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SBD Global/June 5, 2013/Media

Cricket Australia To Receive $574M From Five-Year Broadcast Deal With Nine, Ten

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Channel Nine CEO says the A$450M price tag to broadcast cricket was worth it.
Cricket Australia said that it will reap A$590 ($574M) over the next five years "from the sale of domestic broadcasting rights" to Channel Nine and Network Ten, according to Dan Baynes of BLOOMBERG. Nine, owned by Apollo Global Management and Oaktree Capital Group, will pay A$450M in cash and advertising and promotional rights "to retain elite Tests, one-day internationals and Twenty20 matches." Network Ten agreed to pay A$100M a year "in cash and advertising for the rights to the domestic Big Bash Twenty20 competition." Nine "will also enter a joint partnership" with Melbourne-based Cricket Australia to develop digital broadcasting assets (BLOOMBERG, 6/4). The AFP reported Cricket Australia said that the deals ensured all int'l games at home would be telecast while the Big Bash "would be free-to-air and not on pay TV." Cricket Australia derives about 80% of its income from TV rights (AFP, 6/4). Australian cricket's new arrangement with Channel Nine and Network Ten will help fund cricket experiences for fans, kids and community clubs. Cricket will have no restrictions on smartphone and tablet screen size, and will stream matches live on PCs. Cricket Australia will attempt to grow the sport by assessing facility development (CA).

NEEDING STABILITY: In Sydney, Bodey & Lalor reported Nine Entertainment CEO David Gyngell "didn't question" whether Nine would retain the broadcast rights to cricket, although the price tag was an "ouch moment." Gyngell: "I keep getting rolled out at these events and I've just paid a lot of money for sport. I don't know how smart I am, but I'm certainly passionate and committed to them." Few in the market "expected Nine to lose it, either," with the network allowed last bidding rights. Sydney-based media buying agency PHD CEO Mark Coad said, "Personally, it's hard to envisage a strong Nine without cricket so I'm pleased they did the deal." Analysts said that the looming public listing of Nine -- perhaps in the next year as Apollo and Oaktree look for a profitable exit -- "forced Nine's hand.'' However, "is Nine the big winner from the deal?" It "depends on who you ask." Most market watchers believed Nine "needed the stability of the deal, no matter what the cost" (THE AUSTRALIAN, 6/5). In Melbourne, Saltau & Hogan wrote "If cricket is the wallpaper of summer," commentator Richie Benaud is part of the furniture and Channel Nine "expects the doyen to continue." Gyngell: ''I can't imagine cricket without Richie. Richie will do cricket for as long as he wants to do cricket. We'll never be telling Richie what he can and can't do" (THE AGE, 6/5).

SUTHERLAND'S WARNING: In Sydney, Malcolm Conn reported cricket "is about to declare war on the football codes." Cricket Australia CEO James Sutherland claimed that Cricket Australia "is on the verge of rolling out new programs and incentives to attract the best teenage talent in the country." Sutherland: "I don't think people realize just how much cricket has to offer for talented young athletes." Sutherland has promised to pour more than A$400M back into cricket to "increase participation, improve club facilities nationwide, enhance elite pathways for talented teenagers and ensure Australia's cricketers remain the best paid from any team sport in the country." He added, "We haven't had the firepower to focus on that in the past and we see that we now have that opportunity" (DAILY TELEGRAPH, 6/5).

BEING LEFT OUT: In Sydney, Lalor also wrote the Ryobi Cup and Sheffield Shield final "were the big losers in the historic broadcast agreement." The deal with Ten has "left a bad taste in mouths at Fox Sports, with that group a little upset that the work it did to promote the T20 tournament had seen the product's value improve so much it could not afford to pay for it." The pay channel had also broadcast the Ryobi Cup and Shield finals, but Ten "was not interested in broadcasting these in the new deal and Fox had said it was all or nothing" (THE AUSTRALIAN, 6/5).

HOW IT WENT DOWN: The AUSTRALIAN FINANCIAL REVIEW wrote "It was almost dawn on Monday" before Nine Entertainment execs and UBS bankers finalized the paperwork "to secure the media rights to cricket." Nine’s dealings with Cricket Australia "were only half of it." Nine’s deal with Cricket Australia and associated deals with WIN to acquire its Adelaide station for about A$140M and renew its affiliation agreements "sit within a broader matrix of deals" also involving its commercial rival Ten. Somehow, "the planets seemed to align so three commercial TV broadcasters -- who are often at each other’s throats -- could actually negotiate and each walk away with something that would leave them better off" (AFR, 6/4).
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