Broadcast options for Australian Rugby

[Adam84]

100% Foxtel are still interested, they simply don’t want to be pulled into a bidding war with a streaming service. Rugby Union is the canary for other sporting rights coming up for renegotiation in the next 2 years, Foxtel don’t want to show a weakness now that other sports will also target when their rights come up for negotiation

 

[Slim 293]

100% Foxtel are still interested

Indeed......... if they weren't they wouldn't be going so hard against RA and Optus in their toilet paper substitutes.

 

[mst]

The reality of this process is all media outlets are looking to get the best deal at the lowest price. Leaks in papers, rumours and stories is the norm in these process. No bids being put forward for the formal process is nothing unusual. Houses still see even though no one out in a bid at the "formal" auction.

RA will take the bests deal irrespective of the process they have in place. Those interested know Foxtel want to play games and can play the Kayo streaming angle, terrestrial broadcast angel or a combination of both. So they too can play the same games buy rolling in at the 11th hour with a deal and force Foxtel to show their hand.

The reports that Optus are talking with production companies is what RH and I have been suggesting where RA may be doing themselves out of a really fantastic opportunity. Going out to market with a product (so RA are the production company) potentially changes the whole deal. It means for Optus, Foxtel, Danz and whoever it's about more "delivery" not production which places it in a market that is really comparative as streaming providers and telcos are desperately wanting product without much overheads.

 

[barbarian]

Does RA have enough spare cash to become a production company though? It's certainly an interesting idea, but would surely cost quite a bit to pull off.

 

[Slim 293]

They should consult with the NBL to see how they've gone about producing their own content, and then supplying it to ESPN and Viceland.........

Tennis Australia and Supercars are also their own host broadcasters, but they're certainly more flush with cash.

 

[WorkingClassRugger]

Does RA have enough spare cash to become a production company though? It's certainly an interesting idea, but would surely cost quite a bit to pull off.

We have an interesting test case in the Shute Shield broadcast. What does that cost a season for 25 odd games? Looking to use companies in each of the locations as opposed to flying a crews cross country.

 

[mst]

Does RA have enough spare cash to become a production company though? It's certainly an interesting idea, but would surely cost quite a bit to pull off.

Your spot on about the cost.

But on the other hand they may have to take the gamble, be creative on how nad invest as the key risk ehre is that for the like of Optus it may up their cost and drag down what they can offer RA. That then open up the Foxtel low ball offer and RA is in a world of hurt with a shite deal.

Slim's post above is a good idea. Imagine if RA were to team up with tennis, Supercars, NBL etc (sports we don't directly compete against) as producers to share costs it would change the market and yield a better ROI.

 

[Slim 293]

Looking to use companies in each of the locations as opposed to flying a crews cross country.

Just in regards to the on site broadcasting for sports............

All of the OB truck facilities on location have always been supplied by a third party company (it used to be Global, now NEP who acquired them and also look after the pre-production for the AFL and cricket now) and are hired out by the networks on game day.

They're generally the same group of freelancers who change their bibs depending on which network they're working for on the day - the networks generally only need to send a small crew along with commentators around for their own hostings.

NEP is also very interesting now as they have hubs in Sydney and Melbourne that they can operate from without having to send a truck to the location............ all they do is send a skeleton crew with cameras and everything is sent back to the hub to be switched and broadcast back out again.

So the Olympics will likely be broadcast out of a shed in the Docklands..........

There was talk NEP might acquire Sky Sports in NZ, and hypothetically they could produce and broadcast the Mitre10 Cup from their Sydney hub.

 

[molman]

Just in regards to the on site broadcasting for sports....

@Slim 293, I'd be curious where the lines are and how much of the value add and IP FoxSports actually provides. I mean is it just hosts and a producer managing the general flow of the broadcast or is there a whole lot more?

I mean all those graphics and overlays are outsourced to someone. The footage and production with switching is outsourced to someone. I mean I'm curious what FoxSports actually does have inhouse? People writing scripts to prep the hosts? producers managing the holistic flow of the broadcast? People running around to intercept players for 1/2 time interviews? Hair and makeup?

 

[Slim 293]

I couldn't really speak for Fox, but depending on the production on match day they might have a team of producers, some production staff(both in house and freelance - evs operators etc.), commentators, makeup for the control studio/control room side of things........ and then then the on site broadcast company/NEP whoever might provide camera operators and other ground staff..........

It's all a bit of a grey area, because NEP are now also hired by some of the networks to do the production/pre-production part as well, so they're supplying all of the pay cheques.

 

[COX'S ROUTE]

Anyone else see todays Telegraph?

Virtually Zero Rugby coverage. Massive Fox Advertising spread and no mention of Rugby.

Pages and pages of league crap.

Would seem News/Fox playing hardball. or maybe they have actually walked away.

 

[Rob42]

I couldn't really speak for Fox, but depending on the production on match day they might have a team of producers, some production staff(both in house and freelance - evs operators etc.), commentators, makeup for the control studio/control room side of things.... and then then the on site broadcast company/NEP whoever might provide camera operators and other ground staff....

It's all a bit of a grey area, because NEP are now also hired by some of the networks to do the production/pre-production part as well, so they're supplying all of the pay cheques.

So - if RA was to take on the production of all the content, and sell that on to Fox, Optus, or whoever - does that really end up costing RA? The Pandaram article suggests Optus would include the production costs in their offer to RA - but of course, Fox would do the same. If it's all outsourced to the same parties anyway, it's just a matter of who writes the cheque to NEP.

