The next Media rights deal (2023-?)

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Kwality

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That relevance across 3 matches does not supersede the other 190 odd matches of the season in value. Key part, sure, but 8 million viewers out of 100 million or more should tell you something.
In a marketing sense I disagree, like the AFL GF, the Origin games are a different beast to H&A & priced accordingly.

Digressing I see Foxtel & Kayo subscribers continue to increase:
 

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Kwality

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Assume $25 per month average (to account for the telstra $10 off), that's $25m per month or $300m per year in revenue. Not bad at all.
Foxtel

Full-year revenues increased $188 million, or 10%, compared with the prior year, reflecting a $217 million, or 12%, positive impact from foreign currency fluctuations and $89 million of higher revenues from Foxtel’s streaming products. The revenue increase was partially offset by the impact from fewer residential broadcast subscribers.

Lower expenses related to entertainment programming, transmission and employee costs were offset by increased investment in streaming products and $35 million of higher sports programming rights and production costs.

As of