The next Media rights deal (2023-?)

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Seedsfan

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Cricket will be targeted by 9, they will look to bring it back and then try for the pay rights when the deal with Fox expires

No way they have spent all this money to set up a sports broadcasting service, buying print media mastheads and radio stations to just go after the rugby.

Rugby is the test sport
 

Kwality

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Cricket will be targeted by 9, they will look to bring it back and then try for the pay rights when the deal with Fox expires

No way they have spent all this money to set up a sports broadcasting service, buying print media mastheads and radio stations to just go after the rugby.

Rugby is the test sport
Spot on, though the test is of the business model - can it generate the dollars for Nine to be a player for major sports.
 

Seedsfan

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Spot on, though the test is of the business model - can it generate the dollars for Nine to be a player for major sports.
I am hopeful it does work. Just so that there is some competition in the market. For too long smaller sports got bullied by Fox as they had nowhere else to go
 

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Kwality

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Kwality

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I understand that but market competition is a good thing for sport in Australia
No argument. The ground rules are evolving in the market, the way the product is consumed.
The Foxtel money was/is the AFLs biggest media dollar earner based on the PAY model & Foxtel have added Kayo at lower dollars. An interesting stratgy.
 
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The 747

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Yes but if u have people only buying access to their own teams games that's gonna result is much lower ratings and ad revenue for neutral games.
Ratings generate ad revenue for the broadcaster, the broadcaster pays the AFL a fee to show the sport in order to get ad revenue. The ad revenue only matters to the AFL in that higher ad revenue = higher broadcast rights. If the AFL is the broadcaster the ratings and ad revenue are irrelevant, they get their money direct from the consumer.

I ran some rough sums on this last year, the AFL would make a lot more money selling games direct on pay per view. And if they run ads (which they would) they would get the money direct from the advertiser.
 

Kwality

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Ratings generate ad revenue for the broadcaster, the broadcaster pays the AFL a fee to show the sport in order to get ad revenue. The ad revenue only matters to the AFL in that higher ad revenue = higher broadcast rights. If the AFL is the broadcaster the ratings and ad revenue are irrelevant, they get their money direct from the consumer.

I ran some rough sums on this last year, the AFL would make a lot more money selling games direct on pay per view. And if they run ads (which they would) they would get the money direct from the advertiser.
Did you factor in the costs of selling games direct?
 

Kwality

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7 arent leaving cricket alone:

Seven West Media remains “extremely dissatisfied” with Cricket Australia but will wait until after next month’s hearing in the Federal Court to determine whether it retains the rights to next summer’s Ashes series and Big Bash League.
The free-to-air network has two cases running concurrently against CA in its bid to score a discount on the $82 million it will pay this summer for the rights to its share of the international season and domestic Twenty20 matches.
Seven’s chief executive James Warburton told The Age and Sydney Morning Herald on Monday that his network would continue to fight for a reduction.

Seven and Cricket Australia remain at loggerheads over their deal.
“The processes haven’t changed and the expert is due to give a determination on the value of the rights for this season just gone in late February. That’s our right within the contract,” he said.

“I think as a network we’re extremely dissatisfied with Cricket Australia, with the administration
Seven West Media reportedly sent a legal letter on Friday asking for the arbitrator appointed to mediate its dispute with Cricket Australia (CA) be removed over a potential conflict of interest.'



Meanwhile it seems 7 & Foxtel have reached an agreement over the Kayo freemium offer to Supercars fans for the event from Mt Panorama at Bathurst the weekend after next.

'Motorsports organisation Supercars has renegotiated its broadcast deal with Seven West Media, averting a potential legal stoush over a move by Foxtel’s Kayo Sports to make some events free for viewers.

Industry sources who spoke on the condition of anonymity because the contract is confidential said Supercars had agreed to remove a requirement for Seven to generate a particular amount of money through sponsorship and advertising under a revenue sharing arrangement.'

