Broadcast options for Australian Rugby

[Adam84]

Two things I'd like to highlight from the article:

1) Her first statement looks to be about as accurate as anything Trump has said all week. This was reported in the SMH

"Put together on the RA side by Clarke and John Knox, the former Credit Suisse Australia chief executive who negotiated Cricket Australia’s record $1.18 billion television contract two years ago, it is worth about $38 million a year over three years with an option for a further two.

Sources with knowledge of the deal say about $30m a year is in cash, with the rest in contra, and despite the impact of the pandemic on sports rights, Clarke said it comfortably surpassed the domestic component of RA’s previous $57m a year broadcast arrangement signed in 2015."

Given the effect of the pandemic with the NRL and AFL taking a substantial haircut, this $$ is a very good outcome. With the rights still to be sold overseas, which provided the majority of the revenue in the last tv rights, RA is not going to end up taking a code destroying haircut. In fact they might end up with a larger broadcast deal.

2) The Western Force certainly aren't getting into NZ's competition in 2021. If they aren't playing Super Rugby AU then their recent player signings makes no sense.

I think someone might be a little bit salty over losing the rights.

Obviously a lot now depends on what the international market will offer for the rights, but it’s quite possible that RA will stroll into 2021 with a larger broadcast agreement then they have now. Which is an amazing scenario to consider given the NRL and AFL have both been forced back to then negotiating table with broadcasters demanding a significant cut in the value of rights on the remaining contract.

Cost wise, Super Rugby 2.0 should also see the operating costs slashed due to a significant reduction in travel burdens and touring requirements. And we also won’t have this ridiculous situation of Super Rugby teams disappearing from existence as they tour South Africa and Argentina for a few weeks right in the middle of the season.

RA absolutely hamoerragaed money in 2020, they’ve gonna to need all the wins they can get.

 

[Adam84]

Channel 9 talking about improving the production of the content, which is good news;

The promise of revamped Super Rugby and Test match broadcasts - which will feature drone technology, up to double the number of cameras, a fresh commentary team and a revamped graphics package - was one of the two key pillars which convinced Rugby Australia to cut ties with Foxtel and sign the three year, $114 million deal.

We were very impressed with the approach Nine's production innovation and what they want to bring to the game," chief executive Rob Clarke said. "I think they feel as though there is a real option to lift the production levels and take it to a new standard.

"I think they're looking at additional cameras and using additional technology to just enhance the way fans can engage through the broadcast platform."

"I think the opportunity to get Super Rugby on free-to-air TV, in particular, was a very, very significant factor," Clarke said. "We believe both for our commercial partners in the game, Super Rugby clubs in particular and their commercial partners, to be able to have the extended reach that free-to-air provides will enable them to drive more income out of their assets."

All Wallabies games will be on free-to-air as per usual in the three-year deal (with a two-year option) but Nine would have to strike a separate deal with World Rugby to show the 2023 Rugby World Cup. So too a deal to broadcast the 2025 British Lions tour.

"Free-to-air has reached a point where we can't continue to increase sports inflation," Marks said of the decision to make the deal Stan-focused.

"The market's not there for it. If you look at what's happening in television generally, audiences are moving to on demand and that's where the revenue growth is.

"On demand is where sports are eventually going to get revenue themselves and this is part of the shift. We as a business are well placed to be able to participate in that."

https://www.smh.com.au/sport/rugby-...ne-plans-to-revamp-rugby-20201109-p56cxg.html

 

[liquor box]

It is worth noting club rugby is now behind the Stan Sports paywall, while Foxtel sources say they would have offered that content for free.

How would they do this? Wouldn't you need a foxtel box, what did I miss, are they now free of charge?

 

[Adam84]

You can register your interest in Stan Sport here for updates on when it goes online
https://www.stan.com.au/watch/genres/sport

How would they do this? Wouldn't you need a foxtel box, what did I miss, are they now free of charge?

Proposal was for a ‘free’ component to Kayo

 

[kiap]

How would they do this? Wouldn't you need a foxtel box, what did I miss, are they now free of charge?

They might have allowed some games to stream for free via Kayo.

The thing is, though, nothing is for "free".

FTA programs with sufficient ratings are paid for through advertising. Without those ratings, they have to be subsidised - either (a) taken off the top of test match revenues or, (b) as the Shute was in the past, by direct cash payments to the broadcaster.

 

[The Honey Badger]

It will be interesting to see what other sports Stan picks up and whether all sports are on one channel (like Kayo) or individual channels (like Amazon US).

I thought it was just streaming, live and on demand

Or do think there will be a dedicated Rugby channel playing all the time.


You would have to image that some of the League content that Nine has rights to will be there also, and Tennis?

