AFL TV Rights Set to be Huge
Posted: Thu Oct 06, 2005 11:03 am
Just goes to further demonstrate the worth of the AFL TV rights to the TV networks. Does anyone doubt the AFL will get more money than the NRL recently did? Bear in mind the NRL has only now caught up to the level of dollars negotiated for the AFL TV rights in 2001.
An expected $700 million windfall for the AFL. Bring on the new teams on the Gold Coast and in Western Sydney.
It seems the NRL is destined to play second fiddle to the AFL in Australia.
An expected $700 million windfall for the AFL. Bring on the new teams on the Gold Coast and in Western Sydney.
It seems the NRL is destined to play second fiddle to the AFL in Australia.
The Australian wrote:AFL sets pace for TV rights
John Lehmann and Simon Canning
October 06, 2005
http://www.theaustralian.news.com.au/co ... 82,00.html
THE Australian Football League is set for a windfall in the wake of the Sydney Swans' dramatic grand final victory as the free-to-air networks begin a bidding war that could drive the broadcast rights to more than $700 million.
Experts predict the negotiations for AFL rights in the next three months could have a big flow-on effect for other sports as the networks scramble to secure rights.
V8 promoter AVESCO has opened negotiations for its next five-year contract with the Seven Network expected to make a bold push to recapture the sport it owned in the 1970s and '80s.
The NRL set the pace in July, signing a contract with the Nine Network and Fox Sports reportedly worth $100 million a year from 2007 to 2012. The AFL aims to have negotiations wrapped up before Christmas, and AVESCO executives have just ended exclusive negotiations with the Ten Network and are now waiting to see what the Seven Network is willing to offer for the fast growing sport.
"We know they have shown an interest," a spokesman for AVESCO told Media. "We are the form sport at the moment."
Although AVESCO has no illusions it will match the figure being courted by the AFL, recent surges in interest in the sport guarantee Seven and Ten will have to bid high to win.
Informed sources suggest AVESCO could command $20 million to $30million for the rights, with audiences for Bathurst topping 2.2 million and regular Sunday races regularly attracting more then 600,000 viewers.
AVESCO chairman Tony Cochrane said: "We are one of the top four sports in the country and there has been tremendous interest in our free-to-air rights."
But for the moment all eyes are on the AFL.
An industry source told Media the AFL was seeking a total of $700 million in the forthcoming round of negotiations to decide free and pay-TV rights and broadband rights for five years beginning in 2007. The last deal, completed in January 2001, reaped $500million for the free-to-air and pay-TV rights, the AFL awarding them to a News Limited-led consortium that included Kerry Packer's Nine Network and CanWest's Network Ten.
The deal ended Australian football's 46-year association with Seven and left Kerry Stokes's fledgling C7 pay sports channels without critical content.
C7 also missed out on the NRL rights in 2000 - this time to Fox Sports, which is jointly owned by News Limited and the Packer family's Publishing & Broadcasting Ltd - and folded within 18 months.
Seven is now in court suing most of the rest of Australia's TV industry, the NRL and the AFL, for $1.1 billion, alleging that C7 was the victim of a conspiracy to "kill" it off.
It is within these messy circumstances that Seven is now fighting hard to win back the AFL rights and give the resurgent network the arsenal to finally knock Nine off its "No.1" perch. A TV executive, who declined to be named, told Media that Seven - which is teaming up with Ten in its bid - is "desperate to win back the rights".
Another executive pointed out that the AFL rights would almost certainly help Seven pull back from Nine at least one per cent of the audience - Seven is tracking about 27 per cent this year, with Nine about 29 per cent.
With each percentage point worth between $25 million and $30 million in advertising a year combined with the extra leverage which comes with being No.1, it's easy to see how critical the AFL rights battle is for the duelling networks.
Seven will get first crack at snapping up the rights, under a first-and-last provision.
TV executives are expecting the AFL to send a written offer to Seven during the next fortnight. It will be well above the $46 million paid for the free-to-air rights in 2000.
The AFL maintains Seven's legal battle being waged against it in the Federal Court will have no bearing on the bidding contest.
But even the judge hearing the case, Justice Ronald Sackville, has raised an eyebrow at how relations between Seven and the AFL can remain cordial.
He said last week there was a "a certain bizarre flavour" about this. "You are suing these people," he told Seven's barrister, John Sheahan, "and here am I - I have documents about your joint bid for rights."
The AFL's barrister, Tom Bathurst, is considering using details of Seven's bid for the 2007 rights to help the AFL's defence at the trial.
If Nine manages to hang on to the AFL rights, it will be walking a scheduling tightrope, with it already committed to screening two NRL games on Friday nights in NSW and Queensland next year.
The NRL competition and finals are one of Nine's most profitable programs, with the network booking an estimated profit of $14 million from its coverage this year.
Nine now pays $13 million a year for the NRL free-to-air TV rights but under its new contract that will climb to $20 million in 2006 and 2007, then jump to $40 million a year for five years.
As Ten is aligning itself with Seven in the new bid, Nine could face the challenge of screening the rest of the free-to-air AFL games itself over the rest of the weekend, unless it can strike up a share arrangement with another broadcaster such as SBS.
Foxtel will also be pushing hard to screen more live games in any new deal with the AFL and receive a better share of quality games.
At the moment, it screens the three least popular games live and the rest on delay and pays $30 million.
Observers have little doubt, though, that the outcome of the AFL bidding war will have a domino effect on other sporting rights. Barry O'Brien, CEO of Total Advertising and Communications, confirmed Stokes' eyes are not just on the AFL rights, but the V8 Supercar series which the Ten Network has turned into a solid performer in the 18-39 demographic.
Cochrane says the timing of final negotiations for the AFL could be critical to the price AVESCO is able to extract. "Once the AFL rights are gone, there will be a lot of interest in us as we are a truly national sport," he says.
"Sport is all important to the free-to-air networks," Australia's most powerful media buyer Harold Mitchell says. "If you look at the top 20 TV shows in any market in the world, they are dominated by sport. Seven [are] trying to get their revenue share up there with their audience share. Nine are trying to protect their share and Ten are trying to fly in under the radar. And sport [rights] are one of the most important elements of it."
