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”.
The broadcasters argued that they wouldn’t be getting the same benefit from a shortened season and therefore should not have to pay previously agreed fees.
The NRL is happy to get the support, which includes a five-year partnership with Foxtel, to resume the 2020 NRL Telstra Premiership.
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.
ARLC (Australian Rugby League Commission ) chairman Peter V'landys thanked Foxtel CEO Patrick Delany and Nine CEO Hugh Marks for reaching an outcome that puts the fans and the game's future first.
“Our negotiations were tough but always in a spirit of goodwill and shared ambitions for the betterment of rugby league,” says V'landys .
“We could not have reached our May 28 restart ambitions without the teamwork and collaboration of our partners.”
Foxtel's Delany says the deal is a great outcome for footy, for fans and for players.
“It’s also a hugely important signal to everyone in Australia, and around the world, that we will get through these times, and we can keep players and coaching staff safe while we all enjoy the game,” he says.
“The agreement between Foxtel and the NRL extends our existing broadcast rights for a further five years and cements our position as the Home of NRL until 2027.”
Foxtel this week announced the addition of Ladbrokes, TAB and eBay to join the lineup of NRL advertisers.
Mark Frain, Foxtel Media CEO, says 683,000 people tuned in to watch the Eels triumph against the Broncos.
"What a record breaking night for Foxtel and Foxtel Media," he says.
"With the NRL rights now secured we are excited to be offering an unprecedented depth of coverage for audiences on Foxtel, and of course to be offering the best platform for advertisers to connect with footy fans. As the home of NRL til 2027, there is no better place to reach sports audiences than Foxtel."
The savings are substantial for Nine. According to a statement lodged with the ASX, Nine expects a benefit, resulting from changes in rights fee and associated production and services arrangements, of about $27.5 million each year in the 2021 and 2022 financial years.
But the biggest saving is this financial year which closes at the end of June. Nine’s calculations indicate that its total savings, calculated previously at $130 million if the rugby season didn’t restart, will be around $66 million.
This is the difference between the previous cash cost out guidance of $289 million and the new one at $225 million. How much of this is the actual cash paid to the NRL, and how much is reduced production costs, hasn’t been revealed.
Nine's Marks says the deal is an excellent long-term outcome for both the company and the game of rugby league.
“Completion of season 2020 will enable the continuity of the code from a game, supporters’ and sponsors’ perspective,” he says.
“We are also delighted to have reached a revised agreement with the NRL for seasons 2021 and 2022, and at a level of rights costs that enables us to sustainably invest in rugby league for the future. Nine is pleased to be continuing its partnership with rugby league."
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