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No billion dollar TV deal for the NRL rights?

Discussion in 'Rugby League Forum' started by WAMF, May 8, 2012.

  1. WAMF

    WAMF Well-Known Member

    +408 / 0
    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.
    I would/will cancel my Foxtel subscription in a heartbeat if fox sports don't maintain the NRL rights.
  2. Berkeley_Eagle

    Berkeley_Eagle Current Status: 24/7 Manly Fan 2016 Tipping Competitor

    +2,115 / 14
    Ball in the air as Nine and Fox bid $1b for league

    Date: May 08 2012

    Julian Lee, Brad Walter
    CHANNEL Nine and the pay TV programmer Fox Sports will have to wait three months to to see whether their $1 billion-plus bid for rugby league broadcast rights has been successful.

    A decision on whether to accept the joint bid - lodged last night at the NRL's headquarters in Sydney - will not be made until August.

    To have the bid succeed, Channel Nine might forgo its exclusive live rights, allowing Fox Sports to screen matches simultaneously live.

    That would drive the price Fox Sports would pay to above $100 million a year, allowing Nine, which is labouring under $2.7 billion of debt, to keep its costs down. It might have to pay $90 million a year to screen four matches a week, up from three under the current deal.

    Sources close to the negotiations say such a deal is a ''distinct'' possibility''. In negotiations with the AFL last year, Seven kept its costs down by forgoing its exclusive live rights and allowing Foxtel to screen every game live. Foxtel's bill doubled as it picked up the lion's share of the $1.25 billion eventually paid to the AFL for the five-year deal.

    As the current holder of league rights, Nine has first and last rights on the bid, but only if another bidder does not exceed Nine's initial bid by 20 per cent.

    Seven and Ten have until August to come up with a better offer for the five-year contract.

    Ten, which is lagging in the ratings, does not have a major sport to its name, though its chief executive, James Warburton, said he is ''interested in any sporting rights that come up''. Seven, which already has the AFL, has said it is interested in the three top-rating State of Origin matches. There is speculation that Seven will take on all the rights and then sell some matches to Nine or Ten.

    Under new anti-siphoning legislation which has yet to be passed, Nine would be able to screen matches on its secondary channels. Matches such as the grand final will be kept on free-to-air TV.

    Internet and mobile phone rights, for which Telstra pays about $10 million a year, are expected to increase in value dramatically.

    The threat to the value of Telstra's rights posed by the TV Now service of rival Optus has since abated. Optus was streaming games near-live to its mobile phone customers but last month a court ruled the service breached copyright.

    The NRL is keen to bridge the gap between its audience and advertising revenue. The NRL commands a cumulative TV audience of 134 million across the 2011 season - 10 million more than the AFL. But, according to estimates from the media agency MagnaGlobal, the AFL commands between $115 million and $125 million in TV ad revenue whereas the NRL is closer to $100 million.

    Victor Corones, the managing director of MagnaGlobal, said the value of sport was set to rise.

    "There are a number of reasons why broadcasters will pay such a high price for the rights. [Games] reach a lot of people, they cut across demographics and they are a very effective way to cross promote a lot of your programming to that audience."[hr]

