NRL cannot kick broadcast rights can for as much as AFL
James Chessell
From: The Australian
June 25, 2011 12:00AM
ON any rational analysis, the NRL's media rights are not worth as much as the AFL's.
This will not stop many members of the extended rugby league family - including the odd commentator and club chairman - from making unrealistic claims about the the game's value. But strip away the emotion, ideology and historic grievances and you are left with good news and bad news as far as the NRL broadcast rights are concerned.
The bad news is that the Gold Coast Titans have as much chance of winning the competition as the NRL has of beating the $1.25 billion media rights deal struck between the AFL, Foxtel, Telstra and Seven earlier this year.
There are several reasons why the NRL is less valuable. The most obvious is that a free-to-air broadcaster cannot show as many ads. This is because a game of rugby league is not only shorter but contains less tries than goals and therefore fewer breaks in play.
While AFL is not big in NSW or Queensland, it is a more national game, which is important. For example, a company such as Telstra will always pay more for mobile and internet (IPTV) rights if it can market them across the country. Having the AFL is often the reason Seven finishes the week on top for all mainland capital cities combined.
National reach counts. NRL tragics talk about the code's Sydney and Brisbane audiences - which are very strong - but they forget that both AFL grand finals last year outrated the NRL equivalent (2.8 million and 2.7 million v 2.1 million) for the capital cities. Last year's NRL finals games averaged almost 700,000 metro viewers compared with more than 900,000 per AFL finals game, according to Goldman Sachs. These are the numbers FTA broadcasters care about. Not curious "cumulative audience" figures quoted in some newspapers (including The Australian) in March.
Another key difference is the new Gold Coast and Greater Western Sydney AFL teams. They will take many years to build even a small following, but expansion plans mean more games and more money.
It should also be said the stars aligned for the AFL deal. Seven was forced into a "take it or leave it" situation when it became clear Foxtel was in the running to broadcast all nine regular season games per round live (with the support of Nine). Seven ended up paying $50m extra. Foxtel upped its contribution for the live rights.
This scenario could be repeated with the NRL - Foxtel certainly wants to show all games live - but it is less likely. Seven already had four AFL games per week to show; it doesn't have the room to do a deal for more than one game per round. Meanwhile, Ten has made it clear to a nervous equity market it won't overpay for sports rights.
Another complicating factor is the Sunday afternoon NRL game Nine currently uses to lead into its 6pm news. To do that, the match is shown on a one-hour delay - a 4pm kickoff is too late to attract live fans - and FTA networks would resist any attempt by Fox Sports to show this game live.
Nine, which is dead against Foxtel broadcasting every NRL game live now that it is the incumbent broadcaster, also has some power in the form of a "first and last" option. The network argues this will make it harder for NRL chief executive David Gallop to break up parts of the schedule such as the State of Origin series among rival networks. Gallop does not necessarily agree but admits in the first instance the game must be offered as a complete package. Nine can lose its "first and last" if another party beats its opening bid by 20 per cent but this is a long shot. Breaking up parts of the game, of course, is no guarantee of increasing the total price.
Whether these points will be acknowledged by Gallop's critics remains to be seen.
Which brings us to the good news. Both pay-TV and Nine paid too little for the current deal which is worth about $100m per year. Both get great value out of the game - the NRL supplied 73 of the top 100 pay-TV programs last year and the Origin series delivers Nine an audience on par with the grand final.
Nine pays about $40m per year for three out of eight weekly games and could end up doubling its price.
The $60m per year paid by pay-TV seems like more but it is split between Foxtel, Austar and Sky in New Zealand.
But the bottom line is the total number (including digital and mobile rights) will be closer to $1bn than $1.25bn.
This would be a good result. It's a shame some people won't see it that way.
