Rupert Murdoch "We've always preferred Aussie Rules"
Posted: Thu May 28, 2020 7:00 pm
Look out, could old Roy be onto something here?
After softening-up period, stand by for big hits in TV rights stoush
By Roy Masters
May 27, 2020
Hard man Peter V'landys has softened up the rugby league "family", using the media to warn of an inevitable decline in the code's income, ahead of the imminent announcement of a reduced, long-term, pay TV deal with News Corporation's Foxtel.
The mechanics of the reported 2020-27 deal are the reverse of the current contract, which then NRL CEO Dave Smith secretly negotiated with Channel Nine's David Gyngell, leaving Foxtel furious it had been sidelined.
Three days later, Smith and then ARLC chairman John Grant were positioned "next to the shithouse" at a welcome to News' Rupert Murdoch in a Sydney restaurant. V'landys, the ARLC incumbent chairman, can be expected to be seated at the head table on the media mogul's next visit to the city.
But will the NRL clubs also be fawning over V'landys in, say, three years' time if Channel Nine or Ten pay minimal fees for the free-to-air rights which include the finals, grand final and State of Origin?
Australia's leading media and sports rights analyst, Colin Smith, warns against TV contracts not being co-terminus, saying pay and FTA deals must have the same beginning and end date to maximise competitive tension and therefore the biggest sum at the end.
Nine Entertainment Co boss Hugh Marks has reportedly told V'landys he will see out the existing 2018-22 deal before deciding to bid again.
Do the maths: according to reports, the News Corp deal is $1.7 billion over eight years without FTA rights compared to the existing $1.8b over five years, with FTA rights.
Sure, V'landys has indicated digital rights will be kept back from the next deal, allowing the code to develop its own streaming service - potentially aimed at Generation Z, who will presumably follow the habits of millennials and watch packaged highlights of NRL matches on mobile phones, rather than invest two hours on a Friday night in front of linear TV.
Following the last deal which eventually resulted in Smith's resignation and Grant negotiating a revised deal with Nine and a still angry Fox, the AFL moved swiftly.
AFL chief executive Gillon McLachlan flew to Sydney and a couple of days later in Melbourne, Rupert announced a $2.6b, six-year deal saying, "We have always preferred Aussie Rules", adding on an estimated $150m in a vengeful, "up-yours" rebuke to the NRL.
There is every indication AFL will follow the same path this time, waiting for the NRL to conclude the pay TV deal and then come over the top, boasting of a superior final figure.
"We've always preferred Aussie rules": Rupert Murdoch announces Foxtel's bumper deal with the AFL in 2015.Credit:Simon O'Dwyer
Sources say McLachlan is currently negotiating with incumbent broadcaster Channel Seven to extend the current FTA deal past 2022, ahead of a pay TV deal.
Some media analysts say this is the wise course because FTA TV is the more financially distressed industry, compared to pay TV.
In other words, AFL will extract as much money as it can from Seven, taking Kerry Stokes's network out of the bidding for the NRL's FTA rights, leaving V'landys to negotiate for 2023 with budget network Ten, as well as Nine.
The AFL will have gone to Foxtel and said, "You require three products to be successful. You have NRL and movies and you need AFL."
Fox reportedly paid two and a half times more than last time for HBO movies to stream on their new over the top service, Binge.
The monies News Corp paid for HBO in a bidding war with Nine's Stan raises the question why NRL must take less, as V'landys has repeatedly insisted.
"We don't want to send our partners broke," he has been quoted as saying, yet News paid a motza for movies for a new OTT service some analysts say will be a repeat of the failed Presto venture between News and Seven.
In fact, legal sources say the current TV contracts do not obligate the NRL to take a cut. When the former NRL CEO, Todd Greenberg, went to Nine boss Marks and pointed out the 2018-22 contract did not even require the NRL to takes less in this Covid-19 interrupted season, it was the end of his rugby league career.
It would be almost heretical to suggest V'landys, following his brilliant strategy in bringing NRL to our TV screens on Thursday night, could one day be shown the door.
But while the rugby league "family" has been softened up for a long-term cut in income, the reality of NRL clubs actually receiving less, compared to AFL, is a very different matter.
https://www.smh.com.au/sport/nrl/after- ... 54wih.html
