NRL 2020: NRL receives pitch to save tens of millions annually with in-house broadcasts
The NRL has been approached about forming a venture to produce its broadcast content in-house in a move that could slash tens of millions of dollars in annual costs.
The Sun-Herald can reveal a third party with extensive global sports production experience has pitched a proposal to powerbrokers at Rugby League Central that could revolutionise the way rugby league telecasts are produced. The parties met to discuss the idea for the next broadcast deal, which could allow for an increased number of rights holders when the existing contract expires at the end of the 2022 season.
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Peter V'landys responds to Nine's NRL broadcaster statement
Peter V'landys responds to Nine's NRL broadcaster statement and the future of CEO Todd Greenberg
However, those discussions could be fast-tracked given the uncertainty around whether the current broadcast partners, Foxtel and Nine – publishers of The Sun-Herald – have the desire or means to fulfil their obligations.
The third party, which wishes to remain anonymous, is proposing to bring its infrastructure and expertise to the NRL to transform it into an organisation capable of broadcasting matches and associated content itself. It is estimated that production costs could be reduced by as much as 50 per cent for every game. The potential to reduce costs is timely given Rugby League Central spends almost $500,000 a day to run the competitionjust as the coronavirus outbreak has resulted in a massive downturn in revenue.
Those behind the pitch believe the quality of the product will be every bit as good as current telecasts. The initiative would also give the NRL creative and editorial control and could open the door for other sports to use the services. It also opens up the prospect of rugby league being on-sold to a mix of traditional broadcasters, including free-to-air and pay TV, as well as Netflix, Google, Optus and Amazon. Those platforms could also potentially be involved in simulcast arrangements with traditional partners.
The NRL has already committed $150 million towards its digital strategy, including a huge investment into nrl.com. That gives the game the option of providing more of its own exclusive content directly to subscribers or on-selling games to a variety of providers.
https://static.ffx.io/images/$zoom_0.414%2C$multiply_0.7082%2C$ratio_1.776846%2C$width_1059%2C$x_404%2C$y_0/t_crop_custom/q_62%2Cf_auto/531efc89ffa3eb1e61960b2faed1a36bb29f8e16 2x" alt="The NRL has been approached about a new way of producing broadcast material." data-reader-unique-id="88" />The NRL has been approached about a new way of producing broadcast material.Getty
The Herald revealed in October that bringing production in-house was an option for the NRL. The model has been used overseas and locally, most notably by Supercars and tennis. A host of propositions – from ending simulcast arrangements, selling off State of Origin separately, and playing matches in quarters to increase advertising slots – have been workshopped with a view towards the next deal.
However, all of those options could immediately come into play should Nine and Fox seek a return to the table to renegotiate the current arrangement.
Another option for future broadcast cycles is the prospect of one partner filming all of the games and then on-selling some of the content to other parties.
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https://static.ffx.io/images/$zoom_0.46264744429882043%2C$multiply_0.5685%2C$ratio_1.776846%2C$width_1059%2C$x_0%2C$y_0/t_crop_custom/q_62%2Cf_auto/d8be846d95280e9162308943840549e93bfc0e5a 2x" alt="V'Landys seeks peace with Nine after broadcaster launches stunning attack on game's administration" data-reader-unique-id="113" />Rugby league has long gone with a two-partner model of a free-to-air and subscription provider. However, there are growing concerns about whether Foxtel can afford to meet its commitments, while Nine may be looking to renegotiate its deal after accusing the governing body of years of mismanagement and wastefulness.
Nine chief executive Hugh Marks was livid about being left out of the planning to resume the current season, which was halted due to the coronavirus crisis. NRL boss Todd Greenberg isn’t expected to play a meaningful role in peace talks following Nine’s stinging statement, which said millions of dollars had been squandered over the years by "a bloated head office completely ignoring the needs of the clubs, players and supporters."
This week’s talks between the broadcasters and the NRL will determine the length of the current season. RLPA chief executive Clint Newton said more games didn’t necessarily mean more revenue.
"Not necessarily, it depends on the timing of matches," Newton said. "It’s about maximising the amount of revenue. Sometimes more doesn’t mean more revenue because it comes down to the operational costs and the expenses that will be incurred."
Replies
Just read this article in the Sydney Morning Herald. Apologies for some ads etc getting in to the cut and paste.
As I said the other day, after Nine publicly shamed their partner, we should expect to see leaked stories about the NRL exploring other broadcast options. Despite Phil Gould slinging vague accusations without evidence about NRL finances - it the evidence was actually there why not be specific? - the simple fact is that Nine spat the dummy and tried to bully the NRL. Nine may have a case. But the dummy spit of airing greviances in public was a bully move to drive down the value of the game, and Nine's actions are exactly why media scholars complained when Trumbull relaxes cross-media ownership laws and allowed Nine and Fairfax to merge. The concern was that allowing a TV and Print entity to merge would reduce editorial discretion and create the conditional for monopoly power. Or put differently, the new entity - NEC - would be capable of prosecuting its own version of reality across TV and print, without a "check" on their version. And that's what Nine did in their TV and Print broadside.
if you ask me, Nine thoroughly deserves this leaked story. And Nine will thoroughly deserve getting bumped from its broadcast position. I make no claim about whether Nine was right about the finances. Nor do I suggest the NRL is without blame. My point is we should not have let another Murdoch empire be created in the form of NEC (Nine + Fairfax), as then you have little ability for contrary voices to the big monopolies to be heard. And the monopolies can dictate terms.
Gus, as he said in his Fairfax article, has been extremely vocal about this problem for years. I know, I think I've read everything he has published on the subject. He has been particularly vocal about the avarice in spending $100m on NRL Digital without any significant tangible return to show for it.
