Game changes see NRL poised for its billion dollar payday

By Ryan O'Connell / Expert

The NRL is poised to earn a $1.2 billion TV rights deal with Channel Nine and Fox Sports, but some fundamental changes to the game will be implemented to ensure that all stakeholders are happy with the agreement.

While some might see the proposed changes as radical, they shouldn’t come as a large surprise. In August last year, I wrote an article that outlined how the NRL could earn a similar deal, in terms of money, to the AFL.

Essentially, I stated that the NRL would need to explore the potential of allowing more ad breaks within a live broadcast if the game wanted to dramatically increase the revenue its TV deal generated.

When it comes to free-to-air broadcast of rugby league games, it’s important to understand that there are three scenarios.

1. Games are shown on a delayed telecast, allowing the broadcaster to insert ad breaks.
2. Games are show live with minimal ad breaks, but the broadcaster pays a much lower amount for the broadcast rights.
3. Games are shown live, but with stoppages in-game, allowing the broadcaster to insert ad breaks.

The NRL is acutely aware of these facts, and that’s why option three is looking likely, which will see the new broadcast deal include the following changes.

These proposed stoppages will allow Channel Nine to broadcast more ads, and generate an estimated extra $35 million in annual revenue. Meanwhile, fans will be able to watch Channel Nine’s Sunday match live, at a 4pm start.

I can already hear the chorus of fans in uproar, claiming that adding stoppages in play to accommodate a TV network is crazy, and that the new breaks will interrupt the flow of the game.

However, a committee that included New South Wales Blues coach Ricky Stuart, former coaches Daniel Anderson and John Lang, and legends Wayne Pearce and Trent Barrett, all agreed on areas that the game could include breaks. The stoppages are targeted at times when play is held up anyway, allaying fears that the breaks would interrupt the free flowing nature of the game.

Analysis was done on NRL games and it indicated that currently, on average, sideline restarts take 35 seconds, line drop-outs take 25 seconds, and restarts after a try take 23 seconds.

So the game will not be dramatically slowed down with the proposed changes. By adding a few seconds to the existing breaks, the game can formally include scheduled ad breaks which benefit the broadcaster, while also ensuring the NRL gets the TV deal it deserves.

Meanwhile, Fox Sports will be pitching to show every NRL game live, up from the five matches per round it currently broadcasts.

All stakeholders in the game should be happier with the new deal. Channel 9 will be able to generate more revenue, fans receive more live coverage on free-to-air, Foxtel receives additional games, and the NRL gets its payday.

Last week, I argued that the quality and quantity involved in the broadcast of the NRL was more important than the actual amount that the deal would generate. However, the majority of AFL and NRL fans were still hung up on the actual financial figure that the NRL would receive.

Well, it seems like that figure will be $1.2 billion.

Judging by the comments on last week’s article, some AFL fans will need to eat humble pie.

And some NRL fans can turn their attention to something more important than a measuring contest.

The Crowd Says:

2012-08-21T02:42:22+00:00

Emma

Guest


Well looks like this will exceed the AFL's $1.2billion. Have just announced a $1.02 fox/nine deal with the Internet and New Zealand tv rights still to be announced (telstra paid around $200 million for AFL internet rights alone). I think a few people made comments on here like "if the NRL gets anywhere near a billion I'll dance naked in the street, or walk from Melbourne to Darwin etc.' Might be time to polish up those walking shoes and get a full body wax people.

2012-05-11T03:02:09+00:00

Jaceman

Guest


Yes it is tradeoff but the Voice is doing well for Nine but the rights and cost of the show is quite high so whether they make any money is arguable esp if people get bored with the pedetrian pace of it. So Ten may need sport but only they would know the risk they run if advertisers dont flock to it if they pay over the odds. Murdoch and packer are RL people but they have burnyt money previously in joint ventures so may be more risk averse...

2012-05-11T02:58:52+00:00

Jaceman

Guest


Qgirl, Politeness please - The point about 5 cities is that AFL has teams in each and can reach a bigger audience with a national coverage for national advertisers. NRL is catching up but AFL cap city audiences are bigger week to week, the demographic is different, one extra FTA game (essentially 2 extra) and there are more women viewers. Hence sponsors of AFL teams attract more national advetisers. THe Morgan polls show 50% more Aussies have an occasional interest in AFL compared to NRL perhaps because Qld/NSW share with RU. You cant change these facts. The advertising revenue of the cap cities bears only a minor impact on this discussion considering the national advertising market for AFL is $125m which is less than 10% of the total and NRL even less.

