Hard yards needed for sports to cash in

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By Midfielder, 1 Mar 2010 The Crowd is a Roar Pro

Tagged:: A-League, AFL, Channel Nine, football, free to air coverage, free to air tv, NRL, Rugby League, Rugby Union, Seven Network, Super Rugby

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The Commonwealth Government returned to the free to air channels effectively $1.5 billion per year, spread across all the major networks including the country networks like WIN and Prime, by reducing their TV licence fees. The fee reduction is to help fund the extra digital stations currently being rolled out by most networks.

Leaving aside arguments about why the Commonwealth did this, it does provide the ‘free to air’ (FTA) networks with a lot of extra loot. Some say it will help the FTA’s with funding sport products. Fox executives are not amused (that is an understatement).

My understanding is the FTA stations are all in a position to pay a good price for sporting product, which was not the case twelve months ago. Maybe the reductions in fees is helping.

Into the mix come ethical considerations by the FTA stations. Say Seven buy the AFL and Nine buy the rugby league, how much of their other programming goes to cross promotional broadcasting? Do shows like Sunrise interview mainly AFL players, do Nine do the same for rugby league?

As the battle for the major codes expands how does this affect smaller players?

The major codes as I see them are AFL, cricket, rugby league, rugby union and football. Tennis will always have a market for the majors. Beyond these how where do you get promoted?

I did a little bit of analysis to determine what each code had in terms of competition. I should say now I am assuming in the future that football’s under 23 Olympic and under 20 World Cups will each develop a following far in excess than what they currently do and I assume football will be free to air as well to some extent.

My chart assumes the competitions about 7 to 9 years out from now.

Sport	Domestic Competition	Inter State Competition	Domestic International Competition	International Competition
AFL	20 Team all states. 20 rounds plus finals	Assume Southern States.	Nil	Nil
Rugby League	18 team competition 24 rounds plus finals	NSW V QLD	One game per year	Various tests, assume 5 meaningful games per year
Rugby Union	Nil	Nil	Super 15	School Boy Wallaby Junior Wallaby Senior Olympic 7’s male Olympic 7’s female
Football	14 Team A-League 8 Team B-League Plus in Time a FA cup style competition.	At Junior levels only	Asian Champions League Min 24 games	Socceroos Matildas U 23 Olympic Male U 23 Olympic Female U 20 WC male U 17 WC male
Cricket	Nil	Nil really who watches shield cricket	20 20 ODM (50 o)	Test 20 20 ODI (50 o)

If you look at the sports, cricket and rugby union receive most of their funding for international matches. Football mainly from internationals but with a developing domestic competition. Rugby league for domestic, interstate and limited international, AFL for domestic and, sooner or latter, an inter-state competition.

The hard yards lie ahead for all codes to get their media deals in place.

Cricket, AFL and rugby league have traditional heartlands and large traditional viewing audiences. Rugby union less so but it does have an extra Super team and the 7’s rugby at the Olympics.

I will let other codes speak for themselves. Football is coming from a long way back in the field and in my opinion will grow in the first instance by the expansion of the international teams, being the Olympic teams and under 20 World Cup.

The A-League will continue to grow steadily but not steeply. The hard yards for football will be surviving until the next round of media deals.

But as we speak there is a lot of cash now available for sport because of the reduction in the FTA annual licences … it will be interesting to see how the various codes turn this to their advantage.

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The Crowd Says (49) | Page 1 of Comments

Midfielder said | March 1st 2010 @ 8:18am | Report comment

Two things I left out first from my chart … my bad .. was first was the W-League .. sorry to any ladies.

Second whether the various codes stay with one station or …un-bundle… their products.. In this respect Football is in quite a strong position because of the number of products it has on offer.

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JiMMM said | March 1st 2010 @ 8:41am | Report comment

Midfielder

I think you have got a number of basic assumptions wrong in this, I don’t think any national code will be able to expand past 18 teams so for the AFL to move into new markets (remebering it took the Lions and Swans about a decade to get themselves established in thier new spots) will mean giving discounts to 4 teams, not going to happen.

