Broadcast options for Australian Rugby

[barbarian]

The timing of that article is a bit odd. What does it prove? Who really cares?

Of course the Christian players were a bit aggrieved. We all knew that. The article can't prove it affected anything beyond a single camp though.

 

[RedsHappy]

I have been following this one for a few years and it's an interesting story when it comes to TV deal options and making it work. Although its from the US, like Rugby the sport is considered a niche sport, was on the decline (ratings / attendance) and their choice when it came time to renew their TV deal was certainly a different approach. The broadcast partnership arrangements are interesting but work for both parties. At the time it was considered a gamble and was fairly unpopular with fans.

The down side for RA with something like this is the investment cost. I don't think RA could afford this in house production model.

I believe it's worth a read. It would be great if Rugby had the same success.

https://www.sportspromedia.com/interviews/nhra-brad-gerber-drag-racing-commercial-growth

https://www.strutmasters.com/nhra-stock-rising/

https://www.nhra.com/news/2019/nhra-launches-new-online-video-and-live-streaming-service

Really enjoyed looking through these links mst, so many thanks. (Not just re rugby, I do a lot of work in business strategy so it possessed an even broader interest for me.)

Great example of how to reconstruct a niche sports brand (albeit in a huge market space), its media identity, reach enlarged and and strategically important demographies, get control of media origination and production (so important) and use that to drive far higher social media penetration, and so on as the virtuous circles connecting all these start to reinforce each other.

Rugby might well have considered such a business paradigm shift but:

- needed to be started a decade + ago

- needed a radically different mindset and skillset at every level of the ARU/RA

- needed an ARU/RA board that grasped and understood the types of radical new media and core business thinking that inspired the NHRA to success but such was/is a zillion miles from the types of CEOs and board members that have been the ingrained, ossified, old world preferences of our RUs. (Hence why I have been saying for many years here that the values and culture paradigms that have dominated elite rugby in Australia for decades are the essential roots of its decline and decay in code market shares terms in Australia.)

 

[drewprint]

The timing of that article is a bit odd. What does it prove? Who really cares?

Of course the Christian players were a bit aggrieved. We all knew that. The article can't prove it affected anything beyond a single camp though.

It serves to assist News Corp in driving broadcast value and interest down. Gotta keep flinging that mud every few days to keep this battle top of mind.

 

[Strewthcobber]

All publicity is good publicity?

 

[Strewthcobber]

Even nine getting in on the cost cutting action now

Nine has identified the Ashes, 2020 men and women’s cricket T20 World Cups and international TV programs as possible targets in a drive to cut $100m out of its struggling free-to-air television business, as the media company reports a 9% drop in profits.
The Ashes had “great ratings [which was] not realised into revenue overall” given the high price of the rights, Marks told investors at a half-year results briefing on Wednesday

 

[qwerty51]

No surprise the companies that paid massive overs for AFL and NRL rights are struggling. As good as they rate, not worth the money at all.

 

[mst]

Really enjoyed looking through these links mst, so many thanks. (Not just re rugby, I do a lot of work in business strategy so it possessed an even broader interest for me.)

Thanks RH. Its the strategies and ideas that appeals to me as well as the different approach to broadcasting. I think there are some parts of this that are translatable and done right could place RA at the forefront of in house produced sports broadcasting in Australia. Could RA build a digital platform for a subscription based service? They could potentially either partner or offer it up at a cost as a platform for some other select sports.

 

[Strewthcobber]

No surprise the companies that paid massive overs for AFL and NRL rights are struggling. As good as they rate, not worth the money at all.

The CEO called out the NRL as one of their most profitable parts of the business along with the news and Married at First Sight (!?)

 

[RedsHappy]

Thanks RH. Its the strategies and ideas that appeals to me as well as the different approach to broadcasting. I think there are some parts of this that are translatable and done right could place RA at the forefront of in house produced sports broadcasting in Australia. Could RA build a digital platform for a subscription based service? They could potentially either partner or offer it up at a cost as a platform for some other select sports.

Yeah mst I think it's an exciting and potentially viable thing for RA (and many sports) to be doing, at least conceptually in today's market spaces and demographies. You create direct, interactive links with your customers, you offer them real-time alternatives in how they view, engage with and consume the game, you can package different game levels differently, you can deliver online stats and player data live-in-game, just a truckload of wonderful variations in a visual code experience can be offered (as your MHRA links so aptly demonstrated).

We can but theorise though. This kind of serious presentational innovation, commercial imagination and freshness of media strategy requires the right staffing (people who have done this kind of stuff before, have it in their veins and know how to monetise it too) and high level board support as by definition it breaks habitual media moulds and is of a type the over-45s typically have never seen or experienced or even understand.

The hard truth is: RA has trouble even getting links in its email outs to work, its core web site is comparatively dull and just mimics trad media, and so on. Unfortunately I just don't think RA has the culture and ballsy drive to do anything like your highlighted text above. But it should.

 

[RedsHappy]

The CEO called out the NRL as one of their most profitable parts of the business along with the news and Married at First Sight (!?)