 

[Dan54]

So final deal around $30m so we know this is less money then last deal so assume that means smaller squads plus how the heck would this pay for an extra Super Rugby side (Force)..I get excitement on FTA but has come at a cost in terms of less money than last deal and less money then that offered by Foxtel in their late bid

Good points RN, it good for security going forward, but as you rightly point out means maybe a few more cuts, especially with Force now in there. Also wonder if old rights were for NZ and SA domestic rugby, and if there is any cost for that to which may make a little dent.

 

[Derpus]

So final deal around $30m so we know this is less money then last deal so assume that means smaller squads plus how the heck would this pay for an extra Super Rugby side (Force)..I get excitement on FTA but has come at a cost in terms of less money than last deal and less money then that offered by Foxtel in their late bid

It doesn't. I don't think anyone is pretending that RA can suddenly afford five teams again.

Either Twiggy pays or Force go back to GRR - which seems reasonable to me. It doesn't make any sense to me, for Twiggy to pick the force back up, build a new Super Rugby quality squad and then give them the flick because RA can't afford to cut him in on a smalltime TV deal.

Keep in mind the money Twiggy pays for the Force is a pittance for him.

Maybe in 5 years if Rugby is back on its feet he will want a cut and it might be feasible.

 

[Number 7]

So final deal around $30m so we know this is less money then last deal so assume that means smaller squads plus how the heck would this pay for an extra Super Rugby side (Force)..I get excitement on FTA but has come at a cost in terms of less money than last deal and less money then that offered by Foxtel in their late bid

Not quite that simple I think:
1. It is $30m cash plus contra (advertising, cross promotion). It is hard to put a value on the contra but the figure Ive seen is $8m a year in value which would be a minimum agreed spend by Nine based on current advertising rates. This could rise if they choose to promote it.
2. Force are funded privately. So low/no player cost to RA.
3. Travel costs are down (no SA travel; domestic-only comp initially)
4. Rob Clarke has stripped out $30m of costs already from the previous structure.
5. It has been reported Foxtel's cash component was less (obviously Im relying on journalists). Foxtels first bid which Raelene rejected was definitely less. Given Foxtels declining viewer base whatever contra they were putting out should have been heavily discounted and there was a reference to Foxtel's lack of investment in Rugby in todays Herald article being one reason why RA were keen to change.

All major sports have been renegotiated down on existing deals (look at what Seven are doing to cricket right now!) so all in all, this actually looks like a really good deal and if we can keep the player salary costs down, then they might be in a good spot financially going forward.

The hope will be that the FTA will bring in new sponsors for Super Rugby teams given the extra eyeballs they will get from Nine + Stans far greater viewer base.

 

[Wilson]

I can see Fox making a bid for the RWC (along with most media companies) but if they have no other rugby why would they bother with the U20's?

With the RWC I can't imagine Nine/Stan getting all the other rugby and not bothering to go hard for the rights to the RWC

It's unlikely Fox/Kayo will be able to pick up any of the World Rugby sold rights going forward. As of the last world cup they started a policy of favoring the broadcaster in partnership with the local union. As I understand it Optus actually outbid fox for the 2019 world cup rights but World Rugby went with RA's chosen partner. Nine/stan would obviously still have to put in a competitive bid, but they'd be in the box seat, and would have to be prepared for it - otherwise there would be no reason to pick up the rugby rights at all.

The European test matches sold by the individual unions are a different story, but Fox is not exactly flush with money for what would amount a spite play. The best they could really aim to do is drive the price up for Nine/Stan.

 

[kiap]

Either Twiggy pays or Force go back to GRR.

There are enough pieces still around to open a new front.

You want this to start again. I say bring it on.

 

[Derpus]

There are enough pieces still around to open a new front.

You want this to start again. I say bring it on.

What? don't be ridiculous. Of course I'd rather the Force stay. But there obviously isn't money for us to pay for them.

That's why we had to cut a team to begin with - even with a bigger deal.

They only exist because Twiggy wants them to, and that's the only way they will continue to exist. It's not a matter of who wants what. It's literally the only feasible path.

Edit: although, if they do end up on RA dime i sure hope they don't permit more signings of foreign internationals.

 

[Jets]

This is actually a win for the Kiwi's too. If they play in the 2022 compo then their sponsors are being exposed to a bigger market. Obviously this deal is the reason there is talk of a tran-Tan comp in 2022.

Also, part of the declining numbers on Foxtel for rugby was the shit product they were putting out. Very few people want to hear Kearns rant about how good the Tah's are and to bring back rucking.

 

[RugbyReg]

Ok, trying to compare this with previous deals.

In 2015 RA announced a 5 year broadcast deal outcome at $275M (so $55M a year)

That was up from $25M a year the previous period although it did also include all international rights (including the Americas, UK, France, Italy, Middle East, Asia-Pacific and Japan). BSkyB from Britain tipped in a bucketload. Plus the US dollar was stronger in 2015 than the previous period (apparently).