As an aside, rugby.com.au is a good example of content production in-house to fill the gap from other media - RA have done a reasonable job there, though it's obviously run on the smell of an oily rag...

 

[Slim 293]

If RA took on the production themselves they would be forking out for production costs, whether they manage that themselves or hire a third party company to manage that for them...........

The benefit of that approach is that the networks (especially the FTA networks) like to receive pre packaged content.

 

[RedsHappy]

So - if RA was to take on the production of all the content, and sell that on to Fox, Optus, or whoever - does that really end up costing RA? The Pandaram article suggests Optus would include the production costs in their offer to RA - but of course, Fox would do the same. If it's all outsourced to the same parties anyway, it's just a matter of who writes the cheque to NEP.

As an aside, rugby.com.au is a good example of content production in-house to fill the gap from other media - RA have done a reasonable job there, though it's obviously run on the smell of an oily rag.

R42 - a very good point. Of course you're right - any one bidder's bid must absorb total production costs as a deduction from their assumed gross revenues derived from buying the rights, they may try to share them (eg potentially FTA and Pay TV for overlapping matches) and in Foxtel's case there will be advantageous unit cost efficiencies as they produce many sports and bulk buy a lot of facilities whether outsourced or not (they call themselves 'the biggest production co in Australia').

But if RA decided it'd produce and originate all rugby content itself broadly the same costs would apply for it as do for all bidders and thus non-producing bidders would logically increase their $ bids pro-rata as no productions costs apply.

The bigger question then being: does RA has have the strategic self-confidence and spirit of radical innovation in order to consider such a shift to self-production?

 

[Adam84]

It's really just transferring the production costs from one part to another, I doubt RA would even develop their own production team, more likely to outsource it to another organisation. RA could do that and it might turn out slightly more profitable for them to do that, but its done so at taking on the risks associated with production.

 

[COX'S ROUTE]

I have no doubt RA could produce in-house, and probably do a half decent job. They would be hiring professionals.

The problem is getting the sponsorship and advertising to replace $50 Mill media deal.

On face value, if they believe they can sell the advertising they should cut out the middle man, potentially will be many millions in front.

 

[sunnyboys]

The Australian today reporting some quotes from interim Chair McLean referring to the broadcast deal process - "there's a band of participants" and "its a bit more widespread than people think". this is in regards to those who signed onto the non-disclosure part - i don't think bidding has actually started yet.

its in an article discussing new aboard appointees and how one of the three will most likely be Chair. Wiggs is an interesting one - was there to build up Supercars - knows what Ten can produce in that sports space - and also was there for the private equity injection into that sport from Archer Capital . who then took it partially behind a paywall.

 

[Number 7]

Anyone else see todays Telegraph?

Virtually Zero Rugby coverage. Massive Fox Advertising spread and no mention of Rugby.

Pages and pages of league crap.

Would seem News/Fox playing hardball. or maybe they have actually walked away.

There is currently a fairly obvious campaign at Newscorp to talk Rugby down during the bid process. One of the disappointing things for me is that Jamie Pandaram seems to be heavily involved as a Newscorp mouthpiece - I previously thought of him as a pretty good Rugby journo.

Joe Aston at the AFR highlighted Newscorps co-ordinated lying campaign again today: https://www.afr.com/rear-window/news-corp-s-rugby-revenge-campaign-kicks-on-20200309-p548b2

For those of you that can't get behind the paywall, here is a telling paragraph by Joe highlighting how Newscorp and particularly Pandaram have been disingenious with the truth:

" Its "exclusive" by Jamie Pandaram on Thursday (which The Oz also ran online), "Optus to secure Rugby Australia broadcast rights on cut-price deal", was astonishingly wrong in both fact and premise.​

"Three weeks after putting their broadcast package to the open market," it claimed, "Rugby Australia has not had a single offer, leaving Optus to snap up the broadcast rights in a new low for the game."​

Rugby Australia is running a blind bid process which is yet to close. The governing body is currently engaged with multiple parties in its expressions of interest phase (which was, unremarkably, extended by a week). So no, it "has not had a single offer" because the bidding hasn’t started yet."​

​

Time will tell however Raelene Castle has brought in a media rights specialist to run the tender. They have been clever in snapping up content (Shute Shield, Lions tour) and they have brought a new board member in (Wiggs) who re-invigorated Supercars media presence. This may play out quite differently to how Newscorp thinks as detailed in their scare campain.

And remember, the only party in this argument that is in a weaker position financially than RA at the moment is Foxtel.

 

[molman]

@Slim 293. Thanks for the insights. Not an industry I have had anything to do with. After your comments I'm actually curious what value FoxSports actually brings, what they actually provide beyond all the elements that seem to be outsourced and how easy it is to potentially replicate much of what they do. From your comments it seems like there is not even the prohibitive capital expenses due to the why the industry has evolved so the barriers are actually pretty low.

 

[mst]

It's really just transferring the production costs from one part to another, I doubt RA would even develop their own production team, more likely to outsource it to another organisation. RA could do that and it might turn out slightly more profitable for them to do that, but its done so at taking on the risks associated with production.

Ah, now this is where we can draw on the experience of other sports. If you think about digital media (websites, social media, podcast, marketing etc) you can produce it all in one hit which offsets cost and you get better and more content that you control. It's why many sports are shifting to producing their own content.