'The renegotiation occurred after a legal letter was fired off to the Supercars by Seven over concerns that Foxtel’s decision to air popular races for free on its streaming service Kayo Sports was in breach of exclusivity provisions given to the free-to-air broadcaster in its new deal. The company also threatened to terminate its rights agreement.'




Please excuse my cock up trying to put two issues involving 7 together.
 

JohnZ

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Do you mean the production costs or the cost of the channel? Either way the outcome was conclusively in favour of AFL owning and selling it.
Ch10 and Amazon, maybe Apple (who have bought College Football) would all come to the table if production was done by the AFL. That alone would increase the net revenue to the AFL (the rights would need to increase to cover costs, but rights would increase more than costs due to in house production). NEP practically does it anyway, seems wasteful at this point to split production between two entities (FTA and Fox).

The EPL model could work (Premier League Productions). Can then package games both nationally and/or state by state
 

Seedsfan

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No argument. The ground rules are evolving in the market, the way the product is consumed.
The Foxtel money was/is the AFLs biggest media dollar earner based on the PAY model & Foxtel have added Kayo at lower dollars. An interesting stratgy.
But Foxtel has crippling overheads that hurt their ability to make money. That’s why they are launching Kayo as that greatly reduces their costs
 

Kwality

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But Foxtel has crippling overheads that hurt their ability to make money. That’s why they are launching Kayo as that greatly reduces their costs
How does Kayo reduce Foxtels costs?

sevens-warburton-on-stan-sport-kayos-airline-broadcast-wars-70m-of-olympics-advertising-and-the-google-deal-668567

“Stan Sport and Kayo remind me of the airline broadcast wars. You’ve got people with a billion dollars of sports rights offering them to Telstra customers for $5,” he says.

“You’ve got both who have been talking about inflationary sports rights, making bodies like the rugby union and the netball extremely happy in terms of forcing prices up.

“And they’re both selling packages, which no doubt will be in loss. How long and how sustainable will it be in their cases? [That’s] something that I find will be fascinating to watch.”
 

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Seedsfan

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How does Kayo reduce Foxtels costs?

sevens-warburton-on-stan-sport-kayos-airline-broadcast-wars-70m-of-olympics-advertising-and-the-google-deal-668567

“Stan Sport and Kayo remind me of the airline broadcast wars. You’ve got people with a billion dollars of sports rights offering them to Telstra customers for $5,” he says.

“You’ve got both who have been talking about inflationary sports rights, making bodies like the rugby union and the netball extremely happy in terms of forcing prices up.

“And they’re both selling packages, which no doubt will be in loss. How long and how sustainable will it be in their cases? [That’s] something that I find will be fascinating to watch.”
Because the cost of delivering the service is significantly cheaper then either the line rental they were paying or having to broadcast via satellites
 

Kwality

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Because the cost of delivering the service is significantly cheaper then either the line rental they were paying or having to broadcast via satellites
So not the overheads ok.

Delivering a lower cost service for a lower price is what the Kayo strategy is.
See what James Warburton said:
You’ve got people with a billion dollars of sports rights offering them to Telstra customers for $5,” he says.

“You’ve got both who have been talking about inflationary sports rights, making bodies like the rugby union and the netball extremely happy in terms of forcing prices up.

“And they’re both selling packages, which no doubt will be in loss. How long and how sustainable will it be in their cases? [That’s] something that I find will be fascinating to watch.”
Obviously 7 has skin in the game so there is a degree of self interest in his remarks.
 

Kwality

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Do you mean the production costs or the cost of the channel? Either way the outcome was conclusively in favour of AFL owning and selling it.
So who is going to handle the admin costs, the AFL or the clubs? Promotion, complaints ..... are you confident you have covered all costs, all scenarios?
Currently Fox toss in a NET $heaps, carry all the costs & risks, including selling the advertising.
 

The 747

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So who is going to handle the admin costs, the AFL or the clubs? Promotion, complaints ..... are you confident you have covered all costs, all scenarios?
Currently Fox toss in a NET $heaps, carry all the costs & risks, including selling the advertising.
No I didn't model it to that extent, I am confident that there is significantly more money in it for the AFL though. Not convinced there are many significant risks in broadcasting that cannot be transferred via insurance.
 

