Henry Tajer, Global CEO and executive chairman for IPG Mediabrands Australia, is calling on the industry to take a stand against the rising costs of sports rights, warning the room at the 2015 Media Summit that, TV networks could “blow themselves up” if they keep being gouged over the costs of sports rights.
Both major codes in Australia, the NRL and the AFL’s rights are currently out in market and estimates point to the fact that rights for the individual codes could go upwards of one billion dollars each.
Speaking on The Big Picture panel at today's AdNews Media Summit, global CEO and executive chairman of IPG Mediabrands Henry Tajer, said: “Sport costs are making it pretty difficult for independent content creation and independent content production, because the market’s just not big enough,” he said.
Tajer explained that the costs of sports rights is also an issue because there comes a point when the TV network has to pass on the costs to agencies and then it becomes difficult for the agencies to get sponsors and advertisers on board.
“[Sports rights] are going to blow the market up because costs are going to get too high, it has big implications…It could actually break the industry to the point where broadcasters can’t afford to carry sport and Australian sport lovers won’t be able to get sport on television or through whatever device they want.
“As an industry we need to take a stand, the networks could blow themselves up because of the pricing and bidding of sport. I think that’s a really important issue.”
Tajer was speaking on a panel along with Justin Diddams, director, media and telecoms for Citi Research, Mark Fennessy, CEO of Shine Australia, Neil Ackland, CEO of Sound Alliance, Anthony Fitzgerald, CEO of Multi Channel Network and Tony Davis, director for Quantium.
Fennessy added to Tajer’s point explaining that while the costs of sport are high, when a network invests in them they tend to create a halo effect for the whole network, hence making them so valuable.
“Certain sports, they may only break even, but it’s a case of how else they benefit the schedule. There’s a sense of almost a justification for overpaying,” Fennessy said.
Telstra currently has exclusive access to digital sporting rights for the NRL and AFL, and now Telstra has further bolstered its sports offering, by now allowing users under its new Go Mobile plan, to pick up either 12 months free access to NRL and AFL streaming, or six months of free access to subscription-video-on-demand (SVOD) platform Presto.
Speaking as a key note at the Media Summit Telstra’s group managing director for media and marketing, Joe Pollard, said while sport was a big driver for the telco, she said there was a limit as to what the business would pay for rights.
“There needs to be a mutually beneficial relationship between the rights holder and the rights exploiter.”
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