NRL aiming for record $1.4 billion TV deal

[UnderCoverBrother]

IT will be the richest sports deal in Australian television history - a $1.4 billion bonanza that will see the NRL obliterate the AFL to secure the most lucrative TV rights payment seen in this country.

That is the scenario sold to NRL club chairmen and CEOs yesterday when they were briefed on the possible outcomes for rugby league in the upcoming broadcast rights negotiations. A startling figure of $1.4 billion - which would surpass the NRL's current deal by $900 million - was put forward as a possibility when negotiations are finalised for 2013 and beyond.

Colin Smith, from Melbourne-based electronic strategic consultants LEK, addressed the meeting of the code's officials at Coogee. Mr Smith, who is employed by the NRL, told his audience rugby league had more TV viewers and should obtain more cash than AFL, which has attracted a $1.25 billion deal.

He said the NRL could look at three scenarios - a $1 billion deal, a $1.2 billion deal and, finally, a bullish $1.4 billion deal - giving all clubs the chance to share in the NRL's bulging bank balance.

At present, 37 per cent of revenue is directed through grants to clubs, which is equal to the AFL. But with a huge TV deal, clubs want the independent commission to determine whether that share should increase.

NRL CEO David Gallop would not comment on exact TV figures discussed at yesterday's meeting, but said: "We worked through some scenarios. Obviously we have looked at the media landscape and what our expectations are and given the game is going so well on television.

"We modelled a number of assumptions. They are assumptions only. We modelled a scenario where everyone will be happy."

Mr Gallop said while negotiations were yet to commence, a good deal of preparation had been undertaken.

"The clubs went away comfortable that, when the negotiations can start, we are in good shape," he said.

Asked if the deal could surmount AFL's broadcast contract, Mr Gallop said: "I know you want me to tell you a number but I'm not going to.

"We are certainly conscious of the result the AFL got and conscious of how well our game is going. You can draw your own inferences from that."

NRL provided 77 of the top 100 shows on pay TV last year, while 3.765 million nationally watched the State of Origin decider this month.

Asked was NRL now ahead of AFL, Mr Smith said: "In TV audience, it is. Foxtel's pay TV for NRL is up 20 percent.

"And then you look at State of Origin, just under 11 million viewers.

"This is a fantastic television sport. It is the leader."


Source: http://www.dailytelegraph.com.au/

 

[Bakes]

Should be 1.4Bil MINIMUM

 

[Parra_Power]

And a couple days ago SMH came out of the closet with a piece about how the NRL might sever ties with Fox Sports and solely rely and Free-To-Air dollars... Journalists...:brick:

1.4 Billion seems too hopeful though considering the lackluster ratings in states other than ACT, NSW and Queesland...

 

[chris_e_fresh]

We will see

 

[Raysie]

To get $1.4 Billion, the game of Rugby League would have to change a fair bit. We're talking crap like slowing it down, more stoppages for adds etc. etc.

I could see us reaching $1 Billion, but nothing higher.

To be honest though, it would be hilarious if the NRL deal was higher than the AFL deal.

 

[VAI]

NRL could get $1.4b in bumper TV rights deal

NRL officials have raised the prospect of a massive $1.4 billion television deal that would outstrip the AFL and enable officials to raise the salary cap to more than $6.6 million in 2013.

The $1.4 billion figure, which would surpass previous expectations, was mentioned during a briefing to club bosses on projected increases to the salary cap and club grant under the next broadcast deal.

The conference of club chairmen and chief executives was also given estimates based on the NRL negotiating a five-year television deal worth $1 billion and $1.2 billion - the amount of the AFL's recent deal with Channel Seven, Foxtel and Telstra.

Under the three scenarios, the salary cap would be increased to:
•$5.1 million (under a $1 billion TV deal);
•$5.9 million ($1.2 billion), or;
•$6.6 million ($1.4 billion).

Clubs would receive even more, with their annual grant to rise to:

•$5.6 million ($1 billion);
•$6.45 million ($1.2 billion), or;
•$7.2 million ($1.4 billion).

However, both the salary cap and the grant could increase significantly as the figure for the grant was based on 37 per cent of the NRL revenue being distributed to the clubs.

Some club officials argued that was the same formula the NRL uses now but there would be far more money in the game as the administrations costs are not likely to increase significantly.

NRL chief executive David Gallop said the figures for the grant and cap were conservative estimates, but the exact amount would depend on how much the game received from the next broadcast deal starting in 2013.

''It is not my place to confirm the numbers that we discussed because that was done on a confidential basis. However, we did model some assumptions,'' Gallop said.

''We put forward a proposal based on a minimum percentage distribution of the game's revenue.