I’m also unsure of how the league teams ended up with 24 rounds and 18 teams. They will either have 34 rounds (play each team twice, very unlikely) or continue the current format of 1 and a half rounds giving them 26 rounds, and lets not even start looking at the conference hypotheticals.

Rugby Union, I would expect a domestic “club” comp however small and I would remove the juniors, and you might be close.

Football has no hope of a B-League in that time frame, I would expect a 16 team A-League and an FA cup style tournament including the state leagues. I would once again cut out all underage tournaments, including the olympics as I believe FFA don’t get anything from them.

And for the cricket I would put the 20/20 format in the Domestic column as I can see the Big Bash getting bigger and bigger as the years go, meaning we can pretty much remove the 50 over game from teh domestic landscape (it will still play an important part in the international arena).

What I would expect to happen if the FTA networks started buying up all of the major codes I would expect Fox to start spending up big on some of teh minor codes like Basketball, Baseball, Hockey, swimming and Athletics as well as others, and I would then expect to see them lift thier game (performance). I don’t think it is likely to happen as I do expect 9 and 7 to put a lot of money into lifestyle, Drama and sitcom’s over the next few years given that Go has apparently claimed a 3.5% market share (bigger than SBS normal).

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Redb said | March 1st 2010 @ 8:50am | Report comment

“But as we speak there is a lot of cash now available for sport because of the reduction in the FTA annual licences … it will be interesting to see how the various codes turn this to their advantage.”

This augurs very well for the AFL given the TV deal is currently under negotiation for 2012 onwards and the Fed Govt leeway on FTA licences is only for a couple of years, not ongoing I beleive.

On the AFL State front – I beleive we will see return of a tri-state State of Origin series.

On the international front re AFL – you have left off International Rules. This is going ahead again in 2010 with games to be played in Ireland, followed by in OZ in 2011. Finals of the International Cup in 5 – 8 years on Pay TV?

As other sports package up their TV rights, I reckon the AFL behind closed doors is preparing it’s 10 year battle plan post the next rights expiry in 2016.

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- Ken said | March 1st 2010 @ 10:34am | Report comment
  
  Unfortunately I think we’re all being optimistic thinking that since the FTA channels got a fee cut they are going to pay heaps more for sport. These are big businesses run for the bottom line alone, they all have a bit more money but there’s no new competition for the content. To have them cashed up at negotiating time is better than having them broke but they aren’t going to pay more than they can get back in profit.
  
  I think you were correct in leaving out Shield & 50 over domestic cricket from your chart since the attraction is miniscule (although as noted by JIMMM 20/20 is becoming huge domestically is already a substantial player) but for the context of your article I think you could remove the ‘filler’ from the other sports too:
  
  - RL’s world club challenge (which was live on at FTA…. at 5am this Monday morning with I imagine a very poor audience) could easily be ditched for this argument.
  - I expect AFL’s international rules inhabits a similar sporting sphere (not included but suggested by Redb).
  - Any prospective B League, W League or Junior soccer events, rightly or wrongly, are not going to be in demand. Olympic events will be in the olympic coverage and not relevant here.
  - Same goes for the Rugby schoolboy and womens events. Olympic events as above.
  
  Trim all this stuff away and you are left with the stuff that’s worth paying for. AFL & NRL deals will shape the landscape, how much of the money and air time they suck up will determine what is left for the rest. In the near future I can’t see RU getting back on FTA, considering they are competing against the big 2 and their Pay ratings aren’t compelling. Soccer and T20 have opportunities to expand into FTA in their summer slots – T20 especially could be huge. Is there still a non-ratings season though? If so, will the networks ever pay serious money for a summer competition?
  
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- elbusto said | March 1st 2010 @ 9:26pm | Report comment
  
  International Rules LOL – tahnks RedB I needed a good laugh. I had forgotten howfunny that one was!
  
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  - Zac Zavos said | March 2nd 2010 @ 9:19am | Report comment
    
    Elbusto – this comment isn’t appropriate on The Roar.
    
    A reminder to all to vote DOWN poor comments so they are hidden for others, or report them and we will place offenders on our moderation queue.
    
