Renewal of National Rugby League (NRL) broadcast rights due to expire at the end of the 2027 season is a big risk point for Nine Entertainment.
Media Analysts Brian Han warns that it’s a depressed market and the media sector in general can’t handle a big jump in price.
“There will be plenty of digital ink spilt on speculation and negotiation-through-media tactics,” Han writes in a note to clients.
“And given the personnel behind the NRL and the introduction of an 18th team from Perth in 2027 and another one from Papua New Guinea in 2028, we know the asking price will be astronomical.”
Australian Rugby League Commission chairman Peter V’landys clearly wants more this time round during fee negotiations.
Nine and Foxtel paid $1.7 billion for the rights which expire in 2027.
“We will take the rights elsewhere,” V’landys said late last year. “If they think they can behave as monopolists, they will be in for a shock.”
The NRL is eyeing the $4.5 billion signed by the AFL with Seven network and Foxtel in September 2022.
The current annual fee for the NRL rights is $115 million cash plus $15 million of contra and other services.
Han says there is no arguing that the NRL is a marquee, winter live sports franchise for Nine.
However, he said the current depressed market value and agitated shareholder base cannot tolerate an exorbitant jump in rights costs.
“Nine's two free-to-air TV competitors are even less able to afford the rights,” he said.
“The antisiphoning rules are there to be leveraged against the NRL.
“And the days of justifying big increases in rights cost on tenuous concepts such as ‘promotional platform,’ ‘lead-in, lead-out’ scheduling benefits and ‘halo’ impact on the network are over, certainly in this age of on-demand streaming and bite-sized consumption of entertainment.”
Nine reported a lift in profit in the half year to December, in a business now without real estate classifieds business Domain.
Net profit after tax before specific Items was up 30% to $95 million. Revenue was $1.14 billion, down 5%.
Total television revenue was down 14% to $508.2 million, impacted by comparison to last year’s broadcast of the Paris Olympics.
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