Rupert Murdoch has fired a huge salvo in the battle for the rugby league’s new media rights deal.
In June 2015 News Limited’s Australian subscription television arm, Foxtel put forward a proposal for a 15 percent stake, valued at $77 million, in struggling Australian terrestrial broadcaster the Ten Network. It is not a move that was undertaken lightly, in fact, Rupert Murdoch’s son Lachlan, now a non-executive director at News Corporation, spent four years on the broadcaster’s board after purchasing a stake from friend and businessman James Packer. While at Ten, Murdoch gained an intimate understanding of the broadcasters’ inner workings, giving News Corporation a solid understanding of the value of its purchase.
77 million reasons why Rupert Murdoch will finally own the NRL
Sports rights are hot property and the Murdoch manoeuvre is strategic, partly aimed at getting the prize that has eluded the family for the best part of twenty years – Australia’s National Rugby League competition. To some, the idea of Murdoch trying to take over rugby league may sound familiar – News Ltd waged a costly but beneficial war with the establishment body in the mid-1990s leading to a truce that led to News taking a half-share in controlling the sports’ premiere competition. Murdoch’s intervention gave News significant bargaining capability with respect to TV rights and the future direction of the game. It is that relationship which Murdoch will now seek to capitalise upon by buying into Ten.
You might argue that Foxtel already broadcasts 5 live games a week, that Murdoch’s Australian newspaper and online empire has pages of rugby league content and that the company has a major shareholding in the one of the competition’s biggest clubs, the Brisbane Broncos, so the tie up with Ten just adds to the stable of businesses involved with rugby league. But to say that ignores the reason why he so keenly took an interest in the game in the 1990s.
A recent article by Roy Masters suggests that preliminary discussions centre around current free to air rights holder, the Nine Network broadcasting three games a week, Ten broadcasting one game a week and the remaining five (or six, expansion pending) on Foxtel. To me, the proposition does not change the current arrangement – Murdoch interests would still only broadcast five exclusive games a week.
While this is just one of a number of permutations of the NRLs upcoming media rights deal, it makes for a compelling one for the NRL. A significant investment in a free to air vehicle such as Ten, whose only other seriously marketable sports property is the month-long Big Bash League Twenty20 cricket competition, would require the prospect of a significant return on investment for NewsW. Whether broadcasting, as Masters suggests, one NRL game a week on the free to air network can justify this additional investment is highly debatable. Even having Ten bid for the high rating, three match State of Origin series, apparently worth around $500m a year to the NRL, would not be enough to justify the huge investment alone.
As a result, it seems more likely that Murdoch interests may attempt to bid for the rights to the entire regular season competition, screening the the week’s biggest matches live on Ten during the highly rating Thursday night, Friday night and Sunday afternoon timeslots. Other games could then be screened on Fox Sports as a lure to additional subscribers or on-sold to another free to air network. This then provides News with significant value, providing additional revenue through exclusive online and newspaper content.
Whether the NRLs governing body, the Australian Rugby League Commission finds a bid from News Limited to broadcast the entire competition palatable given the company’s previous involvement with the game is debatable. What is clear though is that Rupert Murdoch wants back in, and this time may not settle for simply a slice of the pie.
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