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    - Elbusto said | March 2nd 2010 @ 10:26am | Report comment
      
      If it wasn’t appropriate tel me why mate. International Rules is not a game played anywhere at any time except for three hours every two years – in my view that is a joke – if I am wrong tell me why?
      
      Reply
Justin said | March 1st 2010 @ 9:10am | Report comment

What is this figure of $1.5 billion? I thought the rebate was $250 million…

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Midfielder said | March 1st 2010 @ 10:08am | Report comment

Justin

250 million per station… by the 3 commercial stations is 750 million… then all other TV broadcasters Australian and there are a number with Prime & WIN the biggest and they will get between them about 750 million as well..

Remember that the Networks like Win & Prime pay for sport from the main channel..

A few years back WIN corp wanted to deal directly with Fox for sporting rights because they said they could buy them cheaper off Fox than the Networks…

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Midfielder said | March 1st 2010 @ 10:12am | Report comment

Redb

Is the international rules match and event or an international… I did leave it off my bad their … but has it yet reached international status… HMm lets see, 11 players, round ball, goal keepers, nets on football goals, … getting hard to say no… but then hand ball…

BTW do they play offside in the international rules …

Yes it should go on the chart .. as an event or a international that is the question….

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- Redb said | March 1st 2010 @ 10:29am | Report comment
  
  No offside, the playing ‘pitch’ is considerably larger and yes they can unbeleivably use all four limbs.
  
  Of course it’s an event. The game has attracted huge crowds in Ireland filled Croke Park (70,000) several times. Before they fiddled with the tackling rules it was drawing good crowds in OZ. Last time only 40,000, in 03 around the 70,000 mark at the MCG.
  
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  - AndyRoo said | March 1st 2010 @ 10:44am | Report comment
    
    If the U17 World Cup is on their then the International Rules deserves to be on their for sure.
    
    Though I tend to agree with Ken that junior world cups and womens football aren’t worth much if any money. I don’t even think the FFA get a cut from Olympic Football.
    
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    - Midfielder said | March 1st 2010 @ 2:38pm | Report comment
      
      Andy
      
      I could not disagree more about junior WC and the W-League…
      
      The junior WC squad will come in the main from the A-League teams and IMO will generate quite a solid following … nowhere near the Socceroos but a very solid following non the less.. As for the W-League it will grow steady … yes it will never come close to the major codes but it does not have too … as long as it gets over 150 K nation wide is fine.
      
      Football future issues are different to the other codes… AFL & NRL rely heavily on their domestic competitions , RU & Cricket on their international matches… Football at this stage on it’s international matches and mainly Socceroos… however having very broad base of products from W-League , A-League, ACL, Olympics, Asian Cup, WC .. each will provide a little … meaning the A-League does not need to match the AFL & NRL just do reasonably OK..
      
      The other revenue item football has it is international sales… presently the A-League highlights package (1 hour) is shown in 110 countries … now say 7 days a week for 33 weeks and repeated say 3 times per day, 693 hours per year. The 693 hours by 110 countries is 76, 230 hours of broabcast time…
      
      The 76, 230 hours of broabcast time at the following hourly rates.
      
      50 …….. 3,811,500.00
      75………. 5,717,250.00
      100 ……. 7,623,000.00
      125 …… 9,528,750.00
      150……. 11,434,500.00
      
      Add to this the game is shown across Indonesia (200), Malaysia (80 million), Singapore (4 million), PNG (5.6 million), NZ (4.2 million) …. essentially the A-league is shown live to almost 300 million people and is building ratings… this is also worth something…
      
      As I said before Andy … Football has an ability to unbundle it’s products more so than other because we have more … and also because we now have a small but steadily growing …regional international audience…
      
      Each part adds to the total picture … I think it will be light years (if ever) before we are any real threat to the AFL & NRl at a domestic competition … but if we build each part of the puzzle it will grow… remember to on the W-League that Chins, Japan & Keroa all have very strong international teams… so it could be that the W-League in the future may rate at say 150 K in Australia but 1 million across Asia…
      
      Football biggest problem is getting tho the next four years … and believe me that is going to be difficult…
      
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      - AndyRoo said | March 1st 2010 @ 3:05pm | Report comment
        
        I would love for you to be right Midfielder but for the underage stuff I think we are talking about a looooong way of if ever.
        I actually think their will eventually be some sort of rationalism in what is covered, will future generations be as big of consumers for televised sport as we are? I am not sure.
        
