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Many media reports have suggested the NRL can earn around $1 billion for their next TV broadcast deal starting in 2013. Is this a shoe in or pie in the sky?
It is impossible to know this early, but here is a look at some TV ratings for 2010 and some ideas on how close the NRL may get.
FTA – Capital Cities
The AFL currently wins capital city ratings due to far more content shown in more cities on more channels. The AFL also has picks 1,2,3 and 4 on FTA while the NRL has picks 1,2 and 5.
Channel Nine has a rolling schedule where they set the NRL fixtures six weeks in advance and the AFL has a fixed season schedule. The NRL have suggested they will be changing to a fixed season schedule from 2013.
One factor for broadcasters is that an AFL game provides 60 mins of ads in a three hour program, an NRL game provides 40 mins of ads in a two hour program.
However, this shows volume of ads, not how much those ads are worth.
The FTA networks make 1.41 times more advertising revenue from Sydney and Brisbane than they do from Melbourne, Perth and Adelaide.
The following figures are for the first eight full rounds of the NRL and AFL in 2010 (before the NRL brings in the split round period due to the test match and State of Origin).
NRL
Sydney 24 games shown on Nine, avg audience 330K.
Brisbane 24 games shown on Nine, avg audience 196K.
Melbourne 15 games shown on Nine, avg audience 18K (Midnight coverage).
AFL
Melbourne 48 games shown on Seven, Ten, 7Two and One HD, avg audience 223K.
Perth 51 games shown on Seven, Ten, 7Two and One HD, avg audience 95K.
Adelaide 50 games shown on Seven, Ten, 7Two and One HD, avg audience 77K.
Sydney 45 games shown on Seven, Ten, 7Two and One HD, avg audience 28K.
Brisbane 49 games shown on Seven, Ten, 7Two and One HD, avg audience 35K.
The NRL has a higher average in Sydney than the AFL in Melbourne and the NRL has a higher average in Brisbane than the AFL in Perth and Adelaide.
The NRL has less content on FTA as they offered their product to only one network with their current broadcast deal and allowed channel Nine to market rugby league in Melbourne. This should be rectified with the next deal.
FTA – Regionals
The first area that the NRL dominates is FTA regionals, for the obvious reason that there are five million people living in regional NSW and Qld and 2.57 million people living in regional Vic, WA, SA and all of Tasmania.
Regional figures are difficult for your average sports fan to find. However, the networks, Foxtel, NRL and AFL are well aware of the exact figures.
An idea of their importance can be seen with Game 1 of State of Origin this year.
FTA capital city ratings were 2.45 million, but when you put in the regional figures, the game rated 3.6 million.
That’s an extra 1.15 million people from the regionals.
The FTA networks make a staggering 2.2 times more advertising revenue from regional NSW and Qld than from regional Vic, WA, SA, and all of Tasmania and the NT.
The AFL currently has only one team outside of the five mainland capital cities in the Geelong Cats (soon to be two with the Gold Coast joining the AFL in 2011), while the NRL already has four with the North Qld Cowboys, Gold Coast Titans, Canberra Raiders and the Newcastle Knights, as well as current strong bids from Central Qld and Central Coast.
The regional figures are such a strong factor for the NRL that David Gallop has suggested the NRL may sell their product separately to the regionals.
For example, sell to Channel Nine and then separately to WIN/NBN.
Foxtel
The NRL dominates Foxtel due to higher ratings, more content and Foxtel’s greatest market penetration being in NSW and Qld. The NRL has picks 3,4,6,7 and 8 on Fox sports and the AFL has picks 5,6,7 and 8.
The NRL had 40 games on Foxtel, avg audience 205K
The AFL had 32 games on Foxtel, avg audience 159K
The NRL has 44 of the top 94 shows on Foxtel so far this year, the AFL has only 20. The NRL has six of the top ten this year, the AFL has none.
Unlike FTA, Foxtel does not rely solely on ad’s to generate revenue but is a pay TV network.
This means that due to the NRL’s higher ratings, more people pay an $80 per month subscription fee to Foxtel to watch NRL games than are paying the same fee to watch AFL games.
Despite this, the AFL are believed to have received $225 million out of their last $780 million broadcast deal from Foxtel, a significantly larger amount than the NRL received.
Without the conflict of interest of News Ltd’s ownership in the NRL selling rugby league to News Ltd owned Fox Sports next time around, it is reasonable to expect the higher rating NRL to have a value of at least $300 million when the new NRL deal starts in 2013 (this is being conservative as it would be only $75 million more than the AFL received six years earlier).
The NRL only need to get twice the amount from the FTA networks than from this Pay TV figure to have made $900 million already.
The AFL has stopped its negotiations with the networks until the decision regarding the anti siphoning laws is handed down. This may allow Foxtel to bid directly against the networks for some of the top rated NRL and AFL games.
With its superior ratings, the NRL will expect a bigger slice of the Foxtel pie than what the AFL will get.
New Zealand
The NRL currently receive $12 million per year from SKY TV to broadcast NRL games into New Zealand. If a more productive set of negotiations – factoring in inflation – can bring a 50 per cent increase six years later with the new broadcast deal, this would give the NRL $90 million in a five year deal.
Media Predictions
Channel Seven have already stated they will be bidding on the NRL. One suggestion is that they will bid for State of Origin and Internationals.
State of Origin is a no brainer, with Game 1 in 2010 reaching a peak national audience of 4.2 million, phenomenal ratings for three mid-week, mid-season games.
The Anzac Test match this year rated an impressive 1.239 million viewers (1.826 million including regionals). Channel Nine’s lethargy in promoting international rugby league could be revamped through Seven if they see potential for the annual Anzac Test and a re-working of the end of season Tri-Nations, Four Nations or World Cup formats.
Channel Ten have also already stated they will be bidding on the NRL.
It is suggested they are after a Saturday night NRL fixture at the expense of their current Saturday night AFL games.
How realistic is this?
The average audience Ten received from the AFL is:
Melbourne 259K
Perth 101K
Adelaide 80K
Sydney 43K
Brisbane 56K
There is currently a sporting black hole in Sydney on Saturday night, but the average audience for the three NRL games is:
Sydney 330K
Brisbane 196K
Melbourne 18K (Midnight coverage).
Considering the value of ads in NSW and Qld, it is very possible Channel 10 would drop the Swans for NRL content in the northern states with prime time Storm games in Melbourne, which would most likely equal or beat the Swans current ratings in Sydney.
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