''We felt that it would be irresponsible to model a lift in that percentage in circumstances where, particularly, the club chairmen have made it clear that they want the [Independent] Commission to make those type of strategic decisions. It was a minimum level and shouldn't be taken as anything more than that.''

As revealed in yesterday's Herald, the clubs want the grant to be more than the salary cap and the figures provided yesterday showed a 10 per cent difference. The grant and cap are both expected to increase each year of the broadcast deal.

''We made it clear that the commission may decide that it wants to invest in different percentage proportions to the current arrangement but the percentage is pretty much on par with the AFL's distribution to clubs,'' Gallop said.

The man advising the NRL on TV negotiations, Colin Smith, refused to offer a figure when asked by club bosses how much he thought the game could get for the broadcast rights. But he suggested they should expect it to be worth at least as much as AFL.

''This is a fantastic television sport. It is the leader,'' Smith said. ''Foxtel's pay television figure for NRL is up 20 per cent and then you look at State of Origin … just under 11 million viewers.

''It just demonstrates the NRL fan loves rugby league and loves it on television, which is very promising going forward for the media rights negotiations.

''We actually haven't come up with a dollar figure at this stage because we are waiting for the new Independent Commission to be formed. When that happens, we will have a discussion with the commission and give them some views of value.''

Smith also revealed that he and the NRL had been working on adding value to the broadcast rights by finding opportunities during breaks in play that television networks can sell for advertisements.


Read more: http://www.smh.com.au/rugby-league/...rights-deal-20110721-1hr0i.html#ixzz1SuaIomnJ

 

[VAI]

How the NRL can cash in on TV

NRL matches could be worth an extra $70 million a year to free-to-air broadcasters by using existing stoppages in play as advertising opportunities.

The estimated windfall is detailed in a proposal from NRL Stats chief executive Andrew Moufarrige, who has looked at the amount of time lost in matches due to stoppages for scrums, goal-line dropouts and conversions, and found that more than 10 minutes of extra game time could be found by simply stopping the clock for 15 to 30 seconds each time to allow a television commercial.

The time-off might also appease fans who complain about time wasting due to such stoppages and trainers being constantly on the field as they would only be allowed to give players drinks during designated breaks.


Moufarrige has discussed the idea with a number of leading officials and coaches, who believe it would have little impact on the game itself while providing obvious benefits.

He also predicted such changes would encourage a bidding war between all the commercial free-to-air networks for matches, as even the lower-ranked games would have far greater advertising opportunities.

The issue has emerged as officials prepare to start negotiations for the next television deal beginning in 2013 once the independent commission is formally in place, with Channel Nine boss David Gyngell saying this week that the league needed to create more opportunities for commercial breaks to have any chance of matching AFL's recent $1.2 billion broadcast deal.

Under his proposal, Moufarrige said State of Origin games could be worth an additional $3 million each, and a regular season NRL match up to $300,000.

''Remember, we have got MasterChef, [Australian] Idol, Oprah and Seinfeld all rolled into one,'' Moufarrige said. ''The grand final and State of Origin is like having four Super Bowls. Advertisers would pay a premium for commercial slots in those games, and people would watch them because the ads would be so good.

''NRL is the No.1 TV product. It has seven of the top 10 programs on free-to-air and 72 of the top 100 on pay TV. Also, NRL is the No.1 TV product in 16 of the 20 key TV markets in Australia and New Zealand. AFL only wins in Melbourne, Adelaide and Perth.

''AFL is a longer game, and there are advertising opportunities after every goal. But we can add an extra $70 million in ad revenue for NRL games with some small changes to breaks and restarts that give everyone consistency.''

Under Moufarrige's proposal, each half would be played over 50 minutes of real time that included stoppages for scrums, penalties, tries, restarts and video referee rulings. The players would have to be ready to resume play after the 15- or 30-second break for each stoppage or risk a penalty.

He also suggested introducing a two-minute drinks break after 25 minutes when interchanges could be made. ''That would divide the game into 25 minute packets of content which are more suitable for mobile and broadband providers,'' he said. ''What we want is to get all the free-to-air broadcasters and Telstra competing with Fox Sports.

''Games one to four will rate and pay for themselves on free-to-air without these changes but with them they could be worth up to $300K extra per game. The bonus is that games five to eight would now become valuable on free-to-air with even 300,000 to 500,000 viewers, as there is now 10 to 15 minutes ad time set over two hours.''

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Read more: http://www.smh.com.au/rugby-league/...sh-in-on-tv-20110722-1hsrq.html#ixzz1SuahAqT6

 

[VAI]

Ads won't interfere with games: Gallop

NRL chief executive David Gallop vowed not to disrupt the very fabric of the game in a bid to squeeze more advertising opportunities into the broadcast of games.

