TV upstarts drive up costs of sports programming

[travelling_gerry]

TV upstarts drive up costs of sports programming

• James Chessell
• From: The Australian
• January 24, 2010 9:00PM

BOOST TO COFFERS: A new broadcast deal could boost rugby union coffers by $100m. Picture: Sam Ruttyn Source: PerthNow



COMPETITION from digital and internet television is helping drive up the cost of sports programming for existing players, with the price of local rights to rugby union and English soccer rising significantly this year.

Rugby union's SANZAR is understood to be preparing to announce an improved broadcast deal with News Corporation and South African pay-TV group Supersport, while the Australian rights to broadcast English Premier League matches have almost doubled.
SANZAR -- the South African, Australian and New Zealand body that operates the new Super 15 and Tri Nations competitions -- is believed to have negotiated an increase of 30-40 per cent for the 2011-15 broadcast rights, although the parties are yet to formally sign the deal.
The new arrangement could boost rugby coffers by $US100 million ($110m) or more above the previous $US323m, five-year deal struck with News, publisher of The Australian, and Supersport.


While the headline number is likely to be portrayed as a boon for the code in the southern hemisphere, the increase partly reflects the relative strength of the Australian dollar and a greater number of games when the expanded Super 15 competition begins next year with the addition of a Melbourne franchise.
SANZAR plans to split the Super 15 into three conferences -- with five teams in Australia, five in South Africa and five in New Zealand. Each team will play the other four in their conference twice and the other 10 teams once. This means more than 30 per cent extra games and additional domestic content in local time zones for TV networks. At least one team from each country should also make the semi-finals.
News broadcasts rugby on pay-TV through Fox Sports in Australia and Sky in New Zealand. Supersport covers South Africa. The Seven Network shows internationals involving Australia played in Australia.
The deal comes at a critical time for major sporting codes with Australian Football League television rights to set to expire next year and National Ruby League rights in 2012. Both codes are aiming for $1 billion-plus deals with free-to-air networks, which are likely to on-sell some games to Fox.
The growing importance of internet protocol television and video-on-demand means online and mobile rights will play a more prominent role this time. The Seven, Nine and Ten networks also want content for their digital channels, although their ability to broadcast sport on the new channels will depend on what changes -- if any -- the federal government will make this year to the "anti-siphoning" of sports that are available to free-to-air television.
It is believed Communications Minister Stephen Conroy views sport as a key means of driving the take-up of digital television before the switchover from analog is completed in 2013.
It is believed Fox Sports faced strong competition in November during an auction for the rights to broadcast the English Premier League football on television from 2010-13.
Industry sources said Fox Sports, which is 50 per cent owned by News and 50 per cent owned by Consolidated Media Group, paid almost double the previous $14m contract due to strong competition from US sports broadcaster ESPN, Irish group Setanta Sports, SBS, Ten Network, and an offshore internet TV group.
EPL is considered a bellwether for the sports rights market.
Traditional media companies often bid for so-called new media rights to avoid their audiences being eroded by other platforms.
The government's proposed national broadband network, which would offer high-speed internet capable of carrying live sport, is expected to increase this trend.
The launch of Ten's dedicated digital sports channel, One, in March last year has created more competition for mid-tier sports such as netball, which announced it had switched from pay-TV to One in late 2008.
A spokesman for News would not comment on the SANZAR negotiations. A spokesman for the Australian Rugby Union said the body would not be going into commercial details of negotiations until an announcement was made.
Rugby struggled to increase audiences and crowds last season, as many teams adopted a kicking game rather than the more crowd-pleasing running game.
It is believed the ARU was keen to include a free-to-air television operator in the latest rights deal to increase the sport's audience, as subscription television penetration sits at about 33 per cent of households.
This is considered highly unlikely because industry sources said the most likely bidder, Ten, was out of the running.
However, Ten does have the ability to negotiate to broadcast a small number of games once the rights deal is finalised.


http://www.perthnow.com.au/business/...-1225823231220

[antiussentiment]

it's hard not to have mixed feelings about this. i wonder how much of the extra money goes to clubs and players?

some years ago i heard someone say on a radio interview that the west indies cricket team was struggling for talent because USA basket ball scouts had been down there attracting all the top athletes away with more money than cricket could offer.