NRL TV deal worth $1.9 billion if Nine sell-out to Fox Sports
Date November 12, 2015 - 4:01PM
Roy Masters
Sports Columnist
Should Channel Nine surrender the right to broadcast Saturday night matches, in exchange for a payment of $40m per year from Fox Sports, a $1.9 billion NRL TV deal from 2018 to 2022 is likely.
Fox Sports Super Saturday coverage is critical to the News Corporation owned network, allowing it to sell the same number of games to subscribers as it does under the existing deal, which still has two years to run.
The $925 million five-year deal Nine negotiated with the NRL in August meant four games per week would be seen on free-to-air TV, a potential tipping point for subscribers to consider a sporting life without Foxtel.
Furthermore, the Nine deal left unsold the other four games in the NRL eight games per week schedule.
The price the NRL will expect for the key 7.30pm Saturday time slot, should it be sold to Fox Sports and therefore no longer be available to every household in Australia, is critical to the final overarching deal.
Nine, keen to reduce costs, will demand $40 million per year, reducing by $200 million, the $925 million deal negotiated with outgoing NRL chief executive Dave Smith.
Fox Sports has offered $130 million a year for the other four games.
The NRL has indicated this is too low and presumably rejects the notion it is selling "bottom four" games.
It now controls all scheduling and won't necessarily devalue pay TV games by always programming the best ones for free-to-air slots.
Nine's costs could be further reduced by $100 million over five years if Fox Sports agree to simulcast Nine's Thursday night, Friday night and Sunday afternoon games.
This would mean Nine paying a total of $625 million, a still significant 39 per cent increase on the $450 million it paid for the same number of games in the current contract.
However, as leading sports media rights advisor Colin Smith points out, the NRL has surrendered competitive tension to Nine, allowing it to sell a game to a rival broadcaster and therefore becoming the effective holder of first and last rights.
This is an ironic twist considering rugby league's last TV deal was a desperate battle by ARL commissioners to successfully extricate themselves from News Corporation's first and last rights, which extended to 2027, a win that contributed to News Ltd boss Kim Williams losing his job.
NRL club warlords, such as the Roosters' Nick Politis and the Bulldogs' Ray Dibb, will be watching with Machievellian manouevering recent revelations in Rupert Murdoch's newspapers of a possible $1.8 billion deal from 2018-22.
Assuming Nine pays $625 million; Fox Sports outlays $200 million for the critical Saturday night match, $100 million for simulcast and $650 million for the remaining four games, the Australian TV total is $1.575 billion.
Telstra paid $100 million for digital rights last time and Optus' recent purchase of the EPL rights, will probably force the Australian owned telco to double its offering to $200 million.
Sky New Zealand can be expected to pay between $80 million and $100 million over the five years.
Nine, Fox Sports, Telstra and New Zealand payments add up to $1.875 billion, just over the projected $1.8 billion.
While the club warlords may declare this "get out of jail" money, it won't stop their politicking for a greater role on the make up of the ARL Commission.
The only meaningful comparison they will make is to compare the final NRL TV deal to the $2.55 billion over six years contract awarded the AFL by News Corporation, Channel Seven and Telstra.
This is equivalent to a five year term of $2.13 billion, or a 70 per cent increase on their current $1.250 billion deal which still has one year left.
It is not realistic for the NRL rebels to demand the same money as AFL, considering it has an additional game to sell (nine compared to eight) and its two-hour format over four quarters allows for more commercial breaks.
However, Politis and his cohorts will expect a 70 per cent increase on the NRL's current $1.125 billion, considering the last increase was 80 per cent and the code dominated top five Australian ratings in 2015.
That's a figure of $1.9 billion and there is no need for a rush to achieve it, considering there are two years left to negotiate in a world of rapidly changing technology, while the AFL has locked itself out of it for seven years.
Should Nine sell Saturday night to Fox Sports, it will end the dream of Nine's chief executive, David Gyngell, whose ultimate ambition is a four-quarter game of rugby league on primetime nights, going up against AFL.
Unless, of course, Gyngell returns as an ARL commissioner.
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