Kwality

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No I didn't model it to that extent, I am confident that there is significantly more money in it for the AFL though. Not convinced there are many significant risks in broadcasting that cannot be transferred via insurance.
Cash flow if its pay for view.
No doubt FOXtel has the data, do the AFL?
 

The_Wookie

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Ratings generate ad revenue for the broadcaster, the broadcaster pays the AFL a fee to show the sport in order to get ad revenue. The ad revenue only matters to the AFL in that higher ad revenue = higher broadcast rights. If the AFL is the broadcaster the ratings and ad revenue are irrelevant, they get their money direct from the consumer.

I ran some rough sums on this last year, the AFL would make a lot more money selling games direct on pay per view. And if they run ads (which they would) they would get the money direct from the advertiser.
The AFL doesnt want all the risk. Broadcasts contracts are money in the bank dor 5 or 6 years that they can count on.
 

Kwality

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Yep I completely agree.

And it would upset a lot of stakeholders with vested interests in the status quo.
It wouldnt surprise them though. The likes of AFL Commissioner Williams & Norths President Buckley have experience on both sides of the fence.
 

JohnZ

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status quo.
weak argument.

There's money in streaming that wasn't there when the deal was signed in 2016, let alone the 2011 deal either.

Amazon/Apple/Twitter/ViacomCBS don't want to run production, they want a finished product. Those are 4 companies with cash to stump up. Would be in the AFLs best interest to find out what they'd pay for a complete product.

The EPL outsources all international coverage to PLP so that they can sell a complete product to any backwater that wants EPL coverage. Local suppliers can take PLP commentary, analysis and pre/post-game or do their own in-house. Optus wouldn't have the EPL if it weren't for PLP.

NEP already does most of the leg work these days for AFL production, I could see SEN stepping in and taking over production with NEP as an intermediary allowing the streaming giants to put in a competitive bid with the AFL. Won't happen otherwise and it's just leaving good money on the table.
 

Kwality

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weak argument.

There's money in streaming that wasn't there when the deal was signed in 2016, let alone the 2011 deal either.

Amazon/Apple/Twitter/ViacomCBS don't want to run production, they want a finished product. Those are 4 companies with cash to stump up. Would be in the AFLs best interest to find out what they'd pay for a complete product.

The EPL outsources all international coverage to PLP so that they can sell a complete product to any backwater that wants EPL coverage. Local suppliers can take PLP commentary, analysis and pre/post-game or do their own in-house. Optus wouldn't have the EPL if it weren't for PLP.

NEP already does most of the leg work these days for AFL production, I could see SEN stepping in and taking over production with NEP as an intermediary allowing the streaming giants to put in a competitive bid with the AFL. Won't happen otherwise and it's just leaving good money on the table.
Who or what are NEP?
What do they do 'for AFL production'?
Who pays them?

What/who are PLP?
 

The 747

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weak argument.

There's money in streaming that wasn't there when the deal was signed in 2016, let alone the 2011 deal either.

Amazon/Apple/Twitter/ViacomCBS don't want to run production, they want a finished product. Those are 4 companies with cash to stump up. Would be in the AFLs best interest to find out what they'd pay for a complete product.

The EPL outsources all international coverage to PLP so that they can sell a complete product to any backwater that wants EPL coverage. Local suppliers can take PLP commentary, analysis and pre/post-game or do their own in-house. Optus wouldn't have the EPL if it weren't for PLP.

NEP already does most of the leg work these days for AFL production, I could see SEN stepping in and taking over production with NEP as an intermediary allowing the streaming giants to put in a competitive bid with the AFL. Won't happen otherwise and it's just leaving good money on the table.
Not sure you are firing at the right target here, I agree with your post, it is what I posted about earlier. There is more money in it for the AFL to produce their own product and sell it, rather than what they do now.
 

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