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SBD Global/August 22, 2012/Media

Nine, Fox Pay $1B For Five-Year Australian Rugby League TV Deal

The Australian Rugby League's new $1B deal with Nine and Fox Sports is a huge boost for the sport in Australia.
The Australian Rugby League Commission has agreed to a five-year broadcasting agreement with Nine and Fox Sports in a deal worth more than $1B, marking the largest agreement in Rugby League history. The deal allows Nine and Fox to broadcast all games in Australia, and leaves the ARLC free to pursue further broadcasting revenues in New Zealand. ARLC Chair John Grant said, “The whole package is a simply fantastic result for Rugby League. The cash that comes from the agreement, used wisely, will provide the funding base for sustainably growing our game from the grassroots to the elite levels." The agreement includes a cash component of $925M, $90M of which will be paid prior to the start of the first season. It also includes advertising packages up to $100M. The Nine Network will broadcast three weekly matches -- two on Friday, one on Sunday -- and three Thursday evening matches during the year. The Network also has broadcast rights to the following: A stand-alone Test and City vs. Country weekend; Wednesday night State of Origin matches; a night-time Grand Final; the Roosters Dragons Anzac Day matches; two hours of Rugby League content each evening on digital Channel 94 plus two hours of content on Saturday and Sunday morning; the Queensland In Trust Super Cup. Meanwhile, Fox will telecast five weekly matches from Saturday through Monday, including 13 Sunday evening matches over the course of the year. Fox will also broadcast the Storm vs. Warriors Anzac Day game (other than in '14) and three non-National Rugby League matches each week played in conjunction with the Telstra Premiership game. Nine and Fox Sports will provide coverage of The Four Nations Tournament, the first 20 rounds of the Premiership. Both Nine and Fox Sports will work together to stage two-player development academies to train players in media presentation (NRL).

IN A GREAT PLACE: In Sydney, Brad Walter reported that NRL clubs are expected to receive "an immediate $500,000 payment," while a salary cap of up to $6M will be discussed at Monday's inaugural meeting of the ARLC Council. Also, media company News Ltd. agreed to relinquish first and last rights of refusal on all media rights until '27. As a result, the game is now "in the best place it has been since before the outbreak of the Super League war," which drained the ARL of cash reserves totaling more than $20M (SYDNEY MORNING HERALD, 8/22). Also in Sydney, Roy Masters wrote that viewers will see "little on-screen difference from the current split of three games on Nine and five on Fox Sports" other than a Sunday twilight match. The deal is "a big win for players, clubs and, hopefully, development." It more than doubles the $500M over six years from Nine and Fox Sports that expires at the end of this season, and allows the league "to take advantage of a technological revolution where sports can sell their product direct to consumers via Internet devices" (SMH, 8/22).

PIVOTAL MOMENT: BLOOMBERG's David Fickling wrote that an ARLC statement said it signed the agreement following “several days of intense negotiations with representatives of all commercial television networks.” Grant said, “It’s been a difficult, complex and at times stressful process. For our game it is the greatest deal ever done” (BLOOMBERG, 8/20). In Sydney, Stuart Honeysett reported that NRL Club Council Spokesperson David Trodden described the deal as "a pivotal moment for the game," and predicted it would "pave the way for clubs to break free of debt." More importantly, the days of having to rely on the league's club grants or cash injections from private owners to stay afloat may be over. Trodden said, "There was always a view in club land about the TV deal delivering long-term financial viability for the clubs and the game. I think that this deal will do that -- 15 out of 16 clubs have been operating at a loss and I think that this provides an opportunity for 16 of the 16 clubs to be on a solid financial footing and not make losses any more. It's a pivotal moment in the history of the game" (THE AUSTRALIAN, 8/22).

RIVALING THE AFL: In Sydney, Brent Read reported that NRL clubs are "set to receive the bulk of the money, easing concerns over their long-term viability." The players will also "share in the windfall through healthy salary cap rises" over the course of the five-year deal. Rugby league will now "be in a position to defend its heartland against forays from the AFL" (SMH, 8/22). THE AUSTRALIAN reported that the NRL "appears to have finally matched the AFL when it comes to squeezing the last red cent out of the media" for the right to broadcast its matches. Fusion Strategy Media Analyst Steve Allen said the deals were almost for "the same figure." Both sports had almost "bled the broadcasters dry." Allen: "Both the AFL and the NRL are absolutely fully priced. There is far higher risk in the NRL deal for Foxtel and for Nine, in particular, because the matches are shorter and they don't have as many natural breaks. That means you can't squeeze as many ads in" (THE AUSTRALIAN, 8/22). In a column for THEROAR.com.au, Adrian Musolino asked, "Has the NRL done the A-League a massive favour?" Musolino wrote, "Who was the biggest winner out of a day that delivered the NRL a new billion-dollar media deal and Football Federation Australia a new CEO, the NRL or the A-League?" The failure to replicate the AFL’s deal with all matches live on Fox leaves NRL fans "at the mercy of frustrating delays, matching the billion-dollar mark set by the AFL is a psychological win for the NRL considering its national footprint is much smaller compared to the AFL’s and delivers vital funds for the growth of the game." Gallop is "undoubtedly a strong leader." Musolino concluded: "The NRL could, therefore, have played a key role in the future direction of Australian football; not only training and freeing up a leader the round-ball game desperately needs but also staying put at its free-to-air home and leaving some openings elsewhere. A billion reasons to smile for the NRL and a few for football fans… (THEROAR.com.au, 8/22).

ANYWHERE, ANYTIME: In Sydney, Simon Canning reported that "anywhere and anytime" is the promise of broadcasters. Football fans will be able to watch games streamed live to their computer or tablet device via Internet protocol TV after Fox secured the streaming rights. Meanwhile, Nine is promising "innovations" to the way it covers matches across the life of the five-year deal. NRL acting CEO Shane Mattiske said, "What you will see through the deal ... is some great innovation from our broadcast partners. We have been able to come to an arrangement where Foxtel subscribers will be able to access their content anywhere and anytime." The mobile phone and online rights "are expected to be confirmed later this week in a separate deal." The push into multi-screens is "a key element for the NRL to complement its delivery" on free-to-air (THE AUSTRALIAN, 8/22).

PIZZA AND ESPRESSO: In Melbourne, Nick Tabakoff wrote that it was only fitting that the deal was "sealed in a tense, all-night negotiation over boxes of gourmet pizza." As the Monday night negotiation of the rugby league rights dragged into Tuesday morning, the war room at the NRL's Moore Park headquarters "started to get messy." Boxes from the iconic Paddington pizzeria Arthur's were "strewn near an espresso machine that had been wheeled in especially for the negotiation." The strangeness of the scene in the NRL war room was "completed by the presence of about 20 of the country's top media figures, rugby league bosses, investment bankers, lawyers and advisers." One source said: "It was an extraordinary sight -- a bunch of high-flyers in the same room, reheating pizzas in a microwave." Many of those present even used paper plates to "scribble details of the deal and phone numbers, because they were the only spare bits of paper around." Both sides said that the atmosphere was "as tense as they had ever encountered on a business deal, with no pleasantries or handshakes." One source said, "It was civil, but there were no smiles around that table. This was a hard, hard negotiation" (HERALD SUN, 8/22). In Sydney, Brent Read noted that in the early hours of Tuesday, Grant and Mattiske "took a break." Mattiske returned more than two hours later having showered and dropped his children off at school. Grant also returned as the pair put "the finishing touches on a deal that is already regarded as one of the greatest in Australian sport." (THE AUSTRALIAN, 8/22).
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