Reacting to assertions from Nine Network boss David Gyngell that rugby league had to introduce more mandatory breaks if it was to maximise its commercial appeal, Gallop admitted NRL officials were investigating how to manipulate natural stoppages during the games.

With the NRL trying to match the $1.2 billion pocketed by the AFL in its recently-negotiated broadcasting deal, Gyngell claimed the AFL was more ad-friendly with regular breaks following each goal.

But while Gyngell claimed the time taken at scrums and line drop-outs could be extended to incorporate advertising space, Gallop said it was vital that it did not interfere with the game.

"We're being really careful to only look at breaks in play that don't affect the attrition and the fatigue factor of the game because that's an important element of rugby league," Gallop said.

"There are some options where we can extend the ability of the game to have ads actually in play.

"Those things have been looked at by the football departments of various clubs through the season structure committee, so I would expect we will see some of those things come in."

http://news.smh.com.au/breaking-news-sport/ads-wont-interfere-with-games-gallop-20110721-1hqoo.html

 

[kimlo]

I would love stoppage of the clock on scrums, tries, etc.

It's so annoying because there is so much lost game time due to those things and on the obvious plus side it offers a lot of value to the game from an advertise perspective so that's also a huge plus.

Not to sure on drink breaks at 25 minutes, that would sorta kill the momentum of the game I think. If a team is on a roll, in the grand final with 15 minutes to go and they stop play for a drink break... I don't know, that wouldn't sit right with me.

If they did do that it would have to be 30-60 seconds at absolute most, any longer and the interchange should be reduced from 10 to 8 or even 6. And if they did do it, they should only stop for a drinks break during an interruption such as a knock on or something, not stop it during play.

 

[kimlo]

I think a great benefit of all of this that hasn't been mentioned is that TV stations are MUCH more likely to play all games life if they can still include a fair amount of ads where as now if they play a game live they lose a LOT of ad opportunities.

 

[VAI]

TV bosses baulk at $1.4b for NRL rights

THE NRL's dream of a $1.4 billion windfall from the next TV rights deal is unlikely to become a reality, with broadcasters baulking at the exorbitant asking price.

It is understood Channel Nine powerbrokers were astonished after the astronomical figure emerged from the NRL CEOs' and chairmen's conference on Thursday. While negotiations won't start until the independent commission is officially handed control, the jockeying between prospective broadcasters and the NRL has clearly begun.

League officials are hopeful their sport can surpass the $1.253b windfall the AFL secured from its pay- and free-to-air television contracts.

Media consultant Colin Smith presented club chairmen and chief executives with three estimates - worth $1b, $1.2b and $1.4b - on the value of a five-year deal during a briefing. Regardless of the outcome, increases in club grants and the salary cap are expected. Currently, 37 per cent of revenue is directed through to club grants, the same figure as the AFL. ''We obviously took into account the AFL's result and our game's current position in ratings and we felt it was important the clubs looked at a range of assumptions,'' NRL chief executive David Gallop said yesterday. ''There is no doubt the game is producing a ratings result both on free-to-air and pay television that is making people sit up and take notice. We are entitled to be confident about how that will convert into dollars.''

Gallop has previously floated the prospect of splitting the rights between the commercial networks if Foxtel isn't prepared to pay top dollar to retain its coverage. However, with the chief broadcaster likely to again snare the rights to the marquee Friday and Sunday afternoon games, it's unlikely Seven, Nine or Ten would shell out big bucks for the ''last-choice'' offerings, such as the Saturday night fixtures currently screened on Fox Sports.



Read more: http://www.smh.com.au/rugby-league/...-nrl-rights-20110723-1hu64.html#ixzz1SyVYxo7n

 

[chris_e_fresh]

I think it will be the same as the afl deal foxtel will get veery game live and free to air will get four games on there networks

 

[Paint.]

tbh, I wouldnt mind breaks during games. Whenever there's a stoppage, regardless of whether they have an ad break or not, stop the clock. If a scrum is being formed, or a try's just been scored, or something, just show ONE ad, you'd get more than you currently do with the odd 5-ad break every 15 mins...
It also wouldnt slow the game down too much, one ad isnt too long, prob just around 20-30 secs

 

[Parra_Power]

tbh, I wouldnt mind breaks during games. Whenever there's a stoppage, regardless of whether they have an ad break or not, stop the clock. If a scrum is being formed, or a try's just been scored, or something, just show ONE ad, you'd get more than you currently do with the odd 5-ad break every 15 mins...
It also wouldnt slow the game down too much, one ad isnt too long, prob just around 20-30 secs

I'm not a fan of ads period... Hardly see the need to boil away more time from game and all were going to receive is an earful from some ass wipe from the TAB or Centrebet...