Footy codes talk to Netflix, Fetch TV and others as rights bonanza beckons
by John Stensholt and Jared Lynch
The big football codes have held discussions with giant multi-national digital companies such as Netflix, Fetch TV and Google over joining the race for broadcast rights as a bold new era of sports broadcasting beckons.
Both the AFL and NRL are understood to have met with the online steaming services and digital companies in recent weeks, adding them to the list of likely bidders for broadcast rights later in the year alongside free-to-air and pay-television networks and the big telcos.
The AFL and NRL are both in the market for huge new broadcast deals, with each set to reap somewhere between $1.5 billion to $2 billion for five-year contracts thanks to unprecedented levels of interest in live sport, highlights on demand and digital content.
Talks are expected to formally heat up in the second half of the season, after several media and football executives take midwinter holidays, with both the AFL and NRL hopeful of resolving new deals by Christmas.
The entrance of the streaming services companies will add a completely new parameter to the negotiations, which have previously mostly been the exclusive domain of the free-to-air and pay-TV networks and telecommunications giants Telstra and Optus.
It is likely, however, the new digital companies would not win rights to stream live matches but potentially join with existing broadcasters and offer replays to consumers directly on-demand and highlights packages. They could follow in the footsteps of Apple, which struck a deal earlier this year with Cricket Australia to create a dedicated cricket channel on the Apple TV network to show highlights, news packages, historic matches and player interviews.
'Cold hard economics'
"There's no doubt [the football codes] are talking to everyone but ultimately what path they go down will come down to cold hard economics," said one digital media company executive.
AFL commissioner Kim Williams, a former Foxtel CEO, told a Collingwood corporate lunch earlier this month he did not expect the new entrants to play a significant part in the next rights deal, but they definitely would in the one after. "Television as we know it will change completely in the next decade," he said.
It was revealed last week that the NRL has spoken to Google, while Singtel-Optus chief executive Allen Lew revealed his company would fight rival Telstra to be part of the next rights deal for either code.
Both the AFL and NRL have established working committees to gather information and lay the groundwork for what will be intense negotiations. AFL CEO Gillon McLachlan will play a major role, alongside AFL commissioners Kim Williams, formerly the CEO of Foxtel, and SEEK co-founder Paul Bassat and AFL executive Simon Lethlean. Macquarie Capital boss Robin Bishop is also understood to be assisting the AFL.
NRL CEO Dave Smith will be assisted by Australian Rugby League Commission member Graeme Samuel, once an AFL commissioner, and NRL strategy head Andrew Fraser, the former Queensland state treasurer. Credit Suisse boss John Knox is also part of the NRL broadcast rights team.
Both codes have also held several meetings with the free-to-air broadcasters and Foxtel and Fox Sports management in recent weeks. The networks have told both codes they are extremely keen to bid for all or at least some of the rights.
Deals up for renewal
The AFL's current $1.25 billion five-year deal with Seven West Media, Foxtel and Telstra expires at the end of the 2016 season, while the NRL's $1.20 billion five-year contract with Nine Entertainment Co, Fox Sports, Telstra and Sky Sport in New Zealand ends in 2017.
Nine will fiercely defend its NRL rights and also compete for at least a slice of the AFL. But it could also pitch a huge bid for both in an attempt to wrestle the top ratings position from rival Seven.
The NRL is keen for networks to bid separately for the State of Origin series, which averaged 3.9 million viewers nationally for game 2 last week, and for a dedicated NRL channel on Foxtel as the AFL has with Fox Footy.
Ten's tie-up with its new shareholder Foxtel could see it join the bidding for at least one AFL match per round and the State of Origin, while Seven will defend its AFL rights and lob a bid for at least some NRL games and State of Origin. Telstra and Optus will compete for digital rights.
The NRL is also understood to be considering as many as 12 Thursday night games in a new deal, while a possible source of additional revenue could be placing a new team in Brisbane to rival the incumbent Brisbane Broncos. It is estimated a new team could add $100 million to $200 million to a rights deal.
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