http://www.smh.com.au/rugby-league/...-be-outfoxed-on-tv-rights-20120622-20the.html
A SHORT-TERM deal between rugby league and its broadcasters looms as a distinct possibility following News Ltd's acquisitions.
Rupert Murdoch now owns all of the monopoly sports production company Fox Sports, half of the monopoly pay-TV company Foxtel, and has a first and last hold on rugby league broadcasting rights until 2027.
While News Ltd relinquished its half-ownership of the NRL this year, it still has a powerful influence over the game's future through its control of the code's purse strings. Pay-TV rights traditionally represent a bigger share of the top sports' broadcasting income than free-to-air rights.
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It follows that if Fox Sports tables a low-ball offer to rugby league for broadcasting rights later this year, the Australian Rugby League Commission would be desperate to force the pay-TV operator to change its mind.
One option is to sell all eight games a week to free-to-air networks for a couple of years and sit back and watch the massive churn of Foxtel subscriptions, particularly in NSW and Queensland where the number of households with pay TV is the highest in the nation, courtesy of the popularity of rugby league.
James Packer and Kerry Stokes now have $2 billion to spend as a result of the sale of their shares in Fox Sports and Foxtel to News Ltd.
Packer owns 9 per cent of Channel Ten, and Stokes is the biggest shareholder in Channel Seven, with both networks declaring an interest in the rugby league rights months ago.
It seems bizarre that News Ltd would arm Packer and Stokes with the money to bid against them, particularly when Fox Sports and Channel Nine have formed a combine for the league rights.
It is equally strange that Packer and Stokes would sell their shares before the acquisition of the rugby league rights, which presumably would enhance their value.
Packer has indicated he will use his share of the $2 billion to invest in Sydney casinos, and has been considering exiting the media for some time. He is frustrated by the failure of the often vanity-driven media moguls to maintain what is called ''peace in the valley'', another way of saying a return to the ''keep off the grass'' convention of 30 years ago when the proprietors did not bid against one other for sports rights.
Stokes's sale of his share of the Fox properties technically means he can launch a clean bid for rugby league's free-to-air rights, without having any complications over part-ownership of pay TV rights with another free-to-air shareholder.
However, if this Fox sale means Seven and Ten don't enter the auction for rugby league rights, it leaves the Nine/Fox Sports combine as the only bid on the table.
This inevitably means an offer well short of $1 billion, a rebellion by club officials and potentially, the sacking of the entire ARL Commission.
Only a short-term broadcasting deal would placate the stake holders, hopeful that the telecasters would return to the table with increased offers in a couple of years.
Furthermore, the ARLC would be aware TV companies prefer long-term deals because they build stability into programming.
But there are another couple of reasons the ARLC might pursue a deal short of the five- and six-year contracts it has signed in the past.
Online rights are also up for sale, and no one can say what new technology is around the corner.
The AFL has employed 120 staff to run AFL.com, which will be able to sell all of its games direct to subscribers, cutting out Foxtel and Telstra.
It is in the first year of a five-year contract with Foxtel/Telstra, and expects AFL.com to be operational soon. The AFL will also be closer to owning Etihad stadium, which would become a TV production house.
Rugby league is a decade away from emulating the AFL, given the pathetic TV deals done over the past 15 years.
One way the ARLC would like to move closer to the AFL, albeit only chronologically, is with its TV deal.
By signing a four-year deal, it would bring both codes into line, positioning them in the market for broadcasting rights in the same year.
However, a short-term deal does not help a code build a nest egg. The AFL has a future fund that allows it to erect goal posts all over Sydney, including rugby league's birthplace, Birchgrove Oval.
The ARL wasted its $23 million inheritance during the Super League war when Kerry Packer refused to spend any more until the code exhausted its reserves.
All of which makes it particularly galling that James Packer collects another $1 billion from News from the sale of Fox, a property News gifted him as part of the settlement to end the Super League war.
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http://www.smh.com.au/rugby-league/...n-tv-rights-20120622-20the.html#ixzz1yZLghusi
