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.
manny
Guest
People are forgetting the biggest reason why AFL has and will contunue to get more money. ' Why do tv stations shows programs ? to sell advertising. Why do companies pay tv to advertise ? to sell products and services to people. Who decides which products and services we buy ? Women. Women choose how 80% of a households money is spent. The AFL has a much higher % of female viewers and these are who the companies want to see their ads. Whats the point of a 500,00o blokes in Sydney seeing your ads when they have no money to spend ?
TCunbeliever
Roar Guru
No it's not an issue at all, IMHO. The competition really isn't tilted in favour of either of those two teams at all, when you think about it.
Intrepid
Guest
I'm a newbie to this debate so please excuse me if this issue has been covered somewhere before. I am however keen to understand the uplifts that each code is looking for. As I understand it, the NRL currently has a 500M 6 year deal and the AFL has a 780M 5 year deal. Let's adjust these to take out non-cash (i.e. contra ad spot contributions) from the rights holders and say the NRL has a 450M cash deal over 6 years (which equates to 75M a year with inflation) and the AFL has a 700M cash deal over 5 years (which equates to roughly 140M a year with inflation) . Again, reading between the lines and having hunted down some articles about this, it looks as though both the NRL and the AFL want $1.0B cash over 5 years (so 200M a year). Am I right to deduce that this implies the AFL is asking for ~42% annual uplift and NRL wants a ~166% annual uplift in the cash components? Both uplifts look large but the NRL uplift is a bit outlandish isn't it? Any thoughts from the group?
GoGWS
Roar Guru
I don't really understand your point Crosscoder...... look if I was a RL tragic I'd cringe whenever Roy Masters opened his gob...I really would...his noisy hyperbole is boring and childish, and predictable...... and it does seem that Roy is shifting in the wind a bit here...he has absolutely no clue about what drives the value of the deals, which he's made patently clear from numerous error-ridden articles on the topic, but it does seem that reality is closing in on him... at times reality does seem to dawn on him that the AFL and NRL deals won't be the same - in these articles he quotes executives that seem to think the AFL will get more, quite a bit more... at other times Roy is off in fairy land quoting other TV executives saying the NRL will get their $1 billion, or implying that the NRL will get the same as the AFL in any event.... it's unsubstantiated fluff and drivel.... repetitive and boring... all of it.. the problem of course for Roy (and for some of his other cohorts in the RL media) is that reality must intrude into his delusional ramblings at some point.... there will come a time very soon where his delusional ranting on this issue will stop and then he'll shift gear into delusional ranting on conspiracy theories around how the NRL was ripped off and the AFL received some lucky/unfair advantage.....that's what Masters seems to be preoccupied in so much of his writing... alternately whinging about the unfairness then crapping on about conspiracy theories.... as for quoting Roy Masters... well why not,....I think he's a massive bore but having said that I do wind up reading a lot of what he writes just to see how may whoppers he'll include in his articles... how many outright false statements and distortions...his own newspaper has published retractions on his faulty statistics but that doesn’t stop him, he just keeps peddling the lies.... in some areas he seems to work on the principle that repeating a lie a hundred times makes it the truth... in 2009 Masters came out and claimed that the national TV audience for the NRL exceeded the AFL's "for the first time" ...mmm.. .this was very interesting from Roy... firstly, it was a concession that in ALL prior years the AFL had a larger national TV audience which is a huge concession (and contradicts much of what he has always implied/stated in his earlier work) ... and disappointingly for Roy, a few days after it published this Roy Masters lie the smh had to some out and publish a correction stating the numbers in Roy Master's article were not correct and that the AFL's national TV audience for 2009 was larger... did this stop Roy repeating this fib? - of course not!!.... he has included this false claim in almost every subsequent article... this is Roy's approach - say the fib once, stick your fingers in your ears, and keep saying it.... repeat the lie and hope other RL journos will pick it up and do likewise.... and they did... and now he's using a similar approach on the broadcast rights deal... say any old crap and just keep repeating it so that it takes on a some sort of 'truth' value - at least to those stupid enough to take him seriously (other RL journos and some RL fans).... Again, I don't really get your point Crosscoder... if I was a RL tragic I still would have no time for Roy Masters.... he is a real shocker...
seanmaguire
Guest
While I find the treatment of Union pretty poor, the problem has always been that the ratings just aren't there to justify FTA channels paying a lot for the code. Foxtel are wuite happy to pay for it because as you say it drives subscriptions. The S15 will always have a problem because of the timezone difference and the same applies to Wallabies games except the Bledisloe and home tests. But I agree that the hoarding of some games is maddening. Hopefully this will change with the multi channels but I can't help but get the feeling that the status quo will be maintained because regular season NRL and AFL games only have to be shown within four hours of being played, which still means the channels can show some old movie on the multi channels and it doesn't breach the legislation.
MyLeftFoot
Roar Guru
An AFL station at half the price of the complete Fox package would be fantastic.