    Under-20s could get a free kick in new TV deal

    Date: May 08 2012

    Brad Walter

    UNDER-20s matches could be broadcast on free-to-air television if Channel Ten wins the rights to Monday Night Football and Sunday afternoon games.
    With rights holders Channel Nine and Fox Sports yesterday tabling bids believed to be worth $1 billion for the rights to all NRL and representative fixtures until 2017, the ARL Commission will now open negotiations with rival broadcasters.
    While no announcement is expected until August, the Herald understands that Channel Ten representatives intend to make contact with the ARLC today.
    Ten is interested in any premium sport content, and the Herald was told yesterday by a number of sources that the network will bid strongly for Monday Night Football and a Sunday afternoon game.
    In addition, Ten might offer to broadcast the National Youth Competition, which regularly out-rates A-League football and Super Rugby matches on pay-TV.
    The recent under-20s State of Origin match was shown head-to-head with the NSW Waratahs-Melbourne Rebels clash on FoxSports and attracted an audience of 139,000 compared with 160,000 for the Super Rugby fixture.
    It is expected that such a proposal would be viewed favourably by the ARLC but Ten will face fierce competition from Nine and Seven for NRL matches.
    Channel Seven is keen on State of Origin, and there are even
    suggestions the broadcaster could bid for all NRL matches. Seven could then onsell the rights to some matches or broadcast them on secondary channels.
    Neither the NRL, Nine nor Fox Sports would divulge details of the offers lodged by 5pm yesterday as that would undermine the broadcasters's prospects of retaining the right to make a final bid after the other networks have submitted theirs.
    However, given that Nine and FoxSports would lose the last right of refusal on the new broadcast deal if a rival bid is 20 per cent higher than the offers they submitted yesterday, it is expected the current rights holders would have made significant bids.
    Nine cannot afford to lose the NRL rights, while Foxtel needs rugby league to stay afloat financially as the code dominates pay-TV ratings figures, and many fans would be expected to quit their subscriptions.
    Industry sources suggested Nine and Fox Sports were likely to offer $100 million each a year over five years, although it is believed Fox Sports will pay a greater percentage of the $1 billion deal if Nine forgoes exclusivity to free-to-air matches to enable the pay-tv broadcaster to offer subscribers live coverage of all eight matches each week.
    Fox Sports is also thought to have offered to establish an NRL channel identical to the AFL channel it launched this season after winning the AFL pay-TV rights.
    It is understood Nine is keen to broadcast four matches each week - an increase from the two Friday night games and one Sunday afternoon matches it shows on free-to-air.
    Nine and Fox Sports have also discussed forming a joint venture to buy all the NRL rights and then decide how to divide the spoils.
    However, the ARLC would prefer to split the rights itself, and is expected to seek separate offers for the following television ''franchises'':
    Friday night double-header;
    Super Saturday
    Sunday afternoon
    Sunday evening
    Monday Night Football
    The return of a Saturday afternoon match and introduction of Thursday night games have also been mooted.
    The amount of the new TV rights deal will determine the size of the ARLC's annual grant to clubs and the salary cap for players for the next five years.
    Figures up to $1.4 billion have been mentioned for the next rights deal. The ARLC confirmed offers from Nine and Fox Sports had been received but would not speculate on the amounts.

    Seven waits in wings for NRL bid

    by: Brent Read
    From: The Australian
    May 08, 2012 12:00AM

    THE Seven Network set the scene for a titanic battle over the game's broadcasting rights yesterday by declaring its love for rugby league on the same day the Nine Network and Fox Sports tabled their opening bids to televise the sport for the next five years.

    Under the game's existing broadcasting deal, the Nine Network and Fox Sports, which currently hold the rights, had until yesterday to submit their opening salvos. The ARL Commission confirmed those offers had been received, although it declined to provide any details.

    The game is hoping to burst through the $1 billion barrier for its next broadcasting deal and has already indicated it would head to the marketplace regardless of the offer from the Nine Network and Fox Sports. That will allow the Seven Network to enter the race for rugby league as soon as this week.

    The Nine Network's chief rival has indicated a particular interest in State of Origin, considered the code's flagship. As part of the negotiations, the networks were expected to submit separate offers for the NRL premiership, Origin and Test football, allowing the game to directly measure the offers for the respective parts of the game.

    "We love the NRL but we have no comment on the current negotiations," a Seven Network spokesman said.

    Nine was also reluctant to fan any more flames over the broadcasting negotiations, which have been the subject of endless analysis in recent weeks.

    "We lodged our bid today," Nine's managing director Jeffrey Browne saiad. "I am very pleased with our bid. I expect to have further dialogue with the NRL."

    Asked whether he expected the commission to take the rights to market, Browne said: "That's up to them. We put a very, very strong bid in. I am sure they will give it serious attention."

    Browne declined to reveal whether the initial bid would meet the $1bn mark.

    "They will do very well and they deserve to," he said.

    The game is exploring a range of options as it looks to cash in on the most important broadcasting deal in its history. As well as the potential for increased advertising content, The Australian understands the game has also discussed the potential for allowing the broadcasters access to GPS information during the telecast of matches.