2012-05-10T11:59:54+00:00

Queensland's Game is Rugby League

Guest


Jaceman said the AFL commands more money from the networks because a) it wins 3 of the top 5 cities and b) Aussie rules games last longer than rugby league games. "As we say again cap cities numbers are the important ones for advertisers with a longer game." The three metro cities AFL rates well in are not as large as the 2 metro cities that prefers rugby league. Good for rugby league, not so good for the AFL. It's why the AFL is wasting hundreds of millions of dollars promoting the game in Queensland and NSW. They know their game cannot survive on Melbourne, Adelaide and Perth. The new deal will see rugby league provide the broadcasters with more advertising revenue. That makes Jaceman's second point redundant.

2012-05-10T03:54:45+00:00

Australian Rules

Guest


No, the difference between a Queenslander and the rest is that they have a century-old little brother complex with respect to NSW...and obsess over whatever vague concepts they believe make them more... Queenslanderish...whatever that is.

2012-05-10T03:50:23+00:00

Australian Rules

Guest


And..? The figures show that the biggest overall advertising revenues *gasp*...coincide with cities according to their poopulation...!! Are you surprised by that? And it has no reference to sports broadcasting.

2012-05-10T03:50:23+00:00

warren

Guest


Macca what are you on about here? What has the NBN got to do with a RL TV deal? Seriously confused.

2012-05-10T03:48:17+00:00

warren

Guest


Thats the whole point of trying to get more ad's in!! You seem to forget the SOO is the biggest rating sports event in Australia 3 times over and add to that a few tests at the end of the year.

2012-05-10T03:45:46+00:00

warren

Guest


Who cares what is south or west of Wagga!!

2012-05-09T22:17:09+00:00

db swannie

Guest


Mick Ten need a premium rating sports show,so do nine. Whichever misses out will lag a distant third in the ratings race for FTA stations. 10 have been clearing the decks for 12 months to have a hit at the rights. & as for your last paragraph, Jesus how many times does it have to be explained . They are going to utilise existing natural breaks in play. Not create new ones. The only difference could be a longer H/T. Currently we have say a well placed kick in goal. Player trapped ,Its a drop out . Instead of 2 replays showing the kick,Rabs & Gus waffling on for 30 seconds about who knows what,we go straight to a 30 sec ad,come back as the Drop out is being taken.. No problems.

2012-05-09T13:11:42+00:00

Queensland's Game is Rugby League

Guest


http://www.thinktv.com.au/SiteMedia/w3svc371/Uploads/Documents/FREE%20TV%20AD%20REVENUE%20FOR%20COMMERCIAL%20TELEVISION%20NETWORKS%20JAN-JUN%202011%20.pdf

2012-05-09T13:05:09+00:00

Queensland's Game is Rugby League

Guest


Advertising revenue for commercial television networks January to June 2011 Sydney: $526,924,232 Melbourne: $383,347,892 Brisbane: $239,526,006 Perth: $152,477,889 Adelaide: $106,126,170 Brisbane + Sydney = $766,450,238 Melbourne + Perth + Adelaide = $$641,951,951 Advertising revenue for commercial television networks July to December 2011 Sydney: $577,597,088 Melbourne: $434,129,053 Brisbane: $283,258,091 Perth: $174,983,262 Adelaide: $117,750,735 Brisbane + Sydney = $860,855,179 Melbourne + Perth + Adelaide = $726,863,050 http://www.thinktv.com.au/SiteMedia/w3svc371/Uploads/Documents/Free_TV_Revenue_figures_July_to_December_2011.pdf Are you going to concede that you don't know what you're talking about?

