The Seven and Nine networks "will hit media buyers with price hikes in live sport" to recover the "soaring costs" of TV rights, and bring rates into line with increased audiences, according to Darren Davidson of THE AUSTRALIAN. Seven West CRO Kurt Burnette said that he was planning to "push through an increase" of up to 15% next season as a new six-year agreement with the Australian Football League rolls up. Burnette: "The rise is in line with where we think the audience and new ways of selling will take us. The rates will change accordingly. The 15 or 30 seconds between goals is the most valuable real estate in Australia. If you’re watching live sport you’re not going to look away or fast-forward. It’s unavoidable. We have some ideas about how we can make these breaks even more impactful." Under the AFL’s new six-year contract, Seven has agreed to pay A$840M ($643M) in cash and A$60M ($46M) in contra advertising -- a 50% jump on the previous deal. In the short term, investors and analysts "may ask if sports rights are overpriced as the costs of the programming weigh on the network’s profitability." For advertisers, the AFL season "is a major branding opportunity to raise their profile in front of millions of viewers." For its part, Nine has agreed to pay A$625M ($478M) over five years for the NRL rights. Nine also earns A$20M ($15.3M) in annual simulcast fees from Fox Sports. Insiders at Nine said that the network was modeling a "similar price rise" of about 15%, taking the average cost of a 30-second TV spot up to A$34,500 ($26,400) (THE AUSTRALIAN, 10/3).
