Nine is paying more than $300 million, dislodging Seven West Media, to become the exclusive Olympics media company in Australia. Was the deal worth it?
The media group is admired by market analysts because its revenue is spread across media -- print, television, streaming media, radio, digital -- and types of revenue - advertising plus a growing subscription base.
This gives the business some protection. If one sector weakens, the others pick up the slack.
And now Nine has added the Olympics to NRL and Tennis Australia rights. All delivered to advertisers via total TV, total audio and total publishing.
Nine gets exclusive free and subscription audio-visual rights, and non-exclusive audio rights, to the Summer and Winter Olympic Games from 2024-2032. They will be broadcast on all platforms including 9Now, Stan, the 9Network, and talk radio stations 2GB, 3AW, 4BC and 6PR.
Full coverage will also be delivered across Nine’s suite of print and online publishing platforms: The Sydney Morning Herald, The Age, Brisbane Times, WA Today, The Australian Financial Review, and nine.com.au.
All with audiences media agencies can’t ignore.
Ben Willee, general manager and media director, Spinach: “This is undoubtedly the media manoeuvre of the year and perhaps even the decade.
“But it’s not all beer and skittles; clients and media buyers will need to get out the history books and look closely at what happens to the Olympics ratings when there’s a big gap in the time zone. The reverse is also true, and we’ll undoubtedly see a ratings bonanza when the event is in Brisbane.
“However you look at it, media companies are their own biggest clients, and this is an unparalleled opportunity to promote their own content across platforms.
“The virtuous cycle also extends from TV to radio (audio), streaming and digital video, creating a very powerful loop of ratings and addressability.”
Media analyst Steve Allen, Pearman's director of strategy and research: "For FTA TV, it is becoming far more difficult to achieve high rating, multi-day programming, which creates a platform from which to launch and cross promote regular programming.
"Olympics provides that. However, we think Nine have paid over the odds and will affect their bottom line in the future.
"Seven's reported unwillingness to bid up to Nine's offer is very telling in our view."
Was the price -- $305 million in cash, with a further $10 million in contra -- paid by Nine right?
CEO Mike Sneesby: “We always take a very disciplined approach to the acquisition of rights.
“And one of the things that stands in great stead is that the breadth of our platforms across Nine gives us a unique ability to monetise … we do have a competitive advantage when it comes to bidding on major sports rights like this.
“We're very comfortable with the amount we've paid; of course, you've seen us walk away from plenty of deals when they don't make sense.
“Clearly, the fact that we got there with the IOC (International Olympic Committee) means that this is a deal that fits in the commercial envelope. And we're delighted to be able to announce it.”
Sneesby sees Nine’s relationships with sports, and their audiences, evolving over time.
With the Olympics, digital distribution is going to increase over time.
“What is very clear is that as part of important tentpole programming across any media business, sport has become increasingly important,” he says.
“It is a very strong driver of acquisition of audiences, whether you're in the free domain or the subscription domain.
“And it is a genre that just continues to retain audiences over the long term. So it will maintain itself as an important part of our overall programming over the long term and, of course, we'll look at that as as our world changes.
The commercialisation of the Olympics will be driven mainly by advertising dollars but that may change over time.
Sneesby: ”But we might look for complementary opportunities. Now, those aren't opportunities that are clearly laid out in front of us. But we may look for alternative opportunities as well.”
Changes in audience behaviours are happening fast. With sport and reality television, such as Married at First Sight, streaming, rather than linear television, is increasingly important.
“Quite clearly, we're seeing a change in consumer behaviour that doesn't surprise any of us,” says Sneesby.
“By the time we get to the Paris games, there'll be more people streaming than ever before.
“And Nine is in a really unique position to be able to distribute live content like this right across its platforms.
“It is a broad set of (Olympic) rights that we have, which will give us the ability to distribute, not just on free-to-air television, not just online now, but on Stan, our audio network and broadcast and streaming and even our digital publishing platform.
“There's plenty of work ahead of us now that we've finalised the deal on putting the details together for Paris and subsequent Olympic games.
“But we're extremely confident in the opportunity to distribute that Aussies will get to see the Olympic Games from Nine in a way that they just haven't seen before.”
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