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SANZAR TV Deal 2011+

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Gagger

Nick Farr-Jones (63)
Staff member
Here's a great post Juan Cote wrote on the front page.

The gap between the ARU and its partners share of the SANZAR broadcast deal is set to widen from US$40m to US$100m, according to reports. The reason for this growing discrepancy is simple – Australian rugby has no third tier.

The much awaited SANZAR broadcast deal post 2010 is set to be announced in the coming weeks and the estimated value of the new broadcast rights ramp-up to around $US400M – a substantial increase on the old mark of $US323M. However, of the $77m increase, the ARU is set to only receive $7m. This will leave the ARU very much out in the cold, and under funded, in relation to its SANZAR partners.

Under the last SANZAR agreement, the ARU received 29% ($US93M) of total revenue with NZ and SA getting 33% ($US107M) and 38 % ($123M) respectively. As part of the protracted negotiations surrounding the awarding of the new Super 15 franchise, all SANZAR Nations agreed to split revenue from the new deal equally as each country would have 5 teams.

The trade off for this concession to the ARU was that the new broadcast deal only included Super 15 games and Tri-nations tests with each Nation being able to negotiate its own deals for rights to their respective in-bound international test and domestic competitions. When these revenues are added to the bottom line, things look decidedly paltry for the ARU.

It has been estimated that with Currie Cup and in-bound tests, SA Rugby has been able to negotiate an extra $US58M, an increase in revenue of 46% on the old agreement. The NZRU, whose NPC is estimated to be worth $US20M, will increase revenue by 13%, even before in-bound test revenue is factored into this figure.

With no third-tier competition to hock, the ARU stands to only increase revenues by 7% or $US7M before in-bound test revenues are considered, not a great prospect given the poor TV ratings of this year’s tests.

What is clear from these estimates is the ARU has very little scope to earn significant revenue outside of what it receives from its share of the SANZAR deal. Although the ARU increased its earnings from sponsorships and gate receipts by almost $A9M from 2007 to 2008, this increase included the sugar hit provided by the first overseas Bledisloe.

Indeed the fact not one Wallaby game sold-out this year does not bode well for those expecting to see these two income streams increase at the same trajectory for 2009.

It is now time for the ARU to re-visit the idea of a domestic third-tier competition as it is the only way the organisation can keep pace financially with its SANZAR partners.

Speaking in June, our esteemed leader John O’Neil said of a third-tier competition, “Once we get the broadcast deal bedded down and once we’ve got a decision on where the new (expansion Super 15) team is going, and once we understand what we can and cannot afford, then we can turn our minds to the third tier.”

Australian rugby can wait no longer.

The idea of a new domestic competition has gone beyond a purely player development argument to now be an income increasing one. With very little else of value to sell, the ARU must quickly come up with a proposal that will attract Australian free-to-air TV stations, who are falling all over themselves to find local content to fill their multi-channel schedules.

Much was made of the money pit that was the ARC. In its first and only year the competition lost over $A5M and was budgeted to lose another $A3.3M in what would have been its second year (2008). An analysis of those two figures suggests the longer the competition may have gone, the greater the economies of scale and opportunities to reduce costs and, as the competition matured, the more attractive it would have been to prospective broadcasters. Sadly, we’ll never know.

With significant cracks appearing in the ARU’s private equity model to fund the new Melbourne Super 15 team, and the very real prospect the ARU will have to pay for the new team itself, this could become a burden on the ARU’s bottom line and eat up the estimated increase in revenue.

G&GR has made several attempts to contact the ARU for comment on the current situation but these calls have not yet been returned.

It’s time for the ARU to come up with something tangible and of value, or, sell off the family silver to pay for its future obligations. Let’s face it, as far as silverware in the ARU’s cupboard goes – there’s fuck all of that anyway.

widening-sanzar-gap1.gif
 
C

chief

Guest
We should get more money because we are providing a team in one of the premier sporting capitals of the world. But what I must say is it shouldn't matter if the loss of the ARC is only a little bit. Surely you can just add it to the State team contracts that it is a condition that you play in the ARC if selected, and receive a small amount it's only 8 weeks and it provides the low key academy and state players to put their case forward. To make the stands fill up just give out free passes for the first week to get some people attending, and make it attractive rugby, at attractive rugby grounds, and we won't even lose as much as last time as Ten HD would probably like to bid for some sort of television rights instead of Paying the ABC to do it. Surely these figures will make the ARU show some sense, and just fucking do it.
 

Gagger

Nick Farr-Jones (63)
Staff member
Whatever the arguments, the fact is that SA and NZ are increasingly pulling more and more money than us into developing and funding their talent pool. The longer this goes on, the bigger the gap gets between Australia and our key competition.

