Analysts at investment banks are generally upbeat about Nine’s new deal with the NRL for broadcast rights to rugby league.
Nine and Foxtel have made substantial savings in a new broadcast rights deal with the NRL as rugby league games resume with rules in place to meet coronavirus restrictions.
By how much the NRL’s fees have been cut in the revised contracts isn’t clear but it runs into tens of millions of dollars. The financial details of the deal are “commercial in confidence”.
Analysts at Credit Suisse say the savings for Nine in the 2020 calendar year amount to about $66 million.
The revised agreement with the NRL covers the remainder of the existing rights deal, out to 2022. Foxtel extended its deal to the end of 2027.
Nine expects to see a benefit of $27.5 million a year for the financial years 2021 and 2022.
“We note that under the new arrangement, Nine will no longer show a Saturday night game in 2020, but we would expect that to have a limited revenue impact in the current environment,” writes Credit Suisse in a note to clients.
UBS says the financial impact for Nine this financial year, which only has to the end of June to run, will be minor.
The investment bank says its forecasts show Nine achieving its free-to-air cost cutting target of $150 million over three years.
Analysts at Macquarie say Nine is in a good position.
“Nine remains well positioned as ad markets recover given cost-out programs, growth from digital assets, and (the ACCC’s) digital platforms review,” they write.
Foxtel will broadcast eight games a week. Nine will have three matches, plus an exclusive on the grand final in October and the State of Origin series.
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