58 mins ago - 2 Likes
Off the Wall
The Independent Commission "met" yesterday for the first time - even though it will be at least nine weeks before it takes control of the administration of the game.
When it finally does take control it may well find that its first task - trying to get a television rights deal at least equal to what the AFL has locked down - will be impossible to deliver on.
A combination of factors is conspiring to make the justifiable case for at least what the AFL achieved more difficult by the day.
The stock market downturn, and growing global uncertainty, could not have come at a worse time for the NRL. If, as many believe, things are only going to get worse in the coming months then the IC will be negotiating with free to air and pay television companies in the worst possible environment.
Secondly, it is increasingly apparent that Seven and Fox paid too much for the AFL's rights - not that the AFL is worried about that.
Consolidated Media Holdings released its financials for the last year yesterday. When doing so, the Chairman, John Alexander, cast doubts on what the NRL will get. He would be expected to do so of course - given the company's interest in Foxtel and the production company for Fox Sports.
The pay television entities currently contribute around $60 million a year for the pay rights for the NRL. Nine tips in around $40 million.
Alexander made the point that unless Nine, or Ten or Seven, has very deep pockets, the NRL won't be getting the $1.4 billion deal that has been speculated on. And reading between the lines he effectively said - "or anywhere near it".
I am no longer confident we will get what the AFL cleverly stitched up. And we may struggle to get above the one billion mark.
The ratings confirm the NRL should get at least what the AFL got. This has been a very good ratings year for the NRL. And will get even better in the finals series.
But market place factors, more than ratings, will drive the next rights deal.
Clearly Fox is not keen to pay much more. It paid a hefty sum for the AFL rights - but that was driven by building subscription numbers in Melbourne, Adelaide and Perth. It will do so with the platform of showing all nine AFL games live each weekend.
Fox probably argues that it already has a better subscription base in Sydney and Brisbane so the room for growth is less than in the southern states.
It might pay more - but not much more.
That puts the ball fairly in the court of Nine, and Ten, and perhaps Seven.
Nine pays far too little for what it gets now. It has three top games each weekend, and the rights to origin and tests...and exclusive rights for the finals. Yet Fox pays substantially more than Nine does!
My reading of the commercial television industry today - and I stand corrected - is that times are tough, just as they are in much of the economy.
The mining boom is not going to do much for television revenue while consumers are not spending.
Sadly, events beyond the control of the NRL are conspiring against it when it comes to the negotiations environment. With one exception.
The NRL could have started negotiations well before now - if the IC had been in place.
The game may well pay a heavy price for a delay that was inexcusable, and frankly driven by selfish and vested interests.
If the deal is well short of what the game deserves, those responsible for the delay should hang their heads in shame!