NRL's much hyped $1 billion broadcast deal unlikely to be realised NRL CEO David Gallop will be under pressure if he fails to deliver a big broadcast rights deal. Source: The Daily Telegraph BLAME it on the AFL. Channel 9 and Fox Sports lodged independent bids for the game's new television rights to begin next year but it was considerably less than $1 billion it sought and several hundred million dollars short of what many within the league fraternity believed the game was worth. Players, officials and fans anticipated a figure as high as $1.2 billion when the game's television rights went on sale yesterday. Industry insiders say the true value is nowhere near that - and the offer from Nine, Fox Sports and Telstra reflected that. The reason is less than sparkling figures in the AFL. In a bitter irony, the first six months of the AFL's widely reported five-year, $1.25 billion deal with Channel 7 and Fox Sports has revealed the networks paid too much and are struggling to recoup their investments. That NRL games are of shorter duration and have fewer natural ad breaks, and the AFL boasts a pre-season competition, has also counted against the NRL bid. By far the biggest concern, though, is that Seven, Fox Sports and Telstra have failed to meet the figures they gambled on, and paid for, television insiders saying it has brought clarity to the NRL's true value. "They won't get what the AFL has got," a source said. "More importantly is that it is very clear to anyone close to this that Seven, Foxtel and Telstra have overpaid on the AFL. "That's now biting hard." For example, Telstra paid $37 million for digital rights but so far has managed to attract just 30,000 extra subscriptions. The AFL also benefited through Foxtel's desire to drive subscriptions in its flailing states - Victoria, South Australia and Western Australia. It is nothing but a fluke that they all happen to be AFL states. To attract more subscriptions in those states Fox Sports created a fully dedicated AFL channel which has brought sparkling ratings through existing customers - but not enough new subscriptions to justify the cost. Given the two major rugby league states, NSW and Queensland, already have a much higher percentage of pay-TV subscriptions, there is less upside for the pay-TV subscriber to compete for the NRL rights. Logically, the NRL will surely argue that it will need to retain the game to maintain those subscriptions. As part of the bid to make the game more valuable, the NRL approached Channel 9 about introducing mandatory ad breaks during games, a proposal Nine has distanced itself from. "The NRL have discussed various means of providing extra breaks but that's a matter entirely for the NRL," Channel 9 managing director Jeff Browne said. "We will simply respond to what we think they can do while preserving the flow and integrity of the game." Clearly, Nine does not want to be held responsible for rule changes that could have fans wailing. Under terms of the current agreement, Nine and Fox Sports were required to lodge separate bids for the new TV deal by yesterday afternoon, guaranteeing them first shot at all the games they currently air - meaning the NRL is unable to sell off State of Origin, for example, as a stand- alone package. If the NRL rejects the bid, as is likely, Nine and Fox Sports will next come together to see if they can provide a joint agreement before the NRL goes to an open market. The shortfall is certain to have a dire effect on the NRL, with many cash-strapped clubs expecting the billion dollar figure to be the bottom end of any new deal. The fact it could likely fall short of that has not been considered. For many clubs, the billion-dollar plus deal was the salve to heal their financial wounds and, if the NRL fails to negotiate the billion dollars milestone, it will surely bring pressure for a management shake-up. For starters, it will be the second time the AFL, through good luck as much as good management, has outdone the NRL in television negotiations. The AFL was the lucky beneficiary of an ailing Kerry Packer in the previous television deal in 2005, when Packer, on his deathbed, paid what everybody believed was overs to secure the AFL rights from Channel 7. It was Packer's final "up yours" to his television rivals before dying soon after. http://www.dailytelegraph.com.au/sport/nrl/nrls-much-hyped-1-billion-broadcast-deal-unlikely-to-be-realised/story-e6frexnr-1226349290817 -------------------------------------------------------------------------------- I would/will cancel my Foxtel subscription in a heartbeat if fox sports don't maintain the NRL rights.