To make any of this work I reckon you’ve gotta go bold and basically throw the whole club system into a big blender, set on blitz, and then repackage what comes out into something that has a chance of integrating with the NPC, conference stylie.

Our best superclubs go over and get mashed until we get better. Along the way we get some more cash and have something for the fans to get excited about.

The whispers are that JO’Ns got some big ideas coming. Something like this?
 

Ash

Michael Lynagh (62)
We should not be involved with the NPC, especially not sending over "our best superclubs" (althought Syd Uni proponents especially won't agree). We should have our own third tier. Why?

- Being involved in the NPC will cheapen/weaken the allure of the S14, especially games against the NZ sides

- Their are many bodies in the NPC more interested in their own agenda, mainly survival. The NZRU has been trying to cut the number of teams at the top tier of the NPC, but keeps getting stymied by teams that are candidates to be cut. All these teams would block Australian entry.

- Sending "superclubs" would be a self fulfilling prophecy. Players would gavitate to these clubs, at the expense of others. Look at the difficultly that the "fringe" premiership clubs have keeping their good players.

The best solution is new clubs in a new comp. They will lack the culture, but it will come. I think an ARC mkII is needed. The ARU had to cut the ARC at the time, but judging by Juan's figures they can no longer afford not to have it.
 

Gagger

Nick Farr-Jones (63)
Staff member
Ash said:
The best solution is new clubs in a new comp. They will lack the culture, but it will come.

That's what I was saying.

The only difference is that you add some international interest by having a playoff system against the NPC finalists. This way you get the cash faster.
 

Pfitzy

Nathan Sharpe (72)
Kiwis will wonder why they need to prop us up.

We need to finally put the nail in the coffin of the Sydney and Brisbane club competitions in their current form. Teams like Sydney Uni put their money into conquering the comp, so they might as well use that money to see if they're really good enough to go up against other clubs who are assisted into a stable financial position. Start merging the Premier clubs and let the Axis of Evil (Uni, Easts, Randwick) go it themselves and see if their money really is where their mouth is
 

waratahjesus

Greg Davis (50)
Ash said:
The best solution is new clubs in a new comp. They will lack the culture, but it will come. I think an ARC mkII is needed. The ARU had to cut the ARC at the time, but judging by Juan's figures they can no longer afford not to have it.

not just picking on you, but the point i made in the blog and what im going to say here, what cash? just cos you come up with a product doesnt mean there is cash. the comp in any sort of arc form is only going to cater to rugby fans that already exist, the sponsorship and fan dollar in this country are saturated to the point of no return, with the super rugby clubs barely making money in any way shape or form, why would a casual fan or a new bussiness want to put money into a comp that will always be the level below super rugby?

the only sustainable way to do it is to have a reserve grade comp run during the super 15 home and away aussie series, even then, its going to leach money like a money f'r.
 

liquor box

Peter Sullivan (51)
As much as I love Rugby, I dont see a national third teir comp being popular.

There will be a group of hardcore fans who will follow it but it will not be a major event on any sporting calendar. That all being said, I really think that we NEED to have another level and it should be run by the ARU as part of its contracts with any player in Australia. If you want to play S14 then you have to play in this comp.

I would have 2 teams in Sydney, Brisbane, Perth, Canberra and Melbourne. Each S14 franchise would supply an U21 side and a development team that comprises of club players who are over 21. These players are paid for by the ARU and the winning states get access to more internationals or tour games to help their bottom lines for outlaying money for training.

I would run it as a long term project where the players are on a minimal wage- say $20,000 per player per season. Not the best wage but for playing a game you love this should be adequate if you want a shot at the big time. It would not be a full time contract, just 6 months or so.

To keep costs down I would alsocut back on accomodation, surely as part of Qantas' sponsorship or any other airlines sponsorship arangements the airline could fly out a team in the moning and return the players that night (maybe perth is an issue) and this will get rid of accomodation costs.

Any registered junior player from any code will get free entry to the double header each week.

The key is to run it as cheaply as possible and look for a decent contrat in 5 years time when the comp has some history.
 
C

chief

Guest
In fact I'm fairly sure that Toyota cup players in the NRL are paid shit all. It's not a substantial amount from what I have heard.
 

liquor box

Peter Sullivan (51)
chief said:
In fact I'm fairly sure that Toyota cup players in the NRL are paid shit all. It's not a substantial amount from what I have heard.

they also have to have a job or be studying
 

Lee Grant

John Eales (66)
Excellent post JC.

My apologies for not following the posts too diligently. This 2nd glass of expensive wine ($20 for a 4 litre cask !!) took the edge off my concentration.

