Value of Origin series is a $13.5m question
ROY MASTERS
June 16, 2010
A report commissioned by the Queensland Rugby League values State of Origin broadcasting rights, including tonight's game in Brisbane, ''within the range of a high of $16 million and a low of $11 million annually, irrespective of which TV network buys them''.
Channel Nine now pays $40 million cash a year for all rugby league free-to-air rights, including NRL matches, Origin, finals, tests and Four Nations games. The NRL chief executive, David Gallop, has indicated he may unbundle the various properties for sale when the existing rights agreement concludes at the end of the 2012 season.
The Network Seven boss David Leckie has declared an interest in buying the rights to State of Origin's three games each year, which poses this question: would Nine be interested in bidding for free-to air rights for the NRL games it now shows each week if it lost the code's mid-season jewel?
If we take the midpoint of the Queensland Rugby League valuation, $13.5 million, and subtract it from the $40 million Nine now pays for its three games a week for 26 rounds, plus 10 high-rating finals matches and Tests, the answer is yes, Nine would pay $26.5 million for nearly 100 games.
Nine's senior executives, among many others, admit the NRL rights will go for a higher figure next time. Would they pay more without State of Origin, which Nine can thank for winning the ratings week in all markets in Australia when Queensland beat NSW in the first game last month? Nine certainly would not promote Origin matches if they were shown on another network.
But the AFL has found that what it loses in promotion when games are spread over networks is compensated for by the variety of shows that grow up around the product throughout TV land. AFL is shown on Seven, Ten and Foxtel, and all have pre- and post-game shows, with a mix of entertainment.
Nine no longer holds the AFL rights, but its Melbourne Thursday night Footy Show out-rates them all.
Seven already has a rugby league program, The Matty Johns Show, without State of Origin rights.
Nor could Nine commentators ignore talking about Origin in the weeks leading up to the selection of players, or the post-game analysis.
In any case, the three Origin football games are such a valuable property, a mandatory inclusion in the top 10 TV programs every year, they scarcely need promoting. Sport, in fact, is used on TV to promote other programs - the so-called halo effect. Channel Seven uses the Australian Open tennis tournament to shamelessly promote its new summer of shows. Nine relies on its Sunday afternoon game successfully to promote the 6pm news in Sydney and Brisbane.
Nine holds a first and last clause over its rugby league rights, but it is an unusual option in the sense the network's final offer is voided if its initial offer falls short of a competitor's bid by a specified percentage.
There is also uncertainty about whether Gallop can unbundle the rights while this clause exists and, if so, whether he must grant Nine a last option on all properties.
Industry experts believe that if a combined Seven bid for Origin and Test rights and a Ten bid for NRL matches exceeded Nine's first offer by more than the specified percentage, Nine's right to present an equal offer would lapse.
Nine is mindful it must make a serious challenge for the rights with the first offer but Ten's role will be crucial. Ten's top executives have met Gallop, but industry contacts say the network is close to finalising another deal with Seven, Foxtel and the AFL.
If this transpires, Nine will have the free-to-air rights to its three NRL games a week to itself, with a possible legal action over Seven's challenge for Origin rights.
The Queensland Rugby League has taken legal action over its perceived sidelining by its brother league, the NSW Rugby League. The NSWRL agreed with News Ltd that the two states would have minor representation in the reconstitution of the game to create an independent commission.
With a war chest of $6.5 million, the Queensland Rugby League has the resources to pursue court action to get a bigger role in the governing of the game. And a victory in Brisbane tonight - delivering the Maroons a record fifth consecutive Origin series - will further puff their chests.