Devil in the detail for NRL in TV rights fight
Glenn Jackson
December 31, 2010
AN ASTERISK has the potential to dilute the NRL's gain from the critical next broadcasting rights package, according to the man who is attempting to help rugby league officials negotiate a billion-dollar deal.
Colin Smith, the consultant who helped the AFL secure $780 million from its last television rights deal and has now been assigned the job of aiding the NRL in bettering its rival this time around, admitted the fine print in the federal government's anti-siphoning legislation would be of some concern to league administrators.
Federal Communications Minister Stephen Conroy is yet to announce his department's clarification on a critical area of the new anti-siphoning laws, which will take effect on New Year's Day. The new regulations have removed five of eight NRL matches a week from the list, a potential boon for the code. The AFL will have a similar deal in place, for four of its matches a week.
The devil might be in the detail - the fine print declared that ''the government will not delist any NRL or AFL games until a mechanism which protects the quality of free-to-air games has been settled''.
While certain the NRL's next deal will be significantly more than the existing $500 million contract, which runs out at the end of 2012, Smith did concede the NRL and AFL would be concerned by the ''mechanism''. In essence, the government is yet to decide who will pick the matches - the NRL or the broadcasters - and how they do it.
There were some fears the federal government, keen to ensure the best matches are on free-to-air TV, might opt to choose which matches are broadcast by the free-to-air rights holder, although that appears to have been ruled out. ''It's a concern for both the AFL and the NRL,'' said Smith, the principal adviser of L.E.K. Consultancy's sports, gaming, media and entertainment division. ''The challenge is in terms of how that 'mechanism' works. It could affect the value of those rights.''
Smith, who addressed the club chief executives during the recent CEOs conference in Byron Bay, said he expected there would be ''some sort of consistent mechanism across the two codes'', allaying any fears the AFL would be advantaged by the laws, which were announced last month. In fact, Smith said, because of the growing popularity of rugby league as a television sport - the massive numbers generated by State of Origin give the NRL better cumulative audience figures than its rival across free-to-air and pay-TV - NRL bosses still held a solid footing.
NRL powerbrokers, who have already foreshadowed bundling up different portions of the sport - representative fixtures, NRL rounds and finals - are expected to at least try to start their negotiations in parallel with the AFL. NRL chief executive David Gallop has been involved in constant dialogue with the government about the mechanisms, and has pushed for some sort of closure on the issue around the same time as the AFL, even though the AFL rights deals expire a year earlier, at the end of 2011.
It is likely the first, second and fifth-best NRL games will again be shown on free-to-air. The mechanism will decide who comes up with those selections and how. Senator Conroy recently stated that until the quality assurance guarantees were agreed, ''all games of AFL and NRL will remain listed events, preventing their acquisition by a pay-TV licence holder''.
The subcommittee of club chief executives, who have been preparing for the negotiations, is due to meet in early February. One of them told the Herald that the NRL would likely be in serious discussions with network executives in the next four to six months. The NRL will be desperate to secure a far bigger windfall than its last deal, with the code under siege in recent years from rugby union and now AFL for its best talent. With a $4.2m salary cap for each club, the NRL is unable to compete with its rivals when it comes to paying top dollar for its superstars. A significant increase in the broadcast deal will change that.
