Double or nothing: Why the NRL TV rights are worth $1 billion
ROY MASTERS
May 16, 2009
NRL club bosses will press chief executive David Gallop to demand $1 billion in TV rights fees in the next broadcasting contract following the release of a confidential report showing rugby league has closed the viewership gap on the AFL over the past three years, with both codes having a cumulative audience of 120 million last year.
Rugby league has also continued its popularity on pay-TV, seizing 15 of the top 20 most popular programs last year, while the AFL's most watched game came in 26th, despite an improved programming deal in the existing broadcasting contract.
AFL boss Andrew Demetriou said recently he would expect an increase of $200m on the AFL's five-year deal of $780m, prompting one NRL club chief to say: "If they can get a billion dollars for the same audience we get, we should get a billion."
The NRL's six-year deal (2007-12) with Channel Nine-Fox Sports is valued at $500m, well below the AFL's contract, despite both codes staging the same number of games each week.
While the revelations on an ABC Four Corners program concerning the group sex incident involving Matthew Johns is expected to hurt the NRL in the corporate marketplace with sponsorships, TV ratings have surged since the launch of the season, when the code was forced to cancel an advertising campaign that had focused on Brett Stewart, after he was charged with the sexual assault of a 17-year-old girl.
This year, Channel Nine's NRL coverage of rounds one to five attracted an average capital city audience of 761,000 per match, up 9 per cent on last season's average, based on OzTAM figures. Nine's second match on Friday night, up 42 per cent in Sydney and Brisbane on last year's average, is driving most of this increase.
By comparison, the AFL's free-to-air audiences this year after three rounds (Seven's Friday night game 717,000; Ten's Saturday game 536,000 and evening game 774,000 and Seven's Sunday game 529,000) are down across all matches on the previous year, and well below 2007 figures. "Our NRL ratings are only in two capital cities [Sydney and Brisbane]," said Nine sports director Steve Crawley, drawing a difference with AFL figures which embrace five capitals.
Regional ratings - the NRL has strong followings in rural NSW and Queensland - are not included in this year's figures.
The free-to-air components of the TV rights deals of both codes show the AFL receives almost twice as much per game, despite the NRL rising in popularity.
The AFL receives $465m for five years for four games a week, or $23m for the right to telecast one game each week for a year, while the NRL gets $250m over six years for three games a week, or $14m for a game a week each year.
Pay TV figures also reflect the popularity of rugby league, with NRL matches on Fox Sport last year making up two-thirds of the top 100. The AFL had only 10 top 100 programs, and its most popular game - Fremantle versus Essendon - came 26th.
Foxtel paid Seven and Ten $315.5m over five years to cover four live matches a week, equal to $15.8m for the right to televise one game a week for the season.
Fox Sports pay the NRL $42m a year for five games, or $8.4m or the right to televise one game a week for the season.
Insofar as News Ltd owns both half the NRL and half Fox Sports, the pay TV rights' underpayment reflects badly on this continuing conflict of interest.
This year, Fox Sports' live viewing for the first five NRL rounds (Saturday evening average viewing per match 279,000; Sunday 210,000; Monday evening 268,000) is well ahead of the AFL's 182,000 average for the first three rounds.
NRL viewing is up 3 per cent on last season's average and the same rounds last year, while AFL is up 8 per cent on last year's average and 9 per cent on the same rounds last year.
Foxtel penetration is highest in Sydney, with a report commissioned by the NRL quoting a Foxtel executive in March this year saying, "Rugby league is a key driver for our Sydney penetration. It is rare to get a single decision-making purchase, but NRL is an important tentpole factor."
Of pay TV's 100 most popular programs last year, a rugby union Test came in first; two football World Cup qualifier matches occupied the next two positions, then came the NRL's top game, Cowboys versus Storm.
Overall, NRL occupied 66 spots; Test cricket 12; AFL 10; union Tests 4; America's Next Top Model 4; World Cup football qualifiers 3; Super 14 rugby 1.
However, free-to-air coverage has been largely responsible for NRL closing the gap on overall TV figures with the AFL, which has lost one free-to-air game to pay.
Since 2005, Channel Nine's NRL audience has increased 7 per cent a year, driven predominantly by viewership in an additional Friday night game introduced in 2007.
The introduction of the Titans and the double-header format has increased Queensland audiences by 25 per cent, with limited effect on NSW viewership until this year when the combination of games which are close and free at a time of global recession has boosted the second Friday night match by 42 per cent.
The AFL's expectation of a $1b TV contract beginning in 2012 is based on an additional game each week, as a result of a western Sydney team starting that year and a Gold Coast team entering the competition in 2011.
To win the extra revenue, the AFL might be willing to abandon its set fixture schedule to allow broadcasters flexibility to maximise ratings, with double-headers, such as Collingwood matches in Melbourne and West Coast-Fremantle matches in Perth on Friday nights.
Channel Nine televises higher- ranked, closer-positioned NRL teams on Friday night in prime time, again indicating how the NRL is underpaid by the broadcasters.
