The Awful Truth About The ARU's Financial Position

[Inside Shoulder]

As an aside, I wonder if the current NRL boss David Smith was identified as a contender during the ARU's worldwide search for a CEO?

He was ruled out when they found out where he went to school

 

[Badger]

Its a bit of a funding paradox, Australian Rugby needs Foxtel funding to maintain its budget, yet the exclusivity of Foxtel may be the very thing preventing Australian Rugby from increasing its bottom line.

I think Foxtel has reached its saturation/penetration point into Australian households. Anyone who wants it, has probably got it. Its business model relying on exclusivity of programming is getting superseded with the growth of online streaming, eg they acquired exclusive rights to season 4 of Game of Thrones with the expectation that it would drive new subscriptions. I think it will do the opposite and just encourage people to find the show through alternative means. It’s a matter of time before the IRB/SANZAR produce their own broadcast of rugby matches and people will be buy a streaming package like that available for the NBA.

In the meantime, SANZAR/ARU should have a word with Ten in regards to the Super Rugby rights for 2016 and beyond. With the numbers being mentioned as to what Foxtel currently pays, it wouldn’t be out of the question for Ten to make an offer for complete broadcast rights for Super Rugby. That’s a lot of programming for their three digital stations and is a lot better than some of the crap that they currently air. At the very least by having a second bidder, it would (hopefully) make Foxtel pay more for the rights.

Sure be practical but sometimes you have to take a risk - something the corporately obsessed supporters don't like to do.

It's no surprise that the province which is the most dynamic/innovative is the most successful rugby state in Australia at the moment. The Tahs are on the way to achieving this on the field. Now we wait for the back office to do the same. Maybe the proposed merger will achieve this.

If p.tah's information is correct (and I have no reason to doubt it) and Fox have given a highlights package or a match to one of the FTA channels who screen it after midnight, then we're in trouble.

Last year, Super Rugby Extra Time was shown at around 10:30pm on a weeknight (not sure if it was Mon or Tue) on ONE and then repeated on Wednesday afternoon around 3 or 3:30pm. This is better than what Nien did and program it for around midnight.

 

[Quick Hands]

Nine is really only interested in rugby league and cricket, they only buy the rights to other sports to block someone else and usually stuff things up.

I must admit that I never knew that a programme such as this was on FTA.

I think you're right about TEN needing content.

 

[Hugh Jarse]

One Super rugby game per week on FTA is not a very good solution if you are out to build "the brand".

If I was living in Melbourne, then I would want my one FTA game to be the Rebels, and stuff the rest of the other mobs.

As a NSW resident, I would not be bothered to watch the Rebels, Reds or Ponies game. I'd want to see the one FTA game each week being the Tahs game - until the traditional "Wheels falling off the Tah Wagon" moment in early June.

In brief, if the Aust Public are to get one FTA game per week, then that one game should be targeted towards the local viewing market.

 

[Badger]

I must admit that I never knew that a programme such as this was on FTA.

I don't think it was promoted and I came across it by accident when channel surfing one night.

 

[Kenny Powers]

One Super rugby game per week on FTA is not a very good solution if you are out to build "the brand" .

It would be a start at least and Foxtel would consider it. You can't see every NRL team every week on FTA, but they still get good ratings people still watch, have a team they want to win, players they want to follow etc

Also the demographics for advertisers is very good compared to other sports.

 

[Quick Hands]

One Super rugby game per week on FTA is not a very good solution if you are out to build "the brand".

Probably better than nothing though, but a one hour highlights package (which already apparently exists) would suffice.

 

[TOCC]

Network 10 is the only option, and to be fair its a plausible proposition given the success of the BBL. Also Network 10 needs a Winter Sport as they really suffer with the other networks holding rights to the NRL and AFL...


Hypothetically, given the difficulties of the draw and considering any network would want a guaranteed number of games in the same time slot each week i think the following could be a plausible option for Channel 10.... 5:30 and 7:30pm on a Saturday, ties in with New Zealand games and also avoids clashing with NRL on a Friday night...


this is what the channel 10 CEO last year had to say about rugby union

"The Lions tour proved that we can pull big numbers for games. It shows why live sport just does so well. Look at the NRL and AFL - there's a reason why those codes are so valuable. And rugby is just one part of our overall strategy."

 

[Train Without a Station]

TOCC I think we are in a tough position though currently. The way I see it, and that may be wrong, right now they need to focus on an attractive product to draw as much Foxtel viewers as possible to maximise the next deal. If they can do that, and get some decent money in the coffers whilst managing well, which Pulver seems to be leading them towards, they can look at sacrificing top dollar on the next deal with a longer term view. Unfortunately on the brink of insolvency, they cannot do that.

 

[Jets]

Network 10 is the only option, and to be fair its a plausible proposition given the success of the BBL. Also Network 10 needs a Winter Sport as they really suffer with the other networks holding rights to the NRL and AFL.