That deal provided all Super Rugby and Wallabies on fox sports and they on-sold the Wallabies rights to Ch 10. Ch 10 also replayed a Super Rugby match a week on Sunday morning. There was also NRC in there which we know Fox Sports subsidized a fair bit.

The new deal, announced yesterday, is $100M over three years with an option for another 2, so lets call it $33M per year. From a bottom line perspective that's down $22M a year on the last deal (but more than the deal before). However the international broadcast numbers are yet to be confirmed. That's where the bulk of the increase came from last time.

From a broadcast offering, we now have Ch 9 broadcasting the Wallabies, plus a prime time Super Rugby match every week plus Super Rugby finals and the occasional club match. Then their new streaming site gets the balance of the Super Rugby and what ever else we can throw at them (more club, Wallaroos, Super W - the last two of which Fox broadcast anyway).

Fears that Stan Sports could do an Optus for the Football World Cup where the system failed and SBS had to step in. Thankfully, if that happens hear Ch 9 are still the boss and GEM/Go become viable next options.

I don't know what we will get from OS for this, given such time of uncertainty, but the fact we actually have rugby next year (with real crowds) must be appealing given the uncertainty around live sport in many places in the north. If we can snag a conservative $10M a year from OS then I think we are ahead of the previous deal. I am sure RA have done some modelling on what benefit such a free to air deal (including a large chunk of promotional value) has on sponsorship potential.

The timing of the 3 year deal with 9 is positive too in that by then we should know how RWC future hosting plans and the Lions tours viability will become more visible too.

Lots to be excited about I reckon

 

[BDA]

Helpful breakdown Reg.

This might actually be the best "good news" week for Australia Rugby in forever. An All Black win and an exciting new TV deal. It's easy to forget that it was only a few months ago that it looked like there was a genuine prospect domestic rugby was dead and buried.

My favourite part of the new deal might be the prospect of new commentators - long overdue.

 

[BDA]

The worst part of this new TV deal is that I have to cancel my foxtel, which means a 2 hour phone call.​

 

[kiap]

Ok, trying to compare this with previous deals.

In 2015 RA announced a 5 year broadcast deal outcome at $275M (so $55M a year)

That was up from $25M a year the previous period although it did also include all international rights (including the Americas, UK, France, Italy, Middle East, Asia-Pacific and Japan). BSkyB from Britain tipped in a bucketload. Plus the US dollar was stronger in 2015 than the previous period (apparently).

You should turn this into a front-pager, Reg.

The BSkyB bucketload was £120m for all of SANZAAR over five years. Obviously exchange rates varied, as you've already noted. But using the beer coaster method and piloting a few different assumpions for the cut, the ARU net would've worked out to roughly 10-14m AUD pa.

A figure at the lower end of that range was reported at the time IIRC, as their uplift due to the UK (the other two European markets were in no way comparable). That was then, though, and this is now …


<edit> I believe the more commonly reported RA 5-year number was AUD $285M or around $57M per year (But again, that would've fluctuated, so you're in the ballbark anyway … I just like picking things apart).

 

[barbarian]

That Halloran article boggles the mind. The notion that by not re-signing with Fox we missed our opportunity to 'reset' is a brain-twisting logical leap. I know she has to sing from the company hymn sheet but man that's just so out of touch with where the rugby public are right now.

This forum is not necessarily a representative sample, but does anyone, anywhere think Fox was doing a good job? Nobody I talk to thinks so. The commentary is generally the lightning rod, but the whole package was stale.

No major paper can really report that given their allegiances one way or another. But I can't remember an announcement being so widely supported by local rugby fans.

 

[Pfitzy]

The Shute Shield Grand Final rated 25k people. The audience is minuscule.

And regularly got bumped for lifestyle shows (tourism and blokesworld type stuff) on the minor channels.

I realise a few people here live and breathe Shute Shield, but the vast majority of rugby fans are - at the outside - casual and very occasional viewers.

 

[Rob42]

That Halloran article boggles the mind. The notion that by not re-signing with Fox we missed our opportunity to 'reset' is a brain-twisting logical leap. I know she has to sing from the company hymn sheet but man that's just so out of touch with where the rugby public are right now.

This forum is not necessarily a representative sample, but does anyone, anywhere think Fox was doing a good job? Nobody I talk to thinks so. The commentary is generally the lightning rod, but the whole package was stale.

No major paper can really report that given their allegiances one way or another. But I can't remember an announcement being so widely supported by local rugby fans.

Yes - I just can't believe the approach that NewsCorp has taken throughout this - it must have really emphasised to RA that News is a dangerous partner to have.