FTA TV, as you imply, world-wide lives today on live sports, reality TV and live news. And well-run FTA-based TV business still make excellent margins and pay reasonable dividends. The idea you often see here that, as a class, they are about to die any minute is vastly exaggerated, almost mythical.

They can afford to pay big money for big code share sports as they can in whole or in large part monopolise that sport's TV viewing base and that base typically remains hugely attractive to advertisers.

 

[RedsHappy]

An aside as it was discussed above:

The 6N Comp owners are in fact aggregating all their media rights to the 'autumn internationals' and other related 6N matches and this is quite a significant development:

"The member unions of the Six Nations rugby union tournament have agreed to pool their media rights, including autumn internationals and other test matches, ahead of the anticipated investment from CVC Capital Partners.​

​

Six Nations Rugby said that, from the 2021 season, all six unions and federations will be “unifying” the operations and media rights of the Women’s Six Nations, the under-20 Six Nations, respective autumn internationals and other international tests alongside the men’s Six Nations.​

​

The six unions in England, France, Ireland, Italy, Scotland and Wales currently sell the domestic and international media rights to their home international tests (outside of the Six Nations) in individually-negotiated deals. The Pitch International agency has been particularly active in distributing the international rights to the matches on behalf of respective unions."​

​

https://www.sportbusiness.com/news/...ns-centralise-autumn-international-tv-rights/

 

[mst]

It is understood V’landys (the horse racing guy) and NRL commercial manager Andrew Abdo travelled to San Francisco and Los Angeles, where they met executives from streaming giants Amazon Prime, Facebook and Google.

Now this one interesting and the timing is really curious noting their current deal goes to 2023. Is the timing coincidence, possible a message to certain "budget conscious" parties about future expectations? Perhaps a fear that if a competitor is forced to shift to a different platform and they end up better positioned and a few years further down the track? Regardless of the motivation, if they are really exploring these options RA needs to doing so as well.

https://www.theaustralian.com.au/sp...t/news-story/2302d0c3d634c7f406cd9923df739622

 

[mst]

An aside as it was discussed above:

The 6N Comp owners are in fact aggregating all their media rights to the 'autumn internationals' and other related 6N matches and this is quite a significant development:

RH, do you think this is a new trend as sports are now seeing the risks that streaming services have now introduced in that it can split broadcasting a sport across several providers so you may have "a sport product" carved up and broadcast by several means which managed poorly could lock out supporters based on what subscriptions or access they have? On top of that as it's not a bulk lot and not exclusive rights (to that support product) the value is diminished in the eyes of broadcasters?

Example of a current good split and how complex it can get: NFL has deals with CBS, NBC (owned by Comcast), Fox, and ESPN (owned by Disney/Hearst). Fox has full rights, the other 3 have Sunday night football rights and annually rotating rights to the Super Bowl. Additionally ESPN has Monday night rights and Fox exclusive Thursday night rights. Then you have Verizon and Amazon with different levels of streaming rights.

 

[RedsHappy]

RH, do you think this is a new trend as sports are now seeing the risks that streaming services have now introduced in that it can split broadcasting a sport across several providers so you may have "a sport product" carved up and broadcast by several means which managed poorly could lock out supporters based on what subscriptions or access they have? On top of that as it's not a bulk lot and not exclusive rights (to that support product) the value is diminished in the eyes of broadcasters?

Example of a current good split and how complex it can get: NFL has deals with CBS, NBC (owned by Comcast), Fox, and ESPN (owned by Disney/Hearst). Fox has full rights, the other 3 have Sunday night football rights and annually rotating rights to the Super Bowl. Additionally ESPN has Monday night rights and Fox exclusive Thursday night rights. Then you have Verizon and Amazon with different levels of streaming rights.

Great points and facts mst.

To me it's mostly a plus sum game for sports assuming they have the business and technology nous to optimise for their code the mixed use of FTA, Pay TV, IP-based OTT sub services as you reference.

There is audience overlap of course amongst these delivery modalities but there are also genuinely different sub-markets and consumer-type demographies with different consumptive characteristics lying in wait that, if captured, can expand the total reach of a code in eyeballs terms and thus the monetisable gross no of eyeballs and thus the advertising and/or subscription revenues that can be built off that.

For example: There are age-based market 'cut' dynamics: Millennials and Gen X are obvious naturals for IP-based services running on multiple devices, they have left FTA behind and Pay TV largely locks down to a street address and is immobile. In contrast the more affluent over-50s are still a strong FTA market in general. Then there is a 'casual vs obsessive' fan cut of the market - demos that will be happy to watch a big game occasionally on their favourite pizza and sofa night and that's all they want vs consumers who just want huge helpings of a code 24/7 (see the dedicated Aust Fox AFL channels for example). Another cut is 'single vs multi sports on show', consumers that love all main sports and want all the courses for dinner so to speak vs those who really just love one or maybe two codes and that's all they want.