But the first thing I thought of was: if Oz had a 3rd tier comp to flog in the deal - 6 teams including a 2nd one from Sydney - it should earn a bit more money; nowhere near what the SAferrs and kiwis would earn with their Currie Cup and ANZC but a bit more than if they didn't offer anything apart from Super rugby.

Could that extra bit fund an ARC?
 
S

Spook

Guest
NTA said:
We need to finally put the nail in the coffin of the Sydney and Brisbane club competitions in their current form. Teams like Sydney Uni put their money into conquering the comp

cue Fatprop...
 
T

TOCC

Guest
Someone has already hit the nail on the head, its one thing to say we need a third tier, its another thing to find someone who is willing to pay for a third tier.

Its a point which has been made countless times before, that australia is a competitive market for sport, how then does rugby union think it can introduce a third tier competition which is halfway between super14 and club rugby and expect it to be worth anything.

The ratings at best for such a compeititon would be low, the diehard fans wold get involved but your average punter would much rather prefer to watch AFL or NRL which is going to be on at the same time. Heck, il admit that i would much rather watch Greg Inglis run around the park then some plumber from randwick on the bottom of a ruck.
 

barbarian

Phil Kearns (64)
Staff member
I think we need to vastly improve our two existing tiers before we even consider adding a third. Especially S14. Crowd numbers and TV ratings need a shot in the arm, with improved performance on the field the easiest way to do this, but lowering ticket prices and making membership and merchandise more affordable would be a bloody good start. At present, there just isn't the interest to justify an ARC-style comp.

We need to stop thinking like a big rugby nation, and play the cards we have been dealt. We are not going to sell-out stadiums or make front pages regularly, so I think it's probably more viable to build the middle tier into the S14 teams themselves- through various academy and development programs.
 
T

TOCC

Guest
i agree with Barbarian, we have to realise that we will never be able to fund 3 tiers of professional rugby, as much as i dont think its the best option i tend to think promoting some of the club sides into a high tier might be the only economical way of creating such a competition.

Yes i know that only promoting certain clubs will alienate the fans of other clubs, but i guess the ARU/QRU/NSWRU really need to look at what they want to achieve out of a third tier:

1. To create another level of competition which will give the players more experience so they can perform better at the higher levels of Super14 and Test rugby(similar to the sheffield shield).
2. To create a competition of competitive rugby which will attract a TV audience
3. To create additional wealth within the rugby community by selling the product to sponsors/broadcasters
4. To expand the rugby product throughout Australia


Now if you take the idea of promoting the clubs who can generate there own financial backing, you can have 4 from NSW, 2 from QLD and 1 each from the other S14 states(act, vic & wa). The S14 backed sides from ACT, WA and VIC would be able to fund there team as part of the academy system, the 4 teams from NSW and 2 from QLD would be able to draw on sponsors and funding through already established community connections. Utilise the facilities that are already available to the clubs like training grounds and equipment.

The major issue is that going to alienate the fans of the clubs who arent promoted, the concept caters towards the wealthier clubs in both QLD and NSW. The major benefit is that it greatly minimises start up and running costs and introduces sides who already have facilities, sponsors, fans, heritage and a player base.

It will probably also see the best players gravitate towards the promoted clubs leaving the non-promoted clubs aggrieved once again. However, it will provide a higher level of competition for those promoted clubs, it will also create a bridge between club rugby and S14 rugby.

AFL and NRL were both formed off expanding on local competitions, there is no reason rugby cant do the same, there will be short term pain for some fans but the reality is that they will be drawn to the new comp due to the players representing and the higher standard of rugby. The same could be said for the former ARC comp, the major difference between the two concepts is the initial start up costs and short term running costs.



Ways of vetting the clubs could be, that the ARU sets out requirements that the promoted side requires $1million in security, playing and training facilities, $funding arrangements. IF the ARU was concerned that it would lose out in West Sydney they could back a Parra/Penrith side themselves.
 
C

chief

Guest
I think if they do want this competition to work financially, they need to bring overseas players in, let's say be able to have 3 foreign players in the team. Provide entertainment, imagine if the likes of Sebastion Chabal were to play in the Super 14 alongside Ben Cohen (for example) I would come to those games, because I'd love to see these guys playing over here. They would add the personality aspect to the side. Like Rodney did to QLD. Personality helps a rugby team as well, we really can't forget that. Personality will win crowds, as will success on the field as well. It would help a real fan base be improved here.

Not to mention, if rugby games between Tonga and Samoa or other Islander teams were being played over here at Ballymore or SFS for example. Tonga, Samoan and all those other Islander communities would attend these matches, and it would really develop the game over here, and lure a lot of the current Islanders playing Rugby. Those teams playing really good entertaining rugby which International matches aren't currently seeing, would help develop the code over in Australia. Not only that but help develop talent.
 
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