        I think the W league has a bit of a window of opportunity in that it could soon be the second best Womens football comp in the world and perhaps better because it’s in the Eastern Asian time zone (probably the best market for womens sport because a lot of their own existing competitions in men’s sports are under developed).
        We just saw Womens cricket shown on Channel nine and it getting decent ratings and I think if the Matilda’s could get such a leg up they would do as well or better (sandwiched between Winter Olympics and Mens Cricket).
        
        But overall I think your being very optimistic.
        
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      - Ken said | March 2nd 2010 @ 10:23am | Report comment
        
        Hi Midfielder
        
        I too think you are being a bit optimistic. The popularity of the mainstream A League is coming along OK with a few bumps but it still isn’t even on FTA yet itself. It’s reasonable to think that this will change and some growth will occur there but I can’t believe that Woman’s and Junior leagues will follow soon after. Popularity of Woman’s and Junior sport in this country is poor, cricket and the other footy codes all have various comps that only hardcore supporters know anything about. I mean, Netball is the number 1 team sport in the country by participation, the woman’s league is the premier event but they still have to fight for any scrap of exposure.
        
        By the by, I’m not denigrating any of these competitions – only pointing out that the networks will pay for the A-League + ACL (eventually) and the Socceroos. The other stuff will be considered filler only. While I have no numbers I would be very surprised if the international a-league highlights packages are big money-spinners. This wouldn’t exactly be considered primetime stuff when there are so many more prestigious soccer comps around the world.
        
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  - Midfielder said | March 1st 2010 @ 1:35pm | Report comment
    
    No questioning that the AFL international match is a success … both in crowds and rating… was more after it is a sorta mix of two codes and unsure what it’s title is … so event may also be wrong… it is something and it is successful … but what it is exactly i am unsure…
    
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    - Redb said | March 1st 2010 @ 1:50pm | Report comment
      
      Curiously spent the weekend at Wilsons Prom, on the drive down noticed an International Rules match at Korumburra (deep South Gippsland – more cows than people), but there it was the footy oval transformed into a Int Rules ground for the event. Melbourne Gaelic Athletic Assoc V’s Korumburra Bena Football Club – 3 games, incl Mens Under 18, Seniors & Womens.
      
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    - Michael C said | March 1st 2010 @ 1:50pm | Report comment
      
      weren’t we watching womens domestic and international T20 cricket just recently too??
      
      let alone,
      
      I’ve never seen u17s soccer on tele,
      
      if that’s there – then, cricket U19s should be there,
      
      does anyone broadcast interstate junior soccer??
      
      btw – in the near future, look for more coverage of AFL national championships U16s/U18s, esp as the two ‘international’ squads join in. Then look for more ‘international junior’ coverage of for example Aust tours to PNG/RSA and vice versa……this is potential growth area.
      
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      - AndyRoo said | March 1st 2010 @ 2:06pm | Report comment
        
        The U17 and U20 world cups are on TV, normally SBS or ABC.
        
        I just don’t think their rights are worth much money (in Australia).
        
        Edit: I think for the u17 the fact we havent qualifed for at least the last two doesn’t help it’s mainstream profile.
        
        Reply
        
        Michael C said | March 1st 2010 @ 2:09pm | Report comment
        
        fair enough (to a degree) the WC’s, but Middie mentioned “At Junior levels
        only” for “Inter State Competition”.
        
        A little nit picky………..more curious than anything. More SBS fodder??
        
        AndyRoo said | March 1st 2010 @ 2:23pm | Report comment
        
        I have never seen interstate junior football on TV, perhaps on Channel 31 (Community TV) but Ch 31 isn’t digital so I never watch it.
        
        I am not sure what this graph is about (even after re reading the article) is it trying to mention every competition that their is?
        I don’t think so because he excludes Sheffield shield (and just seems to forget about 20/20 and the bush ranger cup) on the basis no one watches it.
        
