shows and the ratings! My goodness, the ratings are awesome! And all of these amazing plans and startegies are going to turn the whole thing around/cement our dominance/drive profits etc etc. It's been PR'd to death by the best spin merchants in the biz. In a negotiation though they say "forget all that fluff, look at our P&L".

I hope someone digs deep and maybe League gets a Dutch Auction going. That I would like to see. I think what happens will be as much about the way these Boards feel about the economy moving forward and technology/online threats to the broadcast model as anything. I don't have a lot of faith in the estimates going around, they just seem a little optimistic based on what I have read and what I hear coming straight out of the industry in terms of how much money the networks have to throw at content. Big Sport like the NRL is likely to be the Big Exception if anything is and strategically the NRL is a vital jewell for 9, I'm just saying that there is a point at which a Company can't pay any more, no matter how much they want to and I don't know if thats near 1.2 Billion Dollars for 9 right at the moment, all things being what they are and I don't know if the other stations are really positioned to drop more than 9 is capable of dropping.

Canard - re :

Right on cue the Union troll and Paul Pottinger apologist makes his impact on this thread.

There certainly is a shit load of chicken counting going on in this thread, but be f**ked if Ill take any input from a died in the wool Union fan about it.

Sorry you feel that way. I hope they get a great deal. I think a couple of extra clubs and a higher salary cap and maybe bigger squads is a great thing - thats a lot of young blokes who can make a good living playing the game they love, its a lot of encouragement to young people to work hard for a goal that encourages physical activity and mental toughness and team spirit and committment. And if they raid other codes like Union, that just opens up more opportunities there as well. It also might make some other channel think "hell with that, lets grab the Union and plug it a little harder on FTA" or maybe the "incoming tide lifts all boats" rule applies and Union see's some uplift in what they can expect for broadcast rights as well.

I don't see a good League deal as bad for Union at all - quite the opposite potentially.

 

[Ray Mosters]

I don't see a good League deal as bad for Union at all - quite the opposite potentially.

I agree, and the same goes for the AFL deal.

The AFL deal being so massive, and then them getting alot higher ratings this year with blanket live, pay-fta simultaneous and alternate-channel-outside-the-heartland broadcasting is going to end up being amazing for us, as we can offer a comparable product and can expect a similar result (obviously dependant on addressing the main discrepancy in value, being the quantity of advertising)

 

[Everlovin' Antichrist]

Right on cue the Union troll and Paul Pottinger apologist makes his impact on this thread.

There certainly is a shit load of chicken counting going on in this thread, but be f**ked if Ill take any input from a died in the wool Union fan about it.

Everything it posts is bollocks but occassionally, it's good for a laugh.

Exhibit A:

I don't see a good League deal as bad for Union at all - quite the opposite potentially.

:lol:

 

[Cletus]

Karl we're not talking about $1.2bil for Nine they'll only have to come up with roughly half that. As for the dire straights they're in have a look at the ratings for The Voice. They're better than Origin! A few weeks ago they were going terribly and 7 were kicking everyone's arses. Stations need content to win the ratings and league can provide that, it just won't come cheaply. All the FTA channels for one reason or another so there will be competitive bidding, what that adds up to I don't know but it will be a big increase on the current deal.