Rugby League Scores $1 Billion Australian TV Rights Deal

Oz Rugby League - H 2012

UPDATED: The Nine Network Australia and Fox Sports jointly bid for the rights, which led to the second-largest sports deal in Australian TV history.

SYDNEY - The Australian Rugby League Commission has secured the second-largest broadcast rights deal in Australian TV history, with incumbent broadcasters  Nine Network and pay TV outfit Fox Sports jointly agreeing to pay over AUS$1 billion ($961 million) for a new five-year contract.

Under the agreement, Nine and Fox Sports, part of Rupert Murdoch's News Corp., will pay the ARLC a cash component of $925 million ($890 million), and provide advertising packages valued at $100m ($96.1 million).

The rugby league agreement falls just shy of the AUS$1.25 billion ($1.2 billion) TV rights deal struck last year between the Australian Football League (AFL) and the Seven Network and Fox Sports.

The deal gives both Nine and Fox Sports access to the domestic National Rugby League (NRL) competition, the so-called State Of Origin three game series between state teams - one of the top-rated sports events on television each year, national test matches between Australia and New Zealand and a range of other games.

Meanwhile News Ltd's proposed acquisition of the 50 percent of Fox Sports that it doesn’t own, from James Packer’s Consolidated Media, is set to move forward, after the latter said that it expects to complete the deal in six weeks once due diligence and approval from the government’s Foreign Investment Review Board is granted.  

Anti-trust regulator the Australian Competition and Consumer Commission (ACCC) last month approved the deal.

News Ltd, the local arm of News Corp., is seeking to acquire ConsMedia for $2 billion, which will lift its stake in the Foxtel pay TV platform from 25 percent to 50 percent, with telecom giant Telstra Corp. holding the rest, and 100 percent of Fox Sports.

As far as the ARLC deal goes, all three commercial free-to-air networks in Australia submitted bids for the rights.

But the deal does not yet include a New Zealand broadcaster, with at least one team from there currently playing in the NRL competition, nor does it include mobile and online rights. The AFLC will seek to monetize those rights separately.

Changes to the existing arrangements – which see Nine continue to broadcast three live games a week and Fox Sports airing five -  include Fox Sports adding a regular prime time Sunday night game to its schedule, while the Grand Final, the league's equivalent of the NFL's Super Bowl, will move to a Sunday night prime time slot on Nine. Nine will also experiment with broadcasting Thursday night matches on three occasions starting next season. The network also retains exclusivity over the State of Origin matches.

All matches on Fox Sports will be broadcast in high definition, with no ad breaks during play.

The Nine Network will start broadcasting its matches in high definition in 2014 once the digital TV switchover here is finalized. However, Nine will be able to broadcast different games in different markets. NRL’s heartland is in the most populous eastern states of New South Wales and Queensland, where Nine directly owns its stations.

And in an indication of how important ancillary digital rights are shaping up to be, the ARLC has agreed that Fox Sports can live stream its five live matches a week to tablets and over IPTV, building on the success that Fox Sports’ platform, Foxtel, had with the London Olympics. Foxtel  carried eight channels of Olympics coverage, and subscribers were able to live stream those channels to iPads and tablets at no extra charge. Nearly 10 percent of subscribers used the live stream app during the Olympics.

“The whole package is a simply fantastic result for Rugby League,” Australian Rugby League Commission chairman John Grant said.

Nine Entertainment co-CEO David Gyngell, who brokered the deal for subsidiary Nine Network, said: "We have certainly stepped up and paid as much money as we could. It is the greatest sport for television in the winter months and perfectly complements our cricket coverage. It is part of our heritage and a must-win for us, and I think the price was fair and reasonable."

Fox Sports CEO Patrick Delany said that the rights deal would be a win for viewers across the country. “This agreement secures a fabulous line-up of matches for Fox Sports subscribers," he said. "Super Saturday and Monday Night Football have become a way of life for Rugby League fans and Fox Sports is determined to make that experience more exciting and more interactive than ever before."

He added: “Rugby League is a part of Fox Sports and Foxtel’s DNA and we are delighted to be able to continue bringing the live action to households across Australia every week.”