    Most clubs now record GPS information during matches by using a small device which is placed on the back of the jersey.

    It allows the clubs to record a host of statistics including the distance players cover, the speed at which they cover it, heart rate exertions and the impacts in tackles.

    Network Ten has also indicated an interest in bidding for the broadcasting rights, although it was reluctant to comment yesterday.

    While yesterday's deadline signalled the start the start of the bidding war, some NRL club chief executives have suggested it could be months before the process reaches a conclusion.

    The talks will take place amid mixed TV ratings this season. Although figures are on the rise on free-to-air television - ratings are up nearly 6 per cent - the pay-TV ratings have been inconsistent. Sunday afternoon and Monday night football are down while two of the three Saturday slots are up.

    "We can confirm that the written offers have been formally accepted through a legal office," a commission spokesman said.

    "Only those directly involved in the negotiation process will be aware of the details of the offer. As much as we can appreciate the interest in the rights negotiations, there are strict and binding confidentiality procedures involved.

    "The NRL has for some time expressed its confidence in achieving a substantial increase in rights fees based on rugby league's dominance of television ratings."

    Paul Kents article is all bull****...
    • Like Like x 2
  3. voicefromthehill

    voicefromthehill Well-Known Member Premium Member

    +1,235 / 9
    It would seem that way, but it would be embarrassing for all clubs if they have hung their hats on an unrealised broadcast deal.
  4. Chip and Chase

    Chip and Chase True Supporter Staff Member Administrator Premium Member 2016 Tipping Competitor

    +6,282 / 44
    What a surprise !!! $1.2bil was always pie in the sky stuff.

    Then again this could just be more rhetoric from Nine and Fox to try and sell the price down with the help of their News Ltd cronies in the media and muppets like Gallop in the administration.
  5. Ryan

    Ryan Well-Known Member

    +6,119 / 287
    Imagine god forbid the salary cap remains the same, and Parramatta have just outlayed $800k per annum for Hopoate, and Hayne would be on about the same.

    Almost 45% of their cap on two players :exclamation:
  6. Masked Eagle

    Masked Eagle Well-Known Member

    +976 / 0
    Not sure who to believe, but it sounds very feasible to me that the Seven and Foxtel might have realised that they've paid too much for the AFL rights and that would mean they aren't going to be as reckless when it comes to the NRL rights. That being said even if we don't get to the $1bn mark, its still going to be a hefty increase from the $500m odd we are currently getting. Although I bet there are a few NRL Club CEOs very nervous at the thought the new Salary cap might not be as high as they first thought.
    • Like Like x 1
  7. Frogz

    Frogz Don't mess with the goat, he has photos. Premium Member

    Sydney, Australia
    +1,392 / 36
    2 Factors.

    1.The great man, Kerry Packer, sucked in 7 and foxtel on his death bed. They definately paid overs for the AFL

    2. We have Gallop, the bigest dope to ever run the League, in control of negoatiations.No chance.
  8. Frank

    Frank Well-Known Member 2016 Tipping Competitor

    +1,159 / 26
    I wonder if we are hanging our hats on the very same expected deal in our current negotiations with players.
    • Like Like x 1
  9. Rodo

    Rodo Goldmember 2016 Tipping Competitor

    Southern Sydney
    +484 / 14
    The people running the AFL are smart. The AFL broadcasting rights deal has been set up so that it starts 1 year before the NRL's deal so this means they get to raid the networks coffers before the NRL has a chance. This provides them with more potential to get a far larger valued deal than the NRL.

    Hopefully Seven and Ten put in strong bids or else it will be extremely difficult to get to the $1 billion Gallop has been touting.
  10. jbb/james

    jbb/james Well-Known Member

    +885 / 21

    Maybe it will be a little of the same. Foxtel have to win the rights somehow. A larger bid by 7 will ensure fox have to up the ante and possibly pay overs or stand to lose a massive subsciption base.Why would anyone pay foxtel if the footy was gone. Maybe a few horse racing nuts and some kids channels for baby sitting
  11. MadMarcus

    MadMarcus Local Lunatic 2016 Tipping Competitor

    +5,825 / 53
    Nice fluff piece from the Daily Propaganda.