Hypothetically, given the difficulties of the draw and considering any network would want a guaranteed number of games in the same time slot each week i think the following could be a plausible option for Channel 10.. 5:30 and 7:30pm on a Saturday, ties in with New Zealand games and also avoids clashing with NRL on a Friday night.


this is what the channel 10 CEO last year had to say about rugby union

This is the issue. You can't try and promote a product and build an audience without consistency. The Super Rugby draw can be feast or famine in terms of the draw.

Also to get the big numbers of viewers you need to have identifiable brands. If they are showing South African teams the numbers will drop as opposed to a local derby.

Saturday night can also be an issue for broadcasting sport. It's ok for Wallaby games as they are a big event but there is a reason most other sport is shown on pay TV on a Saturday night. Still it would be better than what we have now.

 

[Train Without a Station]

It's a tough sell. Ten wouldn't be interested in the SA games, but neither would Fox without the Australian games.

 

[Rugby Central]

There is a fairly simple solution in the old saying "A little of something is better than a whole fat lotta nothing". Why not offer 1 game a week to FTA for free or at cost covering price. They have to pay for production (about $50K a game) but then they make the revenue off that.

Yes, rugby won't see the revenue from FTA but what's different from now?

• Fox won't lose much sleep over 1 match a week. Or simply allow Fox to sublet the broadcast. Or organise a commission on the FTA revenue. There are ways to recoup costs.
• Sponsors will see value in investing more.
• The great unwashed (and the washed poor without Fox) will have access to Super Rugby.
• FTA gets a quality sport for cheap

If Rugby want to be real then it has to accept it's a very tiny fish in a very crowded pond. Any leg up is still a leg up.

Or continue with the moral superiority argument that has continually damaged the sport.

 

[Inside Shoulder]

• Fox won't lose much sleep over 1 match a week.

I suspect that depends on which match it is: one featuring the Tahs, Reds or Brums might not be so well received

 

[Train Without a Station]

RC, to do that would likely reduce the ARU's share of TV revenue close to 20%. Can't see them being in a position to pass on what would be a few million dollars. The current financial state seriously has them with almost no room for error right now.

It's not moral superiority either. Fact of the matter is there has been minimal FTA interest in the lifetime of Super Rugby it seems. TV revenue is the biggest income for all codes. Very hard to maximise it and sell it to a buyer who doesn't seem to want it.

 

[RugbyReg]

it'd be an interesting tactic to move to free to air. Firstly, its pretty much Pulver's biggest KPI - the next tv rights deal. He was brought in largely on the back of his media background and knowledge I believe.

However, if there was a way we took Super Rugby to free to air, let's make the assumption that the tv rights are reduced. Could you also make the assumption that sponsorship would increase? Higher visibility? Perhaps not straight away, but soon enough. Incidentally this supports the 'merger model' of Tahs, Reds and Rebels administration, from a commercial sponsorship perspective. Its not without reason that a joint sponsorship could be signed for all three (all three teams perhaps wearing Volvo on their front of jersey etc). If the tournament was on free to air, then having teams from the three largest tv markets certainly would be appealing to the right company.

Now take this a step further and I BELIEVE the RUPA agreement with the ARU is a percentage of player driven revenue? I believe tv rights is included in this, but sponsorship is not?

So a move to perhaps a lesser tv rights deal on free to air, and perhaps increased sponsorship will mean the ARU are in a better position financially, and the players perhaps not so much.

 

[Train Without a Station]

That's a pretty valid point Reg, but can the ARU afford to be out of pocket for the lag between the TV deal and any potential additional revenue from increased exposure actually coming to fruition? If it took 2 years, of perhaps taking $10M less a year can they last?

Or could we actually expect an FTA (Partial or full) deal to net close to what the previous deal was anyway, and therefore keep them afloat whilst they aim to increase exposure?

 

[boyo]

Would having one game per week on FTA provide a consequent rise in Foxtel takeup once some people get a taste?

 

[Rugby Central]

I suspect that depends on which match it is: one featuring the Tahs, Reds or Brums might not be so well received

Fair call, How about selling the broadcast of an Australian side in South Africa. The timezone means it wouldn't be live, they would get extra revenue without any outlay and it might whet the appetite for potential subscribers (as noted by Boyo)

FTA get a new product with minimal production cost increasing their revenue

I agree I'm looking through Polyanna's rose coloured glasses but surely it can't hurt to ask the question. Anything's got to be better than watching 3 hours of reruns of MasterChef or My Kitchen Rules on a Sunday afternoon for people who want something other than league.

 

[Inside Shoulder]

Fair call, How about selling the broadcast of an Australian side in South Africa. The timezone means it wouldn't be live, they would get extra revenue without any outlay and it might whet the appetite for potential subscribers (as noted by Boyo)

FTA get a new product with minimal production cost increasing their revenue

I agree I'm looking through Polyanna's rose coloured glasses but surely it can't hurt to ask the question. Anything's got to be better than watching 3 hours of reruns of MasterChef or My Kitchen Rules on a Sunday afternoon for people who want something other than league.

no argument from me - but the league is not even live on FTA on Sundays

 

[RugbyFuture]

NRC I think has been specificially developed around the big bash and A-league model to go to free to air eventually.