2012-05-09T12:49:34+00:00

Mick

Guest


Ten won't get the rights. Check out their 2012 first quarter profit margin and throw in the fact they have to bid 20% more than the existing rights holders to knock foxtel from their 'First and last call' pedestal. The problem with the tv rights issue is that it takes the focus away from they key issue. With any form of entertainment you need people to attend in order to secure long term success. Our sporting administrators borrow heavily from the usa but they fail to realise Australia is a different market to America. Importantly there are not as many people living here so if more games are broadcast live the fans have less motivation to get up off the couch and attend matches. The effect showing games live on tv has on attendances is more significant in Australia because there simply arent as many fans. America maintains strong attendances by creating an 'attend the game' culture among fans. In smaller cities games are aired on delay or blacked out and this encourages fans to attend games. In Australia If more games are shown live this will lead to fewer people attending matches. Once crowds fall away viewers switch off. This rights deal might be a windfall for the nrl but it needs to avoid overlooking the importance of attendances in amongst all thisntv talk. Cricket has seen an alarming drop in attendances since it agreed to allowing ch 9 to go live into the city where a match is being played. In the old days you used to have to tune your television to a regional network to watch cricket. Remember the excitement whenever the commentators would announce 'this match is a sellout Sydney viewers will get the full game?' I think that a similar policy should be implemented for the next tv deal. At the very least a Sydney derby should be delayed into sydney to encourage fans to attend matches. I appreciate that the move to live games on Friday nights was imposed by tv networks seeking greater revenue from advertising but surely they brought in more $ when games are delayed and the network has the chance to run more ads? If there is a shortfall in advertising by showing games on delay I'm confident the shortfall in revenue would be cancelled out by increased gate takings. If we end up with a situation where fans are complaining because they have to watch a game with ads. It might encourage them to attend matches and that can only be a good thing

2012-05-09T10:37:50+00:00

Dean - Surry Hils

Guest


Robust debate is great - it's often how we earn. I'd still like to see some figures from the networks for the key demographics in discussion. I'd be grateful for a link.

2012-05-09T10:17:56+00:00

db swannie

Guest


Brett.,As i said ,there is a very very smart poster on a RL forum & he is always bang on the money ...That is why i said i guarantee by the end of the week. http://news.smh.com.au/breaking-news-sport/rugby-league-tv-deal-heading-to-market-20120509-1ycxk.html Rugby league TV deal heading to market Steve Jancetic May 9, 2012 - 7:29PM ARL Commission officials will meet rival networks Seven and Ten later this week for talks which the game's administrators hope will drive the new broadcast deal past the $1 billion mark. The Commission this week received initial offers from current rights holders Network Nine and Fox Sports, and will head to the open market seeking the best offer.

2012-05-09T09:25:51+00:00

Crosscoder

Roar Guru


Simple facts are ,women who regularly attend games are more likely to watch on TV,than those who don't .That is my point,and the relevance of attendees at various clubs as an example is relevant. Sorry if your are unable to grasp my point,in response to your dumbing down.It is not hard really. . I stated Japanese product,meaning in general. I refer to your initial comment when you referred to the split up of AFL viewers which I conceded and actually stated so.So I don't know who is actually reading my post. .My view is there are still numbers of the female variety who watch the game(rl) on the box.Why the hell did they do the Tina Turner ad,to appeal to the female viewers and get them to the games.. ..I got involved in the game,due to my wife who followed St George,prior to that I was part of the union. Yes male viewers dominate and yes the ads in the main are geared to them,but you are kidding yourself, if you think female viewers are somehow in absentia . I don't put labels on anyone Dean , that was not my intent, if I disagree with someone in a public debate I respond accordingly.I have a differing view,despite supporting the same code.That's life champ.

2012-05-09T08:26:22+00:00

Dean - Surry Hills

Guest


Both Wesfarmers(Coles), and Woolworths market to men as well - as I've stated above, you will find that men are on near equal terms when it comes to food preparation as the fairer sex - that's why shows like Masterchef rate so well. They advertise more because they've considerably grown in size, and so has the nations population. At no time have I discussed female attendances at games. I have only mentioned TV - so stop dumbing up this article which is all about television rights and expected payments, with your jabbering about how many females you saw at the last Shark Park home game. Toyoda did not make engines for Japanese tanks in WW2 champ - so I'm fine with their cars. I bet, drink, and eat my share of rubbish - where did I state that I was a wowser? You've stuck some bizarre labels on me - everything from disliking big screen Tv's and anti-speeding ads. Did you bother to read my posts - or are you just the creative type ? This is not a competition between AFL and League for me - about who gets the bigger paycheck. This is about the NRL selling the TV rights for what they're truly worth as the number one male saturated program schedule each year. Finally Crosscoder - League is the game I love - so it appears that you're only arguing with yourself !

2012-05-09T07:21:41+00:00

Jaceman

Guest


Yes but they put in replays now even if nothing spectacular happened so maybe people wont care..

2012-05-09T07:15:16+00:00

Jaceman

Guest


Cant wait for a Noel article during SOO...

AUTHOR

2012-05-09T07:07:21+00:00

Ryan O'Connell

Expert


Hey Noel, No mate, it wasn't me. I haven't written an article on Billy Slater. Cheers Ryan

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