These differences in market cut drive enhanced economic opportunities for a sports code; in fact, put another way, a sports code will likely suffer in global market share terms if it does not seek to execute media strategies that exploit all of these market types simultaneously. The best run sports codes (rugby is not one) know this and are already acting on it big time in a way that has made them richer and more globally powerful.

Then on top we have the key techno-economic fact that, unlike FTA and cable or sat Pay TV, IP-based services require no specialised transmission infrastructure and dedicated TVs the end. More or less the consumer pays for the transmission service and does not need a dedicated display device at the end of the line - this radically changes the cost economics of sports delivery and thus radically changed the media-buying landscape for sports rights and this alone has its major impacts on monetisation strategies for sports owners - they can start to deliver and produce their own dedicated visualisation material (live and recorded) and sell their sports direct to consumers, they don't any more require 'distributors' with fixed infrastructure. Plus this too which is highly important: IP infrastructure is globally pervasive and technologically and in standards terms homogenous whereas FTA and Pay TV largely required differentiated and capital-costly delivery systems in each main geography. So instant, always-on, 24/7 global reach for a sports code is possible in far more flexible and cost-effective ways than in the pre-IP era.

Next, the most central fact of all in this realm - just as a huge global population gets more affluent and desires more material goods, better food, etc, so it has proved to be a law of entertainment appetite that mass affluence brings, surprise, surprise, an increasingly large mass global market demand pattern for live sports, both big codes and niche codes. The US NFL and NBA and the UK EPL have exploited this simple fact brilliantly. This global mass market expansion brings with it a huge, rapidly expanding eyeballs market that, as per the analysis of market consumer types above, is splintered via age, geo factors and technology flexibility etc all of which can be exploited most optimally by a smart delivery mix of FTA, Pay TV and IP services. The bigger and better run big sporting codes are running hard with this opportunity.

So, to come back to your question above, 'split' sports code delivery modalities are largely a plus sum game for those codes that are ahead of the curve. There is maybe some 'loss of density' (as you surmised) coming with the split but the macro market reach gain from a well-managed split of delivery and packaging modes more than exceeds that loss risk.

A relevant side point to this discussion: the above factors, all of them, are precisely why a smart PE investor like CVC Capital is marrying up with rugby - it wants to (a) exploit all of the above global trends as rugby is a global game (with China, Japan and the US building appetite for it) and (b) leverage the fact that, mostly, World Rugby and the national RUs have not been smart enough to do it all for themselves and therein, with (a) and (b) combined, lies a big capital value growth play.

 

[Dctarget]

Bizarre that the best Rugby competition in the world has gone to PayTV. Surely the Six Nations are shooting themselves in the foot. Interesting that as we try and do the opposite the leaders in professional rugby go the other way.

 

[RedsHappy]

Bizarre that the best Rugby competition in the world has gone to PayTV. Surely the Six Nations are shooting themselves in the foot. Interesting that as we try and do the opposite the leaders in professional rugby go the other way.

Just btw: the CEO of the 6N has strongly denied such a decision re dedicated PayTV has been made and further comments that submissions for the next set of 6N media rights have not even been made yet, let alone final decisions being taken.

I'm sorry this article is paywalled, but it's all in here dated 1 March 2020:

https://www.telegraph.co.uk/rugby-u...ials-open-minded-broadcasting-paywall-rights/

 

[Dctarget]

Just btw: the CEO of the 6N has strongly denied such a decision re dedicated PayTV has been made and further comments that submissions for the next set of 6N media rights have not even been made yet, let alone final decisions being taken.

I'm sorry this article is paywalled, but it's all in here dated 1 March 2020:

https://www.telegraph.co.uk/rugby-u...ials-open-minded-broadcasting-paywall-rights/

As in he's promised it a place on free tv going forward?

I know it was speculation about the payTV but it seems a logical conclusion.

 

[RedsHappy]

As in he's promised it a place on free tv going forward?

I know it was speculation about the payTV but it seems a logical conclusion.

No, I don't think 'promised' as such but he did note the benefits that accrue to the 6N from it gaining the widest possible exposure, etc.

 

[kiap]

Suspect he would've also copped a large blowback after the idea was floated in the media (whether there was any basis to it or not). Don't think I've come across one Brit rugby fan who likes the prospect of it.

 

[RedsHappy]

Suspect he would've also copped a large blowback after the idea was floated in the media (whether there was any basis to it or not). Don't think I've come across one Brit rugby fan who likes the prospect of it.

Look, of course, it's logical for rugby fans to not like the prospect of it.

However, the RU Nations (like the Clubs at Premier level) are finding themselves under serious cost and code-to-code compete pressures and the need to make bigger investments in developmental and match-day infrastructure etc.

Whether we like it or not, they can see that maximising their media rights income and potentially leveraging up the value of those rights may involve all-in Pay TV and a deal with CVC (which will likely deliver them c.GBP 50m each in the near term if media reports of same are to be believed, and that sort of sum is huge for each of them).

(A btw: remember that SANZAAR got a big and unexpected financial boost to all its members income - very much including RA who's still benefitting from it - when in 2015 Sky TV UK bid an amazing amt for the exclusive transmissions rights to Super and RC Rugby.)