Industry sources familiar with the discussions previously said Nine, owners of this masthead, is offering $30 million in cash and free advertising to broadcast one Super Rugby match a week on free-to-air television as well as Wallabies Tests and the Rugby Championship. All other Super Rugby games would be broadcast live behind a paywall on subscription streaming service Stan.
Foxtel also bid for Super Rugby, Wallabies Tests and the Rugby Championship. Industry sources familiar with the talks said Foxtel had offered between $35 million-$40 million but some Foxtel sources have since indicated they offered less than $35 million.
Former Rugby Australia boss Raelene Castle, who was eager to get more free-to-air coverage for the sport to grow its audience, said in January that any deal was not just about price.
“The number is obviously crucial and that’s how all sports survive in the professional era,” Castle said at the time. “The second thing is access, so how can we expose Super Rugby more readily to more people more often. Thirdly … the commercial support across the whole sport that the broadcasters are prepared to engage in.”
RA has struggled to grow the game due to a lack of exposure and poor recent performances by the Wallabies. All Super Rugby games are broadcast on Foxtel and subscription streaming service Kayo, making it difficult for the governing body to reach new fans.
Global Media and Sports boss Colin Smith said rugby union risks eroding its audiences if it cannot get more people attending matches through a new broadcast deal.
‘The only problem with more of the same [is it’s] going to continue the downward trajectory.’
Global Media and Sports boss Colin Smith
“The only problem with more of the same [is it’s] going to continue the downward trajectory,” Smith said. “Back in 2004, the average audience for Super Rugby was probably six or seven times greater than it is today. You can’t just bank your dollars because if you bank your dollars and don’t make major changes, then it could continue to erode. Rugby has to recreate itself and build a long-term position.”
Bould said one concern for the RA Board to change partners could be the ramifications of walking away from Foxtel. Foxtel’s major shareholder, News Corp Australia, owns mastheads such as The Australian, The Daily Telegraph and The Herald Sun. Bould said sports have historically been reluctant to walk from Foxtel because it risks walking away from coverage that appears in the mastheads.
“There’s a very powerful channel to market that News Corp offers,” he said. However, he argued reach would also help RA increase its revenue in the long term.
“Having the content in front of as many people as possible is going to become even more important,” he said. “They’re going to need to maximise sponsorship dollars and they’re going to need to maximise what the fans are paying whether that be for memberships or whether they buy shirts.”
But any deal won’t just have implications for rugby union. The potential introduction of Nine’s sports streaming service Stan to live sports broadcasting could have long-term implications for future rights negotiations. Traditionally, Foxtel was the only major pay-TV operator that could offer a subscription-focused model for sport. Optus has since entered the sports broadcasting space and the inclusion of Stan would increase competition.
“It adds more competitive tension because, all of a sudden, it’s saying that subscription doesn’t doesn’t necessarily have to be driven by the telcos or by Foxtel,” Smith said. “It’s a really material change for Stan and frankly for Nine that, all of a sudden, changes the competitive dynamics of Australian sport and frankly international sport.”
Media analyst Brian Han said any content that can differentiate Stan, subject to the amount paid for it, would increase its value. “A niche sports content such as rugby would fit that bill, not to mention the cross-promotional benefits and AB-demo exposure Stan would get, if key matches are also broadcast on Nine free-to-air,” he said.
“As for what it means for future sports rights negotiations, it’s unlikely any free-to-air network would ever consider paying for any sports rights if the digital/streaming rights are not included.”
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Zoe Samios is a media and telecommunications reporter at The Sydney Morning Herald and The Age.