Why NRL TV rights deal won’t match AFL’s
295 Have your say
Ben Te'o in action during the NRL Round 26, Brisbane Broncos v Manly Sea Eagles. AAP Image/Action Photographics/Charles Knight
The removal of David Gallop by the Independent Commission (IC) was a huge step in the right direction for rugby league. We can argue over the way it was done but in the end the right decision was made.
Now that one of the last public symbols of News Ltd has gone, it’s time for the IC to fully move their attention to getting the best out of the next TV deal.
Here’s where a bit of political know how will be crucial to ensuring that the rugby league community is happy with the deal.
I don’t believe the NRL is going to get anywhere near the AFL’s $1.25 billion broadcast deal. And the reason is not primarily down to the amount of TV viewers either code gets.
Before I get to that we’ll need to analyse the numbers from both codes. These numbers are from the 2011 season:
AFL : 95,355,000 TV viewers – NAB Cup, AFL Premiership, Brownlow Medal, All Australian Awards, EJ Whitten Legends Game.
NRL : 87,978,000 TV Viewers – NRL Premiership, State of Origin, Test Matches, City Country, Charity Shield, All Stars, World Club Challenge. Note, there are no numbers for the Dally M.
Although the total numbers favour the AFL, the numbers favour the NRL if you average them out to a per ‘episode’ number. The AFL getting their TV Viewers from 238 ‘episodes’ for an average of 400,651 viewers and the NRL getting their TV Viewers from 213 ‘episodes’ for an average of 413,042 viewers.
Unfortunately, these ‘per episode’ comparison numbers are not the right ones to use when we’re trying to convince the TV networks to give us a similar deal to the AFL.
Here are some more numbers so our readers can have a quick reference to a breakdown of the events. I’ve bundled the league tests, City v Country etc under miscellaneous and same for the AFL with the Brownlow and so on.
AFL : NAB Cup – 6,357,000. AFL Flag – 73,961,000. AFL Finals – 12,256,000. Misc – 2,781,000.
NRL : NRL – 63,767,000. NRL Finals – 10,423,000. SOO – 10,595,000. Misc – 3,193,000.
Now this next calculation is where the massive difference between the codes occurs. A live game of AFL is on TV for three hours compared to two hours for the NRL, a 50% difference in favour of the AFL. Unless league changes the structure of the game in terms of minutes and halves we can’t do anything about the AFL being on TV for a longer period.
If you multiply the total TV viewers by the length of the time the game appears on TV you’ll get the real numbers that matter to the TV networks. The AFL gets 286,065,000 hours and the NRL gets 175,956,000 hours. Thats a difference of over 100,000,000 hours to the AFL.
Now to give us the ‘per hour’ metric using the AFL’s $250 million (per year for five years), the TV networks pay the AFL around 87 cents per hour for each person that watches an AFL game. Therefore, the AFL ‘works’ for 286,065,000 hours and gets $250 million for it.
If you were to apply this same principle to league then in theory they would receive just over $153 million (176 million hours multiplied by 87 cents) per season. Which for the NRL is a $765 million broadcast deal over five years.
Even if we were to consider a 5% growth in total TV hours for the next 5 years and then up the hourly rate by 5% to 91.35 cents from year one instead of a gradual increase, the NRL will still only get $890 million. This scenario is highly unlikely though because the AFL have already factored those situations into their deals so the NRL will be adding cream to numbers that have already had the cream added to them.
So using these principles I’m predicting the NRL to get between $760 – 860 million for their next 5 year deal, which is no where near the AFL’s. If the NRL mange to get $900 million then that should be considered an enormously successful outcome.
The problem for the IC is that the rugby league community are expecting at least $1 billion dollars. And no one can blame them, because most league journalists have been claiming thats what the NRL should and will get. Who’s going to get the blame when the fans lofty expectations haven’t been met.
With the IC we can’t blame News Ltd anymore.
I’m not sure how the IC is going to deal with this potential backlash. I’d prefer at least $1.2 billion, but given the circumstances I’d consider $800 million a fair enough deal.
The best thing I reckon the IC should do is try to shift rugby league’s obsession with comparing its worth with the AFL. Then they need to somehow lower the expectations of a $1 billion dollar deal. They’ll probably need to get in a PR firm to help them. In the end I’m not sure how they’re going to do it (fulfilling league’s expectations) but thats why they’ve been appointed to the IC in the first place.
Some numbers may change depending on how you slant it but the basis of my theory is solid. An AFL game is on TV longer than an NRL game and the viewership numbers are quite close. When those numbers are expanded to reflect a year or 5 years worth of numbers, the gap widens considerably in favour of the AFL.
If you’re interested in dissecting the numbers further go to: http://www.talkingfooty.com/tv_ratings_2011.php.
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