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Opinion
There was a time, not long ago, when NRL reporting in the Sydney Morning Herald, was balanced, fair and unemotional. This was in stark contrast to News Corp, whose agenda has always seemed more tabloid and self-serving.
Frustratingly these days, articles from long-admired Herald journalists seem to be toeing the company line as Nine, its owner, tries to dismantle the current NRL broadcast deal – albeit with the intent of recommitting long term.
While it will pass, SMH articles carry the rider that ‘Nine is the owner of this masthead’ as if that presumes to offset any bias otherwise present.
Over at News Corp, I’ve lost count of the times journalists have denigrated the NRL’s administration, nit-picked issues in the game or generally pontificated over its activities. I’d conclude that News’ sports editors over a long period, and now Nine’s, feel the NRL can be dictated to because of the symbiotic relationship each broadcaster has with it because of funding.
NRL CEO Todd Greenberg, a whipping-boy of News and more lately the Herald, may deserve some of what is written but he’s overseen the building of a robust digital platform, something chairman Peter V’landys wants to unleash.
The NRL’s digital platform has enormous untapped potential and with that, a gateway to monetisation. ESPN, a potential buyer of content, is said to be desirous of a relationship.
(Matt King/Getty Images)
Thinking about COVID-19’s impact, it is hardly surprising that Nine and Fox Sports (owned by News) seek to reset current broadcast deals and to extend them.
Nine’s CEO Hugh Marks recently announced to shareholders that the organisation would save $130 million because of the NRL shutdown, while Fox is scrambling to maintain its subscriber base without NRL content and faced with new digital competitors like Netflix.
Before moving to the US in 2009, I was irritated by having to purchase a package of channels that held no interest just so I could watch the NRL. This is real frustration the NRL can exploit.
COVID-19’s potential impact on negotiations, whether for relevance or ‘convenience’, is intriguing. If you had to pick a dog in a two-dog fight, V’landys being one and Marks the other, you’d take the streetfighter rather than the boardroom pugilist every time. If Nine or Fox think they hold the aces in any renegotiation, that view might be to their peril.
Given his proven business prowess, what if V’landys has deliberately provoked a fight by running ‘Project Apollo’ without including Nine or Fox after both withheld payments?
Marks screaming like a banshee is being diligently reported by Herald journalists, whether about a bloated head office, squandered past payments or a need to change the game because Nine needs more ad breaks. When V’landys delivers a private blow or two in coming weeks, and he will, it will be mano a mano, with Marks having no advance notice of what has been discussed behind closed doors.
V’landys, giving all the impression that he is possessed of a Machiavellian mindset, has been publicly contrite and apologetic about Project Apollo after the event, but unless he gets what he wants, there has to be some chance season 2020 may be let go while the NRL goes about building a subscriber base for its own digital platform.
And, whether deliberately delayed or sabotaged by Nine and/or Fox or shut down by health officials, if the NRL does not restart, V’landys has exquisitely lined up scapegoats; Nine (and/or Fox) for trying to squeeze the NRL, or COVID-19 for safety reasons.
Adding starch to the chair’s position, players have already effectively agreed to pay cuts which the NRL can fund through next season, providing a fallback position that neither Nine nor Fox has.
(Cameron Spencer/Getty Images)
If the season is delayed or shut down, the NRL can aggressively pursue a subscriber base for next season, the maths of which is compelling.
Current funding from Nine and Fox is $360 million per year but that could be dwarfed with two million subscribers or exceeded by one million. Being overseas, I have real experience subscribing just for NRL via Watchnrl.com (NRL/Fox). My yearly cost for all games, men and women, and Fox NRL shows (in HD, live or on demand) is $US250 per year ($AU380).
Cast a net into Australia, New Zealand, the United Kingdom, Papua New Guinea, Pacific Islands and the United States and suddenly two million subscribers doesn’t seem so big. And, let’s not forget that neither Nine nor Fox fund the NRL payments from their resources; Nine prepays the NRL with ad revenue it sells at profit and locks in, Fox a combination of that plus a portion of subscription fees.
The NRL could offer the same opportunities to advertisers, adding significantly to its subscription coffers, and in doing so has the potential to damage the annual revenues of both Nine and Fox.
With two million subscribers, the NRL has funds of $760 million per year – enough to fund all current teams, expanded teams and to build and own infrastructure so that each team has its own purpose-built stadium of 20-25,000 capacity.
At no extra cost, the NRL could include membership to a team of the subscriber’s choice and pay extra to teams reflecting their efforts to promote the game and attendant tribalism. Brief research suggests that about 285,000 registered, paid-up members exist across the 16 teams in 2020 (303,000 in 2019). Those people are your first subscriber targets and represent over 14 per cent of the desired market size.
There are many strategic reasons the NRL might want to pursue its own streaming service anyway but the pause button pressed on season 2020 offers a once in a lifetime opportunity. Logistically, there are enough ‘plug and play’ providers able to step in with little notice and make the transition seamless.
For a game that has always survived, and most likely will, the NRL stands abreast an extraordinary opportunity to evolve into a sustainable business by transforming itself into a digital powerhouse.
Its content is coveted by advertisers as evidenced by the fact its games, including State of Origin, rank in the highest-rated programs each year.
With just a single stick of dynamite named V’landys, the game might finally ignite its true potential.
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