Source :- THE AGE NEWS
After all the bluff and bluster, all the talk of new streaming giants threatening to shake things up, and all those doubts about whether Peter V’landys could walk the talk, negotiations over a new NRL rights mega-deal landed where they were likely always going to: the status quo.
That doesn’t mean the mammoth agreement between the NRL and broadcasters Nine and Foxtel is boring. Far from it. The $5.3 billion, seven-year deal unveiled on Tuesday has serious ramifications for the code, its players and fans.
Nine will pay $145 million in cash each year, offset by $10 million in promised advertising spend by the NRL. In return, Nine, owner of this masthead, gets to broadcast up to three games each week, and retains exclusive rights to the crucial State of Origin and grand final.
By contrast, Foxtel will stump up about $520 million per year – roughly double its current deal. Nine’s $145 million contribution is only 25 per cent more than its current outlay.
Given that sharp difference, there was a weird vibe at Tuesday’s deal signing. Foxtel boss Patrick Delany, who is coughing up a fortune and has a huge job ahead in bringing in enough subscriber revenue to justify it, was beaming as he hugged NRL executive chairman Peter V’landys.
Nine chief executive officer Matt Stanton looked less enthusiastic. It didn’t help that V’landys initially mispronounced his surname as “Staunton”. The bruising nature of the negotiations over recent months didn’t exactly make for happy families on Tuesday either.
But behind Stanton’s poker face lies the reality that Nine emerges from this deal in better shape than Foxtel.
Nine has to fork out an extra $210 million in cash over seven years, whereas Foxtel has to find a whopping $1.8 billion extra.
How will they do it? Some of the first questions asked at Tuesday’s media conference were whether the subscription price of the Kayo streaming app would have to rise, and whether the deal contains any caveats to make sure access remains affordable for fans.
V’landys said the deal would ensure “fans can afford to watch the great game of rugby league” but Delany did not rule out a price hike.
Assuming Kayo hiked subscription prices by $10 a month for 1 million league subscribers, that would deliver $120 million extra revenue each year – not enough to meet the $250 million annual difference between Foxtel’s old deal and new one.
Delany pointed to other strategies to grow subscriber numbers, including introduction of three new teams to the competition by 2029, and a push to expand the game internationally.
But the jury is out on whether the new teams – the PNG Chiefs, Perth Bears and a likely second New Zealand outfit – will draw massive new interest. The NRL’s past attempts to globalise the game have also struggled to gain traction.
Delany insists he can make the economics work. “People have been talking about Foxtel’s survival for a long time,” he said. “Foxtel’s thriving.
“We see sports rights increase and increase in value. This is actually the fourth deal I’ve done with the NRL. At every deal people have said, ‘Oh my God, it’s a lot of money. How will you afford it? How will you survive?’. And yet here we are thriving. Sports is the one thing everyone wants to watch. It’s very, very valuable.”
V’landys also said the more Foxtel and its parent company DAZN can grow subscriber numbers overseas, the less pressure there will be on prices in Australia. “We’ve got one, and only one, chance to globalise the game and we’re going to do it,” he said. “Who’s to say in 2050 that there’s not a team in the NRL from Europe? That’s the aim. Why isn’t there one from America? The world’s our oyster. If you sit back and do nothing, you’ll perish.”
Foxtel has a big task ahead of it, but the alternative in losing the rights would have been far worse. It would have been existential for Kayo. With streaming giant Amazon sniffing around the rights, and Nine lobbing a bid to acquire all games and finals to broadcast on its free-to-air channel and streaming platform Stan, Foxtel had to go big to head off the threat. It did so with heaps of cash and the pledge to grow the game internationally, the latter of which the big-thinking V’landys could not resist.
Nine also had a lot to lose going into the negotiations. Delany made a big play during the talks to steal State of Origin and the grand final from Nine, but failed. Losing that exclusivity would have been a disaster for Nine given the huge audience – and advertising revenue – those events bring in. While Stanton would have liked to win the entire rights to help boost Stan, he is more than happy with the status quo.
The new terms deliver the NRL a massive 90 per cent uplift in cash compared to the previous deal, which was arguably artificially low because it was struck during the COVID era when the future of the game was unclear. V’landys will use some of the windfall to eventually lift the salary cap from $12 million to $20 million, paving the way for league’s first $2 million-per-season player.
Perhaps the biggest winner from Tuesday’s deal, though, is V’landys himself.
While outgoing NRL chief executive officer Andrew Abdo was crucial in keeping the fractious negotiations on track and probably won’t get the credit he deserves, V’landys can seize on $5.3 billion worth of momentum in the campaign to install him as the NRL’s all-powerful executive chairman this year.
Cashed up and cock-a-hoop, V’landys will walk into Suncorp Stadium for the State of Origin decider on Wednesday and take his seat alongside the same media executives he has been battling for months.
When he declared last year he wanted the NRL’s new deal to eclipse the AFL’s record-breaking $4.5 billion rights agreement, many of them thought he was mad. Whatever you think of V’landys – and there is a lot to be said – he’s delivered.
Bevan Shields is a senior writer, and former editor of The Sydney Morning Herald.Connect via email.
