Media analyst Brian Han has sounded a note of caution for Nine as the clock ticks down on its blockbuster NRL rights deal, warning the broadcaster must balance sporting prestige with financial discipline.
“There is no arguing that the NRL is a marquee winter live sports franchise for Nine. However, we encourage management to pay heed to the fact that its current depressed market value and agitated shareholder base cannot tolerate an exorbitant jump in rights costs,” Morningstar’s director of equity research Han wrote in an analyst’s note.
By the full-time whistle of the 2027 NRL grand final, Nine’s current broadcast agreement with the NRL will expire, setting the stage for what is expected to be a fiercely contested and potentially expensive rights negotiation. Australian Rugby League Commission chair Peter V’landys has gone as far to say this is going to be the biggest media deal in the history of Australian sport. Beating the most recent AFL agreement that is worth $4.5 billion for seven years.
Han has warned that in a softer ad market, such a large financial investment may not stack up. For Nine, this comes shortly after it recorded a 40.3 per cent share of total TV revenues for FY26, which declined by 9.8 per cent in the comparable period a year ago.
This pressure is likely to intensify under the Albanese Government’s proposed gambling advertising crackdown, which from January 1 will ban betting ads during live sporting events, on team uniforms and in stadiums. Television wagering ads will also be capped at three per hour between 6am and 8.30pm, alongside radio restrictions during peak commute times.
The changes threaten to further erode one of sport broadcasting’s most lucrative advertising categories, adding another layer of complexity to Nine’s NRL rights calculus.
“The risk is that basically the NRL deal could be like an albatross around Nine’s neck for many years to come, especially when you’re facing a future where there is – no matter what they say – an uncertainty about linear TV going forward,” Han added. “You’re talking about a company whose market cap is dwindling and it really doesn’t have the financial resources to pay what Mr V’landys wants.”
Han also noted in his analyst report that Nine’s share price has slid 5 per cent in the 10 weeks following its $850 million purchase of outdoor advertising business QMS, leaving the company with a market capitalisation of roughly $1.6 billion.
This is a massive difference to what Nines market cap was at in December 2021 ($4.96 billion), which was when Nine renegotiated its current NRL deal.
Also, Nine’s shares are currently trading at $1.005, a year-on-year drop of just over 25 per cent.
“Nine’s two free-to-air TV competitors (Seven and Network Ten) are even less able to afford the rights; the anti-siphoning rules are there to be leveraged against the NRL; and the days of (sporting bodies) justifying big increases in rights costs on tenuous concepts such as “promotional platforms” … are over – certainly in this age of on-demand streaming and bite-sized consumption of entertainment,” he said.
Seven currently hold the rights to the other major sporting code in the county—the AFL—which could be seen as a commercial conflict. And even though the broadcaster has its own NRL show on Monday nights called the agenda setters, the only way it would make a play for the league would be to broadcast the old Monday night time slot. But, that is only if V’landys decides to bring it back to accompany the extra game that will be introduced alongside the 18th team, the Perth Bears.
It’s understood that Paramount, the US owner of Network 10, is expected to table an offer for the NRL broadcast rights. With the US backing, cash is not an issue.
Nine has declined to comment on the matter.