    This was my favourite part:

    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.

    Less upside maybe because they have been on such a sweet wicket for so long, but if Fox doesn't show the NRL I don't expect NSW and Qld subscribers will be hanging around to watch reruns of Seinfeld and the Simpsons.

    The fact of the matter is that Foxtel would simply not be economically viable without the NRL. If you think I am overstating it, why do you think we had Super League?

    You would think they would be more than aware of the downside if they don't get the rights. If they really are as stupid as this article would have you believe, I hope the NRL calls their bluff, because that will be the end of Foxtel in Australia.
  12. torana355

    torana355 Well-Known Member Premium Member

    +1,491 / 27
    Ive talked to the people i know that have Foxtel and they all said they would cancel it if did not have the NRL, i too would cancel my subscription. These days people can download Movies and Tv shows off the net so Foxtel is not needed for anything but live sport. I hope the NRL are smart enough to take advantage of this.
    • Like Like x 1
  13. Brookie4eva

    Brookie4eva Well-Known Member

    +175 / 1
    "To have the bid succeed, Channel Nine might forgo its exclusive live rights, allowing Fox Sports to screen matches simultaneously live."

    This is the bit I like, all NRL games live on Fox would be great.
  14. AshfieldBazza

    AshfieldBazza Active Member

    +57 / 0
    Yes all the games live would be great on Fox but also saw on the SMH website that Fox are thinking of the NRL channel similar to the Fox Footy Channel, they could be great if done good. Hopefully they would get rid of Matty Johns and MG if having to make more content exclusively for the channel as may not have enough time with radio commitments, can't say i have much time for them on Fox Sports. The amount of times i watch NRL on Fox has dropped significantly due to them
    • Like Like x 1
  15. clontaago

    clontaago Well-Known Member

    +156 / 1
    The AFL deal was only done last year. Kerry was good, but not that good considering he died 6 years prior.
  16. Frogz

    Frogz Don't mess with the goat, he has photos. Premium Member

    Sydney, Australia
    +1,392 / 36
    Push to trump Packer bid for AFL TV rights
    By Caroline Wilson, Christian Catalano and Malcolm Maiden
    December 29, 2005
    Page 1 of 2

    KERRY Packer's final act on the Australian corporate stage — his spectacular $780 million bid to keep AFL football on Channel Nine — is in danger of failing as rivals Seven and Ten consider making a last-ditch counter-offer to snare the deal.

    Less than a week after the bid by Mr Packer's Publishing and Broadcasting Limited was revealed, the rival consortium is believed to be preparing a final assault for the prized AFL broadcast rights from 2007 until 2011.

    Seven and Ten executives are believed to have broken into their Christmas holidays in recent days to analyse the PBL document and decide whether to exercise their legal right to match it.

    The AFL have had it ggod for a long time...Dont think its just been a year...This is how far we have come under Gallop
  17. clontaago

    clontaago Well-Known Member

    +156 / 1
    Ah yes but they still didnt have to take it to the $1.2b recently just because of a deal that was done 7 years ago. If they paid overs back then they would have known not to get sucked in this time around.

    My point is that the TV networks are bluffing. They know exactly what they can afford and what the returns will be, and the article from Kent is absolute rubbish.
  18. eagles2win

    eagles2win Well-Known Member

    +494 / 0
    Rugby League has more content then a code that is really only played in one country.
    Said this they really need to do this :
    NSW Cup,
    Qld Cup,
    Rep footy (pacific cup - yearly)
    • Like Like x 1
  19. jbb/james

    jbb/james Well-Known Member

    +885 / 21
    I know there are probably license and regulation issues that a mere mortal like myself does not understand. But why can't channel 7 buy the lot put 4 games on free to air and put the other 4 on 7 mate and beam those games to certain households that pay $200 a year for the right

    Even 300 000 households at 200 a year being conservative recoups a vast amount of the investment and provides them with massive scope

    What a massive kick in the nuts that would be to those who deserve a massive kick in the nuts.
  20. Hamster Huey

    Hamster Huey Space Invader Premium Member

    +990 / 7

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