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Thread: Rugby Australia broadcast deal report reveals $15 million black hole

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    Rugby Australia broadcast deal report reveals $15 million black hole

    ugby Australia is on its knees after an alarming report revealed the desperate state of the game’s broadcast deal negotiations.

    Having put together an on-the-run one-season deal with Fox Sports to broadcast the Super Rugby Australia season this year, Rugby Australia is staring at the bleak reality of a further reduction in the game’s value to potential broadcast partners.

    According to an exclusive report in The Australian, Rugby Australia is facing a confronting future with a domestic rugby competition now likely to be worth no more than $10 million per season.

    The NRL’s previous broadcast deal with Channel 9 and Foxtel before chairman Peter V’landys renegotiated an extension during the coronavirus-forced season suspension earlier this year was worth $360 million per year.

    The grim outlook for the 15-a-side game means the sport is facing a broadcast deal worth just $20 million per year with Wallabies Test matches reported to be worth a further $10 million per year.

    The estimated value is reported to be worth $15 million per year less than the original $35 million per year offer reportedly tabled by Foxtel to former Rugby Australia chief executive Raelene Castle in November.

    Castle is reported to have knocked back the five-year, $125 million offer from Foxtel in the hope of manipulating a bidding war with other broadcast partners. The gamble has blown up in the code’s face.

    Optus was speculated to be interested in joining the negotiations, but the telecommunications company denied having any interest.

    It was only 12 months ago that the code was playing out the final year of a $285 million broadcast deal with Foxtel and Channel 10, worth $57 million per year.

    It leaves the new Rugby Australia board, led by new chairman Hamish McLennan, facing an impossible task — especially after the game announced a budget deficit of $9.4 million in June.

    According to the Sydney Morning Herald, Rugby Australia is now considering three competition structures for the 2021 season — with one of the options being the complete dismantling of the Super Rugby concept.

    The code appears to be nowhere near reaching a resolution with the New Zealand Rugby Union over talks surrounding a Trans Tasman Super Rugby competition for the 2021 season and beyond.

    The report claims Rugby Australia is even considering offering the NZRU a larger share of any private investment funds that would result from a re-formatted Trans Tasman competition.

    https://www.news.com.au/sport/rugby/...d5889fb18e9bb9

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    Quote Originally Posted by jargan83 View Post
    The estimated value is reported to be worth $15 million per year less than the original $35 million per year offer reportedly tabled by Foxtel to former Rugby Australia chief executive Raelene Castle in November.
    Yep, we know RA are bust going forward.

    However, the pre-COVID "reported to be" offer numbers have no relevance now.

    Even NZR's great signed deal will have to be renegotiated. NZR also took a stake in the pay TV operator Sky over there which has cost them big big money.

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    Another piece on this story from the same Mudoch stable (also interesting that it does indicate Kayo counting for around 30% of Fox rugby viewers).

    Rugby broadcast deal worth $10m a year, after Raelene Castle rejected $125m offer

    JESSICA HALLORAN
    JULY 15, 2020

    The tough financial reality for Rugby Australia is that their next broadcast deal is likely to be worth no more than $10m a year for its domestic competition.

    All up, a deal could be valued at $20m adding in $10m for Test matches. If RA secures a broadcast deal like this, it is $15m a year less than the deal offered by Foxtel to the Raelene Castle-led administration last November.

    Back then a five-year $US125m deal was tabled and RA walked away in the hope of starting a bidding war. It never materialised.

    Clarke told The Australian he is working towards presenting a competition model with some “new assets” — possibly a “State of Union” series (like State of Origin) and an Anzac Day Bledisloe Cup — which he is hoping will generate additional TV broadcast interest and value.

    He said there are parties outside of Foxtel who are interested in the broadcast rights but would not disclose them.

    “My job is to do the best deal for the game and it’s incumbent upon me to pursue all potential partnerships that could lead to the best outcome for the game,” Clarke said.

    The TV ratings for Super Rugby AU have been paltry with 69,000 viewers tuning in to the NSW v Queensland season opener (but 95,000 inclusive of Kayo and Foxtel Now). When rugby was humming, a match like that could draw 175,000 sets of eyeballs on Foxtel. The 2011 Super Rugby final won by Queensland over the Crusaders broke records when it reached 518,000 on Foxtel.

    Today, in an effort to revive the sport, there are three competition models being considered by RA management for season 2021 and beyond.

    “In the COVID environment with the restrictions and challenges being presented to us, it is critical we explore all avenues for competition structures, because that will help to establish a solid and profitable foundation for the future,” Clarke said.

    “To that end, we have looked at a potential dismantling of the entire Super Rugby structure and going back to first principles.

    “We have looked at different iterations around a domestic competition with an international crossover element. We are looking at the trans-Tasman competition as a foundation for expansion into the Asian Pacific. And a number of other iterations that involve new directions.

    “The determining factors are not necessarily straightforward, they are influenced by existing SANZAAR partnerships, potential broadcast revenue and the ability to ensure whatever we do builds towards a sustainable and successful Wallabies program.”

    Clarke stressed that the Wallabies were the jewels in the crown for Australian rugby. He is also keen to explore the option of boosting club rugby, noting competitions such as the National Rugby Championship failed to spark the tribalism among fans.

    “If you went back to first principles in an ideal world, you would build on existing brands … that have reach and deep history. You would be mad not to build on those,” he said.

    “The learning through the NRC and the ARC before that, it’s difficult to build fan tribalism with concocted teams. It would be great to have a competition where we liberate the top club rugby teams in the country and bring them into a competition where we are getting the best of the amateur game on show.

    “If we can create a financially stable model here, it doesn’t preclude us still doing the club model and elevating that at the same time as a new model for Super Rugby … It’s is not an either or, it’s an and, and to do that, we really need to bring significant investment in the game.”

    https://www.theaustralian.com.au/spo...ceeda58156bdcb

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    Given the attitude of the Kiwis, the state of finances and the gloomy outlook for a Covid-19 vaccine, maybe RA should take the offer and go it alone in 2021. Push for a renegotiation clause post-covid. If players head off, so be it. Cut costs, but llocate more to development and re-focus on Asia Pacific.
    It looks to me that the Kiwi view is a mixture of chips on shoulders over perceived and actual past grievances and hubris. A mole hill masquerading as a mountain.
    Maybe the outcome depends on accomodating the wishes of any "white knights" who are interested in boosting Rugby in Australia.

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    Either someone's maths is rubbish, or they don't understand exchange rates. Five-year, $125 million is not $35m a year, unless they are switching backward and forwards between US$ and $A. But all of these contracts are in $US, so the two deals don't sound much different. Certainly less different than I would have though for a handful of games played locally v 100+ game played involving some of the best teams in the world.

    $20M is about all foxtel has ever paid. It is all they paid last time. The big difference was international rights, which don't seem to have cracked a mention.

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    The enormous interest for a broadcast deal with RA.


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