Nine’s new NRL deal – announced yesterday – that sees the Network snare the bulk of rights to the game until 2022 has been labeled a smart move by the Network.
Nine surprised everyone – no more so than rivals Foxtel and Channel Ten – when it sprang $925 million for the rights for four years in a deal starting in 2018.
The preemptive strike and offer was said to be so good the NRL simply had no choice but to sign on the dotted line there and then.
Media analyst, Steven Allen from Fusion Strategy, stopped short of calling it a triumph for Nine boss David Gyngell but told B&T “it’s a very, very good deal indeed. We’re in very low growth or no growth advertising for free-to-air television. Nine now has the rights and the audience can’t get this content anywhere else. I think the important thing here is that Nine has the digital rights too.”
Allen added that in 2012 Nine narrowly avoided going into receivership following a last gasp deal with creditors, so the fact it’s been able to stump-up close to a $1 billion is, in many ways, testament to Gyngell’s stewardship in recent times.
The NRL reportedly want $1.7 billion over the four years and it is now up to Foxtel to put in a bid for the pay TV rights. However, what it’s prepared to pay is anyone’s guess considering Nine now has four live games a week, while the pay TV provider is also set to lose its signature Monday night match.
Allen agreed that there had been a lot of talk about Nine spending $925 million – double its current rights agreement – but he believed the criticisms were misguided.
“Everyone is looking at the headline number and you can’t do that,” he said. “Nine’s doubled the number of live games they can show and live audiences are much larger than delayed audiences and the second thing here is they have the digital rights. That’s another form of consumption that’s clearly on the rise and by the time this deal clicks in 2018 it will be much larger again than it is today. What Nine will charge for that is anyone’s guess. Will you get advertising accompanying it? Who knows”
Allen didn’t believe advertisers would be slugged more for air-time or brands forced to pay more for jersey logos or on-ground sponsorships due to the increase in (live) TV time. Nor did he believe Nine would meddle in scheduling to suit its audiences or want more ad time during matches.
“But for sure, for Nine this is all about its Sydney, Brisbane and Melbourne audiences,” Allen said before agreeing teams that rated well would probably get the prime spots on Thursday and Friday nights. The poorer rating teams would be relegated to Sunday afternoon if they got air-time at all
However, there are commentators who believe Nine have paid way overs to outflank its rivals. Nine also have a deal – estimated at close to $90 million a year – to broadcast the cricket rights. Between the cricket and the NRL Nine’s springing close to $300 million a year; a tough ask in a slow ad market.
Speaking to The Australian this morning, Nine’s CFO, Simon Kelly, said he believed the NRL deal would increase audience share and enable the network to charge more for ad space. “I’m confident that with the doubling of the number of live hours and the prime-time slots that we’re going to be able to grow CPMs for advertising rates,” he said. “We are banking on the sustainability of the code and we think this configuration really excites viewers.”
When it came to the next piece in the NRL rights puzzle – Foxtel’s move – boss of the NRL, Dave Smith, said the deal was a work in progress.
“There’s a long way to go on the other bits and pieces,” Smith told The Australian. “We have started — we’re talking to all the technology and streaming companies. Of course, we would be talking to Patrick (Delany — Fox Sports CEO) and Fox so those conversations continue.”
There has also been speculation that if Foxtel signs on to show every game live then Nine may request its asking price to be reduced. Likewise, Foxtel may be relunctant to stump up the big dollars being asked knowing Nine now has half of all game’s live on free-to-air.
Arguably, the biggest loser in all this in Ten who had hoped that its pending alliance with Foxtel would see some NRL games thrown its way. However, Gyngell’s “very, very good deal” yesterday has all but put the kybosh on that. And with the ACCC looking very closely at Ten’s Foxtel deal and without any top flight sports rights, yesterday’s news of Nine’s mega deal would not have been warmly received over at Ten HQ.
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