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Tuesday’s A$2.508 billion AFL rights deal is being heralded as “colossal”, but while it surpasses that of previous deals, it is still far from that seen abroad.
Last year’s nine-year NBA deal, for example, was valued at US$24 billion, with pay TV provider Time Warner one of the biggest winners.
Sporting rights could be the last big money spinner for pay TV broadcasters, due to the fact that consumers watch sports live. This gives the broadcasters an opportunity to present advertisements to a mass audience simultaneously, something which has become harder for the broadcasters in a fragmented media environment.
The value of live sport could have been why News Corp executive chairman Rupert Murdoch showed up at the announcement. Murdoch made News Corp’s position clear:
“This is a very significant investment for us, we’ve always believed that this is the premium code in Australia, it’s the national game…Were also committing all of our platforms to support the AFL everywhere, in every state. We are are very happy to be doing this, we believe in the strength of the game and we will do everything to make it stronger”.
The A$2.508 billion deal, which runs from 2017 to 2022, includes buy-in from Seven, News Corp and Telstra. Unlike the NRL, which only announced part of its expected deal, the AFL waited until all parties were signed and present.
The annual value of the AFL broadcast rights continues to grow, keeping in mind more recent deals have included pay and digital rights. The rights of 1971-75 were valued at A$200,000, 1988-92 A$6 million per year, 2002-06 A$100 million per year, with the current rights valued at A$250 million. The new rights deal adds almost A$170 million per year.
The new six-year deal includes the same media organisations – Seven, News Corp and Telstra, that are involved in the current five-year A$1.25 billion rights arrangement. The deal has exceeded expectations, with one analyst predicting last year it was likely to fall short of the A$2 billion mark.
AFL CEO Gillon McLachlan at the announcement of the AFL’s next Broadcast rights deal (Photo: AFL Media)
As part of the new deal Seven will broadcast games in HD, though it hasn’t gained the same streaming rights that the Nine Network did for the NRL. Instead the digital rights were again secured by Telstra.
News Corp’s Fox Sports will have the rights to broadcast all games across the season with the exception of the grand final. As part of the agreement, Fox Sports can sub-licence the 3.20pm Saturday game to a free-to-air provider. It is highly likely this will be offered to Network Ten, which has recently become closely aligned with Foxtel. If the game was offered to Network Ten, it would see the network again involved with the AFL, as it was during 2002-2011.
Unlike Seven, Foxtel has gained rights to broadcast across all devices which could create both competition and some unclear expectation of how the digital rights are defined.
While Telstra has secured the digital rights, Foxtel has said:
“Under this deal, for the first time, Fox Footy will be able to be broadcast on all devices, which means that if you subscribe to Foxtel Play or use Foxtel Go, you’ll now be able to watch all games on PCs and Macs as well as tablets, phones and games consoles.”
Foxtel has also stated:
“If you love AFL you need to be a Foxtel subscriber, and with our recently reduced pricing there’s really no reason not to sign up.”
But it is unclear if the pricing will change from the current structure. The current pricing of the Foxtel Play service is A$25, the sports package is an additional A$25, making the total A$50 per month. It should also be noted that currently the FootyPlay service is not available via Mac/PC, although based on the statement above this will change for the new rights.
So if Foxtel will be streaming all games how does this play against Telstra’s digital rights?
We’re yet to see how Telstra will deliver on its promise to “transform the experience” for AFL fans, and there are already alternative options in the way in which sport could be presented to an audience. It is a case of seeing whether Telstra will utilise any of these or new technologies that will be released between now and when the rights commence in 2017.
In comparison to the Foxtel option the AFL Live Pass currently costs consumers A$89.99 for an annual pass, although there is currently no Apple AirPlay or Google Chromecast option to stream to a TV. A TV streaming option will be available with the new rights via Telstra TV, a new service it will launch in September.
It is clear that Foxtel and Telstra will be competing for subscriptions for the services.
AFL CEO Gillon McLachlan says the new deal will allow for growth in the game to “create new generations of supporters, members, players and volunteers”.
The growth in the game was made clear over the weekend when the women’s game between Melbourne and Western Bulldogs averaged an audience in Melbourne of 175,000, in comparison to the Essendon game which averaged 114,000.
These games are not part of the new AFL broadcast rights deal. Despite this Seven West Media CEO Tim Worner has publicly expressed an interest. Given the ratings acquired by the women’s game, it could a tempting alternative for other broadcasters, both free-to-air and subscription.
The high level of interest shown toward the women’s game shows the AFL is expanding and that the broadcasts should expand with it. In the future there could be a secondary agreement associated with the new rights. Seven and Foxtel could broadcast the games via its joint venture, video on demand (VoD) streaming service Presto, to differentiate it from the VoD leader Netflix.
The alternative is a new class of media rights which includes the women’s games along with other exhibition and international AFL games. These rights could be acquired by Ten or Nine, or could allow new players like YouTube to become involved in the broadcast of AFL.
The decision by Telstra to continue to obtain the digital rights for the AFL also raises questions about the NRL digital rights. Will Telstra bid for these or could we see new players in the market to broadcast NRL games across digital streaming platforms?
Marc C-Scott is Lecturer in Screen Media at Victoria University
This article was originally published on The Conversation. Read the original article.
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