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Why News Ltd is eager to quit the NRL ahead of time
http://www.leaguehq.com.au/news/lhqnews/early-exit-for-news/2009/10/07/1254701061965.html
Roy Masters | October 8, 2009
Frustrated by continuing conflicts of interest over coverage of player scandals and payment for media rights, NRL part-owner News Ltd is desperate to exit the game.The haste to abandon the NRL eight years ahead of its scheduled departure has fast-forwarded plans to establish an independent commission to rule a code that seemingly has as many leagues as Jules Verne envisaged.
Former prime minister John Howard, whose principal sporting passion is cricket and whose interest in rugby league is focused on St George Illawarra, would be reluctant to lock himself into a long-term leadership of a re-branded Australian Rugby League. NRL chief executive David Gallop, who is certain to be the commission's inaugural CEO, was quick to distance himself from Howard, given rugby league received an $11 million grant on Saturday from the Rudd Government to construct a centralised administration.
The NRL club boss pledged with the task of recruiting commissioners, Gold Coast's Michael Searle, has approached former Qantas chief executive Geoff Dixon and chairman Gary Pemberton, who was also involved with SOCOG (Sydney Organising Committee for the Olympic Games) and the NSW TAB.
A past Queensland treasurer, Terry Mackenroth, currently a Queensland Rugby League director who sits on the board of the ARL, is considered a certainty to be elected to the commission. NRL executive board member Katie Page is also highly regarded but has a potential conflict as part-owner of Harvey Norman, the retail chain that sponsors State of Origin.
The potential break-up of Foxtel could also have accelerated News Ltd's determination to leave. News Ltd currently owns a quarter share and management rights of the giant telco, which has pay TV, mobile phone and online operations.
Should Telstra relinquish its half-ownership of Foxtel, News Ltd and the other quarter shareholder, James Packer's Consolidated Media Holdings, hold pre-emptive rights to buy it outright.
The C7 Federal Court case, in which Seven owner Kerry Stokes claimed a conspiracy by a coalition of Telstra, News Ltd and James Packer to shut down his pay TV arm, established that the law looks unkindly on a sport and a broadcaster being controlled by the same entity.
It is not known whether News Ltd will exercise a first-and-last-rights TV option as a condition of its exit from the NRL.
News Ltd chairman John Hartigan - a newspaper man - is tired of the conflict and looking to improve the balance sheet, while chief accountant Peter Macourt can see the value of exercising broadcasting control over a product that outrates AFL.
News Ltd draws $8m annually from NRL revenue, partly as re-payment of debts incurred during the Super League war but also to fund the Storm's annual $5m-$6m loss.
Such is the rivalry in the ''catch-and-kill-your-own'' world of rugby league, the NRL's other 15 clubs would demand News Ltd's $8m be split among them, rather than fund a club that has won the code's two big prizes - the NRL premiership and the under-20s Toyota Cup. It is anticipated News Ltd, whose 1997 peace treaty with the ARL committed it to exit all but one of its clubs within 20 years, would leave the Storm at the same time it departed the NRL. This would impose immediate cost burdens on the NRL outpost.
While the Storm's revenue will increase when it moves to its new $300m rectangular stadium next year, it would need significant subsidies until gate-taking and sponsorship can be maximised. The Broncos, the NRL's only listed club, is controlled by News Ltd, with a 67 per cent share, and makes an annual profit of between $1m and $2m. News Ltd's conflict was exposed during the State of Origin series when a Broncos player considered legal action against a News Ltd publication for a story that wrongly linked him with drug-taking.
News Ltd's Sydney tabloid, The Daily Telegraph, announced its back page would be a ''scandal free zone'' when the relentless exposure of misdemeanours attracted the criticism that the media company was undermining the value of its own sporting asset. A meeting of NRL club executives in August complained about harsh coverage.
The ARL, whose half-ownership of the NRL is enshrined in the 1997 peace treaty, was suspected a few months ago of deliberately stalling moves towards an independent commission. However, ARL chairman Colin Love is a strong supporter of a commission, despite News Ltd's oft-expressed view the ARL is made up of dinosaurs who should also surrender control.Love is aware many leading Australian companies have been reluctant to invest in the NRL, knowing they were lining the pockets of one of the world's biggest corporations.