        So I assume he is talking about products that are worth money TV wise, An A league 2nd division, junior wallaby tours and under 17 Football are not products I think would ever be positive money makers. Nor do I think the “International Cup” in AFL would ever be worth enough money in the next 10 years to justify the production costs.
        
        Redb said | March 2nd 2010 @ 8:46am | Report comment
        
        “Nor do I think the “International Cup” in AFL would ever be worth enough money in the next 10 years to justify the production costs.”
        
        The Grand Final is currently played as a curtain raiser to AFL game, production costs minimal as OB already set up.
Midfielder said | March 1st 2010 @ 2:43pm | Report comment

MC

Good call on the Junior I mean U 17 & U 20 WC & AC matches … but as we stand now they rate poorly … but so did the Socceroos until a few years back…

They will come nowhere near Socceroo rating but they will IMO in the future get a solid rating..

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- Michael C said | March 1st 2010 @ 3:03pm | Report comment
  
  the thing none of us really know is just what content will get freed up re anti siphoning – - and thus lost to FTA, or in effect forced onto FTA, and how much greater depth there might be,
  
  because, if for example the AFL International Cup (and using this as the ultimate example of something that’s effectively come from nowhere – would never have been considered as FTA fodder but suddenly, with almost the entire PNG squad signed up as International rookies/scholarship holders – suddenly the tournament is gaining traction, respect and holds a mighty ‘curiousity’ value that could see it achieve cult following) – - -suddenly such an event could burst into the FTA domain, and even though it doesn’t represent high level international ‘professional’ competition……to those seeking ‘meaning’ from an AFL/International perspective – - it’ll provide that rather than a compromise Int Rules format…………
  
  ……however, and this is half the purpose of this point – - in season saturation.
  
  Part of the appeal of the International Cup is that if generally occurs in late October – - during the sporting doldrums (only the Spring carnival is on………oh yeah, and the domestic soccer!!!). So, it rates, and people go – as there’s nothing else on.
  
  So, timing for the peripherals can be super important. And for now, the AFL Int Cup corresponds with the AFL season to allow the participants access to see AFL first hand at the venues and to play the GF as a curtain raisor.
  
  So – even if production costs were held in check – I’m not sure that the ‘in season saturation’ would permit it to prosper.
  
  Again though – - it might be that the AFL IC is actually the Football that SBS should be backing in!!!! (or ABC…..sometimes I get confused about the agenda of each).
  
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  - Redb said | March 2nd 2010 @ 8:49am | Report comment
    
    I thought the last IC was held in August, but it could certainly be moved to October.
    
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Justin said | March 1st 2010 @ 3:08pm | Report comment

No spot for Domestic 50 over cricket? Its on Fox with most matches live now….

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- Midfielder said | March 1st 2010 @ 3:17pm | Report comment
  
  I did list Shield Cricket and commented no body sorry but very few watch these days…
  
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sledgeross said | March 1st 2010 @ 3:20pm | Report comment

What Middy? No NBL? lol lol lol

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Brian said | March 1st 2010 @ 5:13pm | Report comment

There seems to be an underlying assumption the money will be spent on local sports. Whats to say One HD won’t use the cash to buy the rights to the EPL, Champs Leauge, next round of IPL. Surely one of the commercial stations would want both the FIFA World Cup and Ashes off SBS.

I very much doubt the smaller sports will touch AFL or NRL. Domestically speaking they have the numbers thats where the funds will follow.

Finally regarding Big Bash I think its future is relatively bleak. Crowds were great this year but as the IPL grows it will become the major dometic T20 comp + crowds are easier to get when addmission is $5.

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- Midfielder said | March 1st 2010 @ 9:17pm | Report comment
  
  Brain
  
  You could be right on the WC, AC & EPL & Champions League … my gut is it will be a bidding war between Fox & 10… however that money goes overseas as you indicated, … I am more concerned how future FFA funding will operate and as I said earlier Football has many products to sell both within Australia and within Regional Asian & Oceania …
  
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