Nine Network CEO David Gyngell said that his "decision to splurge" A$925M ($685M) on the National Rugby League's TV rights was the one deal "I'm confident you cannot afford not to have," as the broadcaster retained the code "at a price many in the industry saw as too high," according to Darren Davidson of THE AUSTRALIAN. Rugby league regularly serves up "stunning results but none so amazing, perhaps," as the sale of free-to-air broadcasting rights for five seasons for A$925M -- a 105% increase on the previous agreement. Gyngell admitted landing the coveted rights was a "bittersweet victory because of the hefty price tag." He said, "You never come out of these deals thinking you have done a great deal. I'm happy that my network continues to have the football but the price is significant and I always feel like the rights holder has got the upper hand." For fans, four games live on free-to-air television is a "massive improvement on the previous deal" agreed upon in '13, when there was "originally only one live match on Friday nights." Amid "significant pressure" from fans, Nine and the NRL "caved in to people power and served up a Sunday 4pm kick-off as an extra live game" under a four-year contract that starts in '18. NRL CEO Dave Smith trumpeted the new deal as "the biggest deal in Australian free-to-air history" as he seeks to raise the profile of the code "in the face of increased competition" from the Australian Football League and A-League (THE AUSTRALIAN, 8/11). ABC reported the new TV deal "allocates a standalone representative weekend
that takes in Pacific Nations Tests and the Sunday night State of
Origin." Smith said that the deal "will help bring more games to more fans, and protect the longevity of the code." He said, "So there will be more live and free Rugby League on television -- and that is what the fans want. And we still have simulcast rights, pay-TV, New Zealand and international television rights to be negotiated." He said that the Origin switch "is to preserve the unique occasion of Origin," while minimizing disruption to the NRL season. Smith: "In other words, we are preserving Origin as a marquee event of the year while minimizing disruption to the premiership" (ABC, 8/9).
HIGH HOPES: In Sydney, Brad Walter reported optimistic NRL officials "believe they may be able" to secure more than A$2B ($1.48B) in total for the broadcast rights after announcing a record free-to-air deal. Smith said that it had been a "judgment call" to sell the free-to-air rights to Nine while "still negotiating other aspects of the broadcast deal." But officials are "upbeat that it will improve rather than diminish the game's bargaining power with Fox Sports."
With the A$185M ($137M) per year Nine will pay being more than double the A$90M ($67M) per year the network contributes to the current A$1B ($740M) deal, the NRL "could fetch" more than A$2B if it can convince Fox Sports to increase the A$110M ($81.5M) per year it now pays by a "similar percentage" (SYDNEY MORNING HERALD, 8/10). In Sydney, Phil Rothfield reported rugby league's first TV deal in '73 with the ABC was worth just A$1,000 a game. None of the commercial networks, Nine, Seven or Ten, "even put in a bid for it." The A$925M deal is the "richest in Australian sporting history" -- and a 170,000% increase on the game's first
broadcast deal. Monday night football "gets the axe," as predicted. The NRL has "also taken away control from Channel Nine to determine their own draw" (DAILY TELEGRAPH, 8/11).
NEXT BID: In Melbourne, Stensholt & White reported Nine "will still fight hard for a slice of AFL broadcasting rights" despite agreeing to shell out A$925M over five years for NRL matches. Nine "believes its balance sheet is strong enough to also launch an assault for AFL rights." The broadcaster sold its Nine Live business for A$640M in April and achieved a "significant savings" after renegotiating its programming deal with Warner Bros in May. It will face "intense
competition from AFL incumbent broadcaster Seven West Media, and
potentially a combined Foxtel and Network Ten bid." Nine shares fell 2.8% to A$1.40 ($1.04) on Monday after the NRL deal was revealed before the market opened. Credit Suisse media analyst Fraser
McLeish, who has a "neutral"
recommendation on Nine shares, said, "They are paying up but they are
getting a lot more value, online rights, better games and more live
games. We estimate they are paying 50 percent more per game, however,
are getting more live prime-time games so the uplift on costs per live
game is significantly less than that" (THE AGE, 8/10).
WELCOME NEWS: MUMBRELLA's Nic Christensen wrote media buyers have "welcomed the NRL deal," but warned it "piles the pressure on the AFL to secure a similar price rise." Maxus CEO Mark McCraith said, "The AFL will become critically important. The other networks are now going to have a red hot crack at the AFL. For Nine they are the home of the NRL and clearly it is a good thing
for them, particularly with the extra Saturday, and as a tentpole for
their scheduling it will just reaffirm confidence that buyers have with
their network." Starcom Medivest CEO Chris Nolan warned, "This puts more pressure on the
AFL to get their increase because they are looking for a 50 percent
increase on their rights. This will put pressure on them to get that
from Seven and Ten" (MUMBRELLA, 8/10). In Sydney, Paul Kent wrote "strong financial position is only half the battle after the NRL announced its new free-to-air television deal." It is now likely club grants will rise from A$7M ($5.2M) to A$12M ($8.9M), which "means nothing to the clubs if the salary cap goes up by
the same amount." The "worst thing" the NRL could do now is "bow to public pressure and pass on the extra funding, without filter, to the players." Most emphasis has centered on the "better result for fans." The "best part though is the game now has the money to fund all those areas that need attention and improvement." Junior
development, bush football, better pathways, a better gameday
experience for fans "who still prefer to go to the game than enjoy the
benefits of their new television deal" (DAILY TELEGRAPH, 8/10).
COMING UP EMPTY: In Sydney, Andrew Webster reported two decades after Rupert Murdoch's Super League "tried to hijack the entire
code," all for the sake of TV "product," it could end up with "nothing at all." That scenario "seems unlikely." Uncle Rupert will "just need to dig a little deeper." The rise of on-demand, Internet streaming media such as Netflix means
Fox Sports has "genuine competition in trying to secure the remaining
rounds." But while Nine wants rugby league, Fox Sports "needs it to
survive." While Fox Sports execs were "privately putting a positive spin on their position on Monday night, they will now have to pay handsomely" if they want to spruik "all eight matches live" from '18, excluding the grand final and State of Origin. One source close to negotiations said, "Someone's head will roll for this" (SMH, 8/10).
ANZAC TEST AXED: STUFF reported the New Zealand Rugby League was "seeking clarification from Australian authorities after the annual Anzac test was scrapped as the sport charts a new course" with the new NRL broadcast deal. The Anzac test, an annual fixture between the Kiwis and Kangaroos since '04, "is a victim." The
int'l game is being given "a new priority," meaning it will be
played in a dedicated window after the NRL Premiership season. The move "seems to have caught the NZRL by surprise" (STUFF, 8/10).
