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The AFL’s next TV broadcast rights deal is likely to be sealed at some point over the next six weeks – possibly before the start of the season – however it’s still quite uncertain what the outcome will be. The big question is, can the AFL get a billion-dollar return for the rights to broadcast footy from 2012-2016?
Ever since the last agreement, which fetched $780 million, that’s been the goal.
Five years ago it seemed like a pipedream. Now, it seems more realistic than that – but it’s still hard to be too confident.
Before we attempt to judge any potential financial return, we must first assess what’s different this time around compared to five years ago. In some areas, there have been changes for the better; others, for the worse.
The two overwhelming positives are the number of extra games and changes to the anti-siphoning list.
Courtesy of the two new teams, Gold Coast and GWS, the AFL will have an extra game every week of the season to sell to networks. On top of this, it is also likely we’ll see a 24-round home and away season, even though there are logistical issues – such as the availability of the MCG and the future of the NAB Cup – that go with such expansion.
Assuming the extra two rounds do eventuate, this means the league will go from 185 games a year (including finals) to 225 games. This is a 21.6 per cent increase.
Curiously, a 21.6 per cent increase on the previous TV deal would give the AFL over $948 million.
Sure, this is a very simplistic way of looking at it. Yes, a little over half these extra games will involve Gold Coast and GWS, whose drawing power is unknown. But it does illustrate how the extra games will have a positive impact on the final outcome.
In addition, changes to the anti-siphoning list have enabled the AFL to deal directly with Foxtel for the first time, who are not only keen to increase their share of games – but pay for it too.
Under the current agreement, Foxtel have the rights to four games a week. The minimum they are likely to get from 2012 onwards is five games, however it appears their role may increase significantly.
According to The Age, the pay TV provider is pushing for all nine games to be shown live on Fox Sports, with certain games to be “shared” with free-to-air networks, which would air those games on delay.
While it’s unlikely Seven would share Friday night football, or Ten Saturday night football, the concept of shared games is likely to be a feature in some capacity. The free-to-air Saturday and Sunday afternoon games, for example, may be shown on delay on Ten and Seven respectively, yet live on Fox Sports.
The upside for the league is that two extra games will be shown live and, perhaps more importantly, they effectively get to sell the same game twice.
The downside is that the free-to-air networks will expect to pay less for these games. However, given their keen interest, it’s highly plausible that Foxtel would be willing and able to make up that loss.
Now, when you consider the above factors, along with inflation, a $1 billion deal would appear like an easy target.
If only it were that simple – there have been a few negative changes since the last deal, too.
For one, the AFL finally look like they are serious about demanding live football. While that will satisfy a massive number of supporters, it will give Seven – the chief offender when it comes to delayed telecasts – a fair case for paying a bit less than the maximum amount they would be willing to pay.
The current arrangement of having Better Homes and Gardens as a lead-in to Friday night games allows them four hours of primetime television on a night not renowned for having a great number of TV viewers. Going live would cut that back to only three hours and take all the associated advertising revenue with it.
It’s unlikely to impact Ten in the same way, who usually go live when they are able to. However, given Friday night football is the game’s No. 1 timeslot, it will impact on how much the AFL can earn. (This is all assuming Andrew Demetriou is serious when he talks up live football, of course.)
Another thing that has to be considered is that the cost of the rights last time got as high as they did thanks to the bid submitted by Kerry Packer for Channel Nine to win the rights.
As Seven and Ten had the right to bid last in that series of negotiations, it was generally accepted that the intention behind Packer’s bid was to punish Nine’s rival networks and force them to pay above market price for the rights. This time around, there is no right to bid last.
That’s not to say Nine won’t again make some sort of an attempt to punish their rivals, but it should be stressed there was a unique set of circumstances last time around.
It’s also worth noting that although they should be an important player in coming weeks, Nine’s interest does appear to have waned. Last May the network was so fanatical about Monday night football it proposed using virtual crowds to appease the AFL – now Monday night football is barely on the radar.
The extra game is likely to be a Saturday twilight fixture, with Thursday and Monday nights to feature in an experimental capacity only.
The two positive changes in the time since the last TV deal cannot be overlooked. Both the introduction of more games and the possibilities opened up by being able to directly deal with Foxtel will help the AFL in achieving their goal.
But it’s not all positive and there are so many factors that go in to the final outcome that predictions are an impossible task.
While there’s enough evidence to suggest that $1 billion is gettable, at this stage the evidence also suggests it’s far from guaranteed. Time will tell.