One of the country’s foremost experts on media rights has predicted National Rugby League CEO Dave Smith "could yet emerge a hero from the battle for broadcasting dollars but only if he embraces expansion and adds another team in Brisbane," according to Brent Read of THE AUSTRALIAN. Colin Smith, whose company Global Media and Sports "was involved in the NRL’s last broadcasting deal, warned the decision to alienate Fox Sports and Telstra meant the game was likely to lose significant ground" to the Australian Football League. However, "he added a caveat." Smith said, "The NRL to solve this needs to do something really revolutionary, add two more teams and give them to Fox Sports. One of those teams should be in Brisbane. The Queensland market is under-serviced." In announcing the NRL’s A$925M ($680M) deal with the Nine Network for broadcasting rights from '18, Smith "revealed there was scope for expansion." However, the appetite for more teams "has been suppressed in recent years by the need to financially support the game’s existing clubs." There was hope the NRL would edge close to $2B ($1.4B) "from its next broadcasting agreement once pay-TV and digital rights were factored in." However, "those hopes appear to be waning" (THE AUSTRALIAN, 8/19). In Sydney, Davidson & Read wrote Smith is set to fall “significantly” short of the try line in his bid for a A$1.7B ($1.5B) payday for the code. Sources close to high-level discussions said News Corp. execs would refuse to match the A$530M ($389M) cheque the company’s sports programming subsidiary Fox Sports "signed for five exclusive matches a round under the existing five-year contract, which ends in 2017." Rugby league "is banking on a massive jump in the price of the rights" but News Corp. sources warned Smith "had devalued the remaining rights after agreeing a new agreement with the Nine Network following secret talks that sidelined Fox Sports and the code’s digital rights partner and naming sponsor Telstra." Noting that a A$400M ($294M) price tag had even been proposed at one stage
earlier this week in a sign Smith’s gamble was "in danger of failing
to pay off," one source said, “The value of the remaining rights is significantly less” (THE AUSTRALIAN, 8/20). Also in Sydney, Adrian Proszenko wrote Smith believes that "the size and the haste of the AFL deal is a pointer to how angered Rupert Murdoch was about his treatment in NRL negotiations." Industry insiders claim Fox Sports CEO Patrick Delany "wasn't informed of the Nine deal until it was announced via press release and that the Seven and Ten Networks weren't included in the official tendering process." Requests for an interview with Smith were declined, with a spokesperson saying, "The TV rights negotiations are still continuing. Dave has indicated he will not be discussing them further until they are concluded." Club CEOs and chairs "are privately concerned about Tuesday's AFL announcement, believing rugby league has again sold itself short" (SYDNEY MORNING HERALD, 8/19).
CONTENT IS KING: In Sydney, Roy Masters wrote rugby league "will gamble that multi-billion dollar international online giants, such as Google, Amazon and Netflix, will tender to buy streaming rights to its eight weekly games." However, "content is king and nothing beats live, popular sport." Google, as one ARL commissioner said, "wants to own the world" and Murdoch knows it. The worst case scenario for the ARLC "is that Fox Sports refuses to take any games and no online providers bid." However, the ARLC "is confident Fox Sports will come to the table, knowing it faces massive churn in the northern states if it loses rugby league" (SMH, 8/19).
NO REMORSE: In a separate piece, Davidson wrote Seven West Media CEO Tim Worner "felt no buyer’s remorse the morning after signing" an eye-watering A$900M cheque to retain the AFL’s TV rights, declaring, “I’ve got no post-purchase dissidence at all." Worner said the "hottest commodity" in sports broadcasting provided the most valuable “screen real estate” in the advertising market. Worner: "I would much rather have the AFL than have it against us. ... The AFL is a long game with more advertising opportunities than other codes, including 30 second stoppages. The 30 seconds after a goal is the most valuable screen real estate on television." Positive comments on trading conditions in the advertising market helped lift Seven’s shares 0.61%, or 5 cents, to 82 cents, as the wider sharemarket gained 1.45% (THE AUSTRALIAN, 8/20).
EARLY SPRING: In Sydney, Rebecca Wilson wrote for seven days, Smith "must have thought his spring had come early." A new free-to-air TV rights deal with Channel Nine "was trumpeted." So "smug was Smith about the deal that he told anyone who would listen that Foxtel would now have no choice but to jump on and pay top dollar for the dregs of the games." Today, Smith and his chairman, John Grant, "stand badly gazumped," scoring what one media veteran described as the “worst own goal” in the sport’s history. In what can "only be described as the greatest rub your nose in it media conference in Australian sport," Murdoch "changed his travel plans to be part of the Melbourne AFL show that should sound the death knell for Smith and Grant" (DAILY TELEGRAPH, 8/19).