Koops
Roar Rookie
Interesting analysis, I dont know about you, but i would prefer to own my house rather than be paying it off or renting, Owning your own property has many benifits, including playing when you want, renting out the facility etc etc etc . The SANFL own their land and stadium, it gives them a pretty good bargaining/bartering rights when dealing with Governments/other sporting bodies etc. The AFL/WAFL/SANFL has been bent over a barrell for many years by cricket authorities (MCC, SACA), and i think historically this has been the big impetus for owning their own grounds. It's human nature to seek the best deal for yourself, your family, your workplace that you can.
MyLeftFoot
Roar Guru
And in the future, that's all extra dollars that the AFL will pocket. The one offs are just extras, it's the 50 games per annum that pays for the stadium. The examples you mention are mere drops in the ocean when looking at the aggregate numbers.
Ian
Guest
Interestingly for a stadium that will probably go to the AFL, the highest attendances at "the dome" are; Largest Rugby Union attendance; 2001 British Lions tour to Australia second test, 7 July 2001 Australia vs British and Irish Lions 56,605 people Largest A-League attendance Grand Final, 18 February 2007 Melbourne Victory vs Adelaide United 55,436 people Largest Rugby League attendance State of Origin Game III, 5 July 2006 Queensland vs New South Wales 54,833 people Largest AFL attendance Round 14, 5 July 2009 St Kilda Saints vs Geelong Cats 54,444 people Looking at the attendance figures for the 2011 NAB cup, it may well be worthwhile bringing in the seats and converting to a rectangular stadium.
MyLeftFoot
Roar Guru
I ain't seen $1.1 bill mentioned by anyone - care to provide a rationale why you think it will reach that high?
Ian
Guest
Jaredsbro I tend to agree with most of what you say, unfortunately in Australia, games that are on the list can be hoarded. My thoughts are if the game / sport is of such national significance that it requires protection then the onus is on the FTA successful bidder to play the game live or near live. In Melbourne there was the famous example a couple of years ago where "The Sound of Music" film was played into Victoria when they were live feeding a Bledisloe Cup match into Sydney and Melbourne. The quirky regional code (AFL) benefited by having no competition and the poor consumer was forced to watch either a 60's rerun or the local code. No suprises why AFL rates so highly in its heartland when there is that sort of choice. This Friday, the first NRL game will be shown into Melbourne at 12.30am some five hrs after kickoff because Channel Nine can. After paying for the rights, production costs etc, one would think in a fair society that they would onsell those live rights to FOX sport but even the earliest FOX can show a game is 11.30pm and if your favoured team is in the second game then that will be shown about 2.30am. I'm sure you'll agree looking at the above, we are not served well by the current anti siphoning legislation and corrupt media. With respect to News holding viewers ransom, the sporting body should be at arms length to the media they're selling to and maximise their return so they can invest at grass roots level etc. The NRL body is hopelessly compromised in this regard.
Big V
Guest
Can't wait for the Foxtel announcement and hope they announce a special AFL deal at a discount so that all Australians can afford pay-TV.
Bend it like Barassi
Guest
The AFL will get $1.1 big ones. Lock it in Eddie.
Andrew
Guest
About 5 all up. It's not like they play them every week, as NRL games are. Also rarely miss an International match involving Australia on the TV, even the ones played in England. The fact that countries play each other, despite what you may say about crowds (which have been quite good after dipping in the late 90's, early 00's) means it has an international aspect. Even have a world club challenge which was only played recently. Most sports survive on local competition as the bread and butter of the sport (the main exception I can think of is cricket). It's just that there are other levels to aspire to in most sports, making International team, state teams, etc. Which is why the AFL oddity point was raised earlier.
GoGWS
Roar Guru
you have to go back to the earlier post from Matt S where he refers to a professional sport being localised in one market as though Australian Rules is some sort of oddity...it's not....my point was that ALL sport is localised....and it is...soccer has passionately followed intra-national leagues...OK it also has sport competitions at an international level but so what.... how many RL internationals has you actually been to see, and how many NRL club games?....you can bang on all day about some sort of mythical 'international' aspect of RL but meanwhile back on planet reality its fair to say RL fans invest 99% of their time/energy/passion in the club team...the numbers that show up at internationals hardly proves your point....
Andrew
Guest
You forget that extra teams mean that the talent is spread out further, which in turn sees 2nd tier stars, getting 1st tier star type money. So in essence there is more opportunity for players to increase there earnings.
db swannie
Guest
Sorry you are wrong...If a sport is played at a professional level between nations & there are professional leagues in other countries then the sport is International... & no matter how many times you say it isnt ,doesnt change the fact that it is. Fact ..RL has an international profile.
Andrew
Guest
Super League in the UK is really only a retirement home for ex-NRL stars, or younger players who can't make it here. The benefit of playing in the UK has also gone down with changes to how tax laws now work over there. If anything we are seeing the young UK Super League players coming to Australia now because the Australian dollar is so strong. Anyway, player crossover between union and league will continue to happen for many different reasons (Different challenges, being able to play in a domestic comp vs travelling the world etc). Money is only one part of the equation. Yes the NRL need to get more money for there product, but it's not because of the threat of Union or UK Super League. It's because it didn't sell itself for the right price last time.
Andrew
Guest
What is your definition of International then GoGWS? Please enlighten us.
MyLeftFoot
Roar Guru
Good point Aussie. Are you THE Aussie - of Tiger fame?