News Ltd also has a half share and management rights of Premier Media Group, owners of Fox Sports, which has the rights to televise five NRL games a week until 2012. As News Ltd half-owns the NRL and PMG, it is in fact paying money to itself for rights that, based on rugby league filling 66 of the top 100 spots on pay TV, is a seriously undervalued commitment.
http://www.leaguehq.com.au/news/lhqnews/early-exit-for-news/2009/10/07/1254701061965.html
Roy Masters | October 8, 2009
Frustrated by continuing conflicts of interest over coverage of player scandals and payment for media rights, NRL part-owner News Ltd is desperate to exit the game.The haste to abandon the NRL eight years ahead of its scheduled departure has fast-forwarded plans to establish an independent commission to rule a code that seemingly has as many leagues as Jules Verne envisaged.
Former prime minister John Howard, whose principal sporting passion is cricket and whose interest in rugby league is focused on St George Illawarra, would be reluctant to lock himself into a long-term leadership of a re-branded Australian Rugby League. NRL chief executive David Gallop, who is certain to be the commission's inaugural CEO, was quick to distance himself from Howard, given rugby league received an $11 million grant on Saturday from the Rudd Government to construct a centralised administration.
The NRL club boss pledged with the task of recruiting commissioners, Gold Coast's Michael Searle, has approached former Qantas chief executive Geoff Dixon and chairman Gary Pemberton, who was also involved with SOCOG (Sydney Organising Committee for the Olympic Games) and the NSW TAB.
A past Queensland treasurer, Terry Mackenroth, currently a Queensland Rugby League director who sits on the board of the ARL, is considered a certainty to be elected to the commission. NRL executive board member Katie Page is also highly regarded but has a potential conflict as part-owner of Harvey Norman, the retail chain that sponsors State of Origin.
The potential break-up of Foxtel could also have accelerated News Ltd's determination to leave. News Ltd currently owns a quarter share and management rights of the giant telco, which has pay TV, mobile phone and online operations.
Should Telstra relinquish its half-ownership of Foxtel, News Ltd and the other quarter shareholder, James Packer's Consolidated Media Holdings, hold pre-emptive rights to buy it outright.
The C7 Federal Court case, in which Seven owner Kerry Stokes claimed a conspiracy by a coalition of Telstra, News Ltd and James Packer to shut down his pay TV arm, established that the law looks unkindly on a sport and a broadcaster being controlled by the same entity.
It is not known whether News Ltd will exercise a first-and-last-rights TV option as a condition of its exit from the NRL.
News Ltd chairman John Hartigan - a newspaper man - is tired of the conflict and looking to improve the balance sheet, while chief accountant Peter Macourt can see the value of exercising broadcasting control over a product that outrates AFL.
News Ltd draws $8m annually from NRL revenue, partly as re-payment of debts incurred during the Super League war but also to fund the Storm's annual $5m-$6m loss.
Such is the rivalry in the ''catch-and-kill-your-own'' world of rugby league, the NRL's other 15 clubs would demand News Ltd's $8m be split among them, rather than fund a club that has won the code's two big prizes - the NRL premiership and the under-20s Toyota Cup. It is anticipated News Ltd, whose 1997 peace treaty with the ARL committed it to exit all but one of its clubs within 20 years, would leave the Storm at the same time it departed the NRL. This would impose immediate cost burdens on the NRL outpost.
While the Storm's revenue will increase when it moves to its new $300m rectangular stadium next year, it would need significant subsidies until gate-taking and sponsorship can be maximised. The Broncos, the NRL's only listed club, is controlled by News Ltd, with a 67 per cent share, and makes an annual profit of between $1m and $2m. News Ltd's conflict was exposed during the State of Origin series when a Broncos player considered legal action against a News Ltd publication for a story that wrongly linked him with drug-taking.
News Ltd's Sydney tabloid, The Daily Telegraph, announced its back page would be a ''scandal free zone'' when the relentless exposure of misdemeanours attracted the criticism that the media company was undermining the value of its own sporting asset. A meeting of NRL club executives in August complained about harsh coverage.
The ARL, whose half-ownership of the NRL is enshrined in the 1997 peace treaty, was suspected a few months ago of deliberately stalling moves towards an independent commission. However, ARL chairman Colin Love is a strong supporter of a commission, despite News Ltd's oft-expressed view the ARL is made up of dinosaurs who should also surrender control.Love is aware many leading Australian companies have been reluctant to invest in the NRL, knowing they were lining the pockets of one of the world's biggest corporations.
News Ltd also has a half share and management rights of Premier Media Group, owners of Fox Sports, which has the rights to televise five NRL games a week until 2012. As News Ltd half-owns the NRL and PMG, it is in fact paying money to itself for rights that, based on rugby league filling 66 of the top 100 spots on pay TV, is a seriously undervalued commitment.
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