Nine & Fairfax aren't the problem, and yes, no question Hugh Marks has a vested interest, but that doesn't mean he's wrong. In fact, Peter V'Landys has actually apologised to Nine & Foxtel about not consulting with them regarding restarting the competition, and he has also agreed that the League's cost structure is massively out of kilter and needs a massive fix.
As Gus has pointed out, the NRL has gone cap in hand to its broadcasters on numerous occasions for advances because it can't balance its chequebook. Imagine having to be the CFO who has to make that particular call ?
Daz, may the seed of my loin, be buried deep in the belly of thy woman....
Snake, I am not sure I am seeing the relevance. But ya know, you got your own fantasies mate, so what you’re thinking about at home in your parents basement with the lights dimmed down and your trackies nowhere to be found is really your own business.
Whilst this idea has merit, it is years and years too late. This is not something the NRL should even be contemplating at this time. The start up costs, as they have found with NRL Digital would be prohibitive at this time.
That said, I have long thought the NRL should be breaking down the broadcast rights into smaller packages so as to bring more competition into play for the rights. This is something that the EPL, NFL, NBA & MLB have been doing for years.
Basically you would break the rights down into the following packages as an example ...
Thursday Night Football ... 24 games
Friday Night Football ... 24 games
Super Saturday ... 67 games (5 games less to be sold separately as Blockbuster Footy package as below)
Sunday Footy (NSW) ... 24 games
Sunday Footy (National) ... 24 games
Sunday Night Footy ... 24 games
Origin ... 3 games
International footy ... minimum 5 games
Finals footy ... 9 games
Blockbuster footy (Good Friday, ANZAC Day, Easter Monday) ... 5 games
Preseason package
Each package would then be auctioned off separately with certain provisions in each, for eg: Every team must have at least one Friday Night Footbal home game every season.
The more you atomise the rights, the more you can unlock their collective value, whilst not being reliant on one or two broadcasters entirely.
Brett that does look very interesting; something i would ask is the geography and population of our country compared to EPL / NFL etc. I guess if o/seas broadcasters got on board this would expand more.
Well the reality is that Nine are only interested in Thursday & Friday nights, Sunday arvos and the big games, ie: Origin & Finals, but so would Seven, and the inherant competition from those two would drive the value of those particular packages.
But, Ten would now come into the equation because they could for example bid on some of the cheaper packages, like say a Saturday Night package ( I know I haven't included a Sat Night package, but you get the idea ). Even with the backing of CBS, they simply aren't in the game for the high profile packages like Friday Night Football, but if they could get their hands on one or two of the cheaper packages, I have no doubt they would jump at the chance.
And again, the spectre of streaming services like Netflix etc is just lurking around the corner. Right now those services aren't interested in live sport, but it's only a matter of time.
The problem with bundling the rights is that you eliminate a lot of the potential competition, and you never really know how much the rights are worth collectively. Splitting them up does that for you.
I totally agree with that part abot Netflix etc. I would assume that the NRL and their smarts would be looking at such items ( Netlfix / O/seas) but would the NRL hold out for long? I do not know but i also assume in the current arrangements they need to give Fox / 9 first dibs.
I think we may see a few sporting arrangements go diverse in the future.
The important thing is when you bring other broadcasters into the game, it increases competition. Up till now there hasn't really been any serious competition for the rights, Nine have basically had a sweetheart ride for the last 30 years, but giving Seven & Ten, plus Foxtel and now live streaming services access it just opens it up.
Brett, the main obstacle to your proposed idea - which I understand you offer as a thought bubble so I do not mean to be critical - is the anti-siphon laws. With content spread over multiple packages and possibly multiple broadcasters or multiple broadcast formats, the existing anti-siphon laws would probably result in some FTA network gobbling up simulcasts. Yes?
Another point would be whether the fragmentation of viewer-markets would devalue the per viewer advertising dollar, or increase it? Prima facie it seems a fragmented viewership would see advertisers conclude their product has less reach, and thus they pay less per second of ad. But of course one could imagine certain brands thinking they have a hold on a sector of the market and know it's demographic, so the brand construction increases the hit value of a targeted ad. I can imagine both being true. But if both are true, would that help a game with an interest in broadening it's appeal, if the only advertisers willing to pay top dollar are the ones advertising products for a narrow segment of the market modeled as unmoving?
Another point is more philosophical, in a sense. Does market fragmentation, while increasing competition, translate into better access for consumers of the actual game not just the sponsored products? I wonder if the easy line about fragmenting broadcasters and thus audiences is a very Sydney-centric position? Down here in Melbourne if I did not have Foxtel I would get about 1 game per week on Nine and the other two on FTA good luck, go hunting online etc. At SOO time the feed in VIC switches straight to an AFL talk back show 2 seconds after the game ends. Seriously. So now just multiply those problems because FTA broadcasters are quite regional in their ads. I think if you fragment the audience and increase competition, the benefits will flow disproportionately away from fans wanting to watch a lot of footy. It will become like all the little pop-up streaming services where your friend asks "have you seen X show on Netflix/Stan/Amazon Prime/etc" and you're like fuck that I can't be bothered with 86 subscriptions. Which quickly means income will start dictating footy access even more than it does now (I have Foxtel so see all games but if you are stuck with FTA or basic Foxtel etc), and regional disparities will emerge. I reckon it would be a shit show. But I say this point is philosophical because the old market ideology is that you increase competition you drive up quality. Critics say the competition does increase quality in some areas of benefit to the supplier or producer but usually at the expense of decreased quality in places important to consumers or liable to rely on inequality production amongst consumers. Choose your poison I guess but I reckon fans would get screwed
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