Media investment chiefs deliver their verdict on sports rights overhaul

Arvind Hickman
By Arvind Hickman | 16 April 2018

Foxtel has emerged from the recent sports rights negotiations as the biggest winner, Nine and Seven have both done relatively well for different reasons, while Ten has lost its only summer platform to promote its schedule.

That’s the verdict of media investment bosses in the wake of the largest sports broadcasting overhaul in a generation.

Dentsu Aegis Network ANZ chief executive Simon Ryan tells AdNews he believes Nine will be happy it picked up the tennis where its production costs will be ‘front-ended rather than back-ended’, which gives the network an opportunity to do other things.

 “It’s good there’s a bit of a reshuffle of the sporting agenda. It doesn’t happen often,” Ryan says.

“I think Nine will have a good strong lead in to the year with tennis. They’ve got some ability to set some costs in the back quarter as a result of the cricket [moving to Seven].

“On the flip side with the cricket moving to Seven, they have a very powerful opportunity with the cricket and AFL together now. It’s heavy cost but big audience opportunity.

“How they commercialise that to clients is going to be key.

Ryan believes the best way for Seven to commercialise cricket is sell multi-sports packages between cricket and AFL rather than just focusing on individual codes.

“They’re going to have to work out ways to regain what is a heavy cost outlay and they’re really only going to be able to do that if they package it up to large clients and having strong consistent audiences through sport,” he said.

“I believe they should work had on a sport-related entity and package things up and make it efficient for clients to buy into sport. Look at the cross-sell opportunity across sport each year now.”

He believes one problem Seven will have is that they didn’t acquire the digital rights to the sport.

“I think when it comes to rights management, you want to try and own the ability to have it across TV and digital – cross-audience opportunities for large clients,” he said. “I don’t agree with splitting some rights between digital and mainstream. It’s better you sell it holistically and an end-to-end audience solution for clients.”

Networks need the 'full kit and kaboodle' 

Omnicom Media Group boss Peter Horgan also believes that streaming rights are a missed opportunity.

“Unless you've got the whole thing, including the digital rights and the full kit and kaboodle, it's tough to make money,” Horgan said.

“The market will only bear so much and you've got to view [sports media rights] as a strategic investment.

Horgan said Seven's ability to promote their schedule during the Australian Open has been a real feature of their success over the past decade.

“Cricket doesn't quite give you the same focus there because of the timing. You need a vehicle to be get people excited about your following year properties. Outside of that viewing is a bit of a wasteland in the summer,” he added.

Horgan believes that simulcasting cricket on FTA and Pay TV “just dilutes your audience”, “confuses viewers” and “erodes commercial leverage”.

He says that although there is scope to freshen up the coverage, a point that was alluded to by Seven boss Tim Worner on Friday, he warned against “a radical reinvention [because] it does carry a lot of risk”.

His comments refer to changing up Nine’s cricket commentary team which had become a part of Australian summers and is popular with older test cricket supporters.

Foxtel wins, Ten loses

Nunn Media Sydney managing director Chris Walton believes the major winner to emerge from the negotiating table is Foxtel, assuming all of the economics around the bids stack up.

“Assuming it’s not a case of do whatever it takes and worry about it later’, you’d have to say that Foxtel are the biggest winner,” he tells AdNews.

“What I’m interested to see is how it pans out is for Foxtel’s digital rights. Although there’s a lot of talk about their 30% subscription penetration, it’s less about that and more about the test streaming package.

“You won’t need to buy a Foxtel subscription for Foxtel to benefit – you could have the home tests of home one day internationals, or a test pass or season pass. Then there might be a Sydney Sixers pass or a Sydney derby pass.”

He believes that Seven will be happy they have something to fill their summer linear schedule, while the major loser is Ten.

“Nine has taken a very measured approach throughout this and you’ve got to say they would have it at the right price, rather than getting it any price,” Walton adds.

“But Ten clearly wanted it and, if you believe the AFR, thought they had it. It’s no surprise they’ve been on the all agencies communications this morning highlighting how they’ve been getting so many of the top non-sport rating shows.”

Meanwhile, PHD Australia chief executive Mark Coad, a more than handy cricketer, believes Ten and Nine will feel let down by losing a sport they invested heavily in to build.

“I would imagine Ten feel as though they've lost out to a deal that they helped build value for and demand of having invested heavily in BBL and assisted its growth,” Coad says.

“Nine have a very long history with cricket and I’m sure would hold a similar view being synonymous with the sport for so many years.”

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