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Bring on the 2017 AFL media rights deal

Roar Guru
21st November, 2014
19

As discussions and negotiations begin to ramp up for the impending 2017 AFL media rights, the two overarching questions have to be how heavily negotiated is the social and online content of the deal – and will fans be the winners from the television side?

The 2012 deal that was signed by the AFL and it’s media partners was a historic one in Australian sport, passing the one billion dollar mark over five years.

This deal was able to be reached thanks to a bidding war among the network television stations and pay television subscriber Foxtel desperate to provide every game live as part of its ongoing growth plans.

What was an afterthought in this deal was the relatively miniature agreement that was put in place with Telstra for online content. Indeed, if the AFL is looking at growing the next deal it is not television, but online content that will be the key.

American sport and specifically the NFL is where the AFL most look. The key for the AFL going into the 2017 media rights is the NFL deal with global communications leader Verizon. In 2013 Verizon and the NFL negotiated a one billion dollar deal for Verizon to be able to show American football on mobile devices.

This deal was a 40 per cent jump on the previous online content deal.

To give this perspective, the NFL currently have a $27 billion deal over nine years – around three billion dollars per year.

The online content deal represents about $250 million per year. Again, in loose numbers the current NFL and AFL online deals seem on par at roughly 10 per cent of the overall figure.

However what the AFL needs to consider is that NFL has a legitimate online offering of their own and that the deal struck with Verizon might actually be best value for Verizon, considering recent trends away from watching football on the box.

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Recent reports from Nielsen showed that the NFL has seen a sharp reduction in viewership and this reduction is highest in the male 18-49 category. What the Nielsen study does not take into account, though, is whether this reduction is made up through online content.

There are no conclusive studies or report provider into online content, but general consensus would appear that it is not a case of people turning off totally, just turning off the box and putting on the phone.

Fantasy football has made it a must for fans to be glued to a device to track their team – hence any expectation would likely be exceeded when numbers are collated.

Bringing this back to the AFL it is crucial that the AFL recognises that online is the way of the future. Telstra should not be considered a lock to receive the next online content rights.

This should be negotiated as fiercely as what television rights are. If the AFL wants to get the best possible deal, it needs to recognise the crucial role that online content will play in the ongoing growth of the game.

The other option for the AFL in an online space is to further enhance and develop their internal capabilities. In the NFL’s example, having the ability to own and share your own content is a massive advantage, but you must invest in the technology to get the value.

So far it has appeared from an outside perspective that the AFL has not embraced and fully understood the potential of their own platform or indeed online content in general.

The last television deal was considered a clear win for fans, with every game being shown live on Foxtel.

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In 2017, the reality is that Australia will be in a different place to 2012 and Foxtel is no longer a viable option for most families.

Many fans argue that Channel Seven is not doing the game justice. As AFL staff are asked to do, they must look to the NFL and recognise that the real way for fans to win is through having multiple free television providers offering the football.

The AFL is in a strong negotiating place with the ability to offer six or seven unique time slots, depending on how they work a fixture.

Realistically though they could offer a unique time slot on Thursday night, Friday night, Saturday afternoon, Saturday twilight, Saturday night, Sunday early afternoon and Sunday late afternoon.

Instead of being comfortable with one station and Foxtel getting every game, the AFL should open their time slots up for negotiation instead of as one package.

Pitting the stations against one another is a help in driving a bidding war for the marquee Friday and Saturday night timeslots, but also means that a station that is unsuccessful can still successfully bid on a potential weekly Thursday game or capitalise on the AFL’s desire to have blockbuster Saturday fixtures.

Either way, opening up the fixture to the three major commercial TV networks can only lead to a win for fans.

At the moment four games a week, of which in a number of states only two are live, is simply not good enough for the fans. Getting three stations involved, getting six games free and mandating that they be live is a win for fans.

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You may lose on the Foxtel component of the deal, however they will still have the tagline of every game live and what is lost in Foxtel would be made up over having three commercial stations showing the football.

It is a long way out from 2017, but here is hoping that the AFL realise the opportunity that they have to get value from their online component of a media deal.

Let’s hope that, as is Gillon McLachlan’s punch line right now, the fans will be the winners.