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As has been widely reported, the AFL has announced the biggest broadcast deal in Australian sport with a $1.235 billion deal involving the Seven network, Foxtel and Telstra for 2012-2016.
When the AFL announced its previous five-year deal of $780 million for the 2007-2011 television rights, it was apparent this was considered an opportunity by AFL House.
Within a short period of time, two new teams were mooted to spread the game using this largesse.
The Gold Coast, an area long coveted by the AFL with a strong expatriate base and local footy competition and Western Sydney, an area with a huge population base but little AFL football presence.
The AFL, with it’s bulging future fund from the existing rights deal, committed to spend $200 million over 10 years to support these teams.
Many questions were raised, in the Sydney media in particular, as to how this development was going to be funded with some predicting it would be the AFL’s Vietnam.
It was considered a bridge too far, that would stretch the AFL competition and possibly cause its downfall, especially if the revenue from television rights was not as generous as believed.
Many pointed to declining in television ratings for the Swans as proof of the AFL’s folly in creating a second Sydney team.
Some suggested the television networks resented being expected to fund the AFL’s two new teams.
One media analyst wrote in The Australian only a few days ago that the AFL should only get $800 million.
One wonders about their motives now, given that estimate was seriously off the mark.
Well, in massive windfall, the AFL just increased the cash component of its television deal by some $370 million over five years.
Just as importantly, the broadcast deal delivers considerable live AFL content via Foxtel and digital channels into the Northern markets for the AFL. Digital TV will be the norm by 2013.
It’s early days, but already Gold Coast has proven a pay television winner.
The recent Port Adelaide versus Suns game attracted 194,000 viewers on Foxtel for a mid-afternoon game between 14th and 17th on the ladder.
Given the much lower penetration rates in AFL states, where a 200,000 rating game is considered above average, it must have been a pleasing result.
Overall, some of the television ratings on free-to-air in particular for round five were outstanding and encouragingly for the AFL, pretty good relatively for Sydney and Brisbane.
As I wrote last year, the AFL’s Grand Final result would not have gone unnoticed for the excellent ratings the AFL received in Sydney and Brisbane. Especially, when contrasted with the NRLs results in its non-traditional markets.
There is a market for AFL in New South Wales/Queensland, it does not need to dominate.
The AFL now has an excellent platform to develop the game further and support the new teams, which is so critical for any fledging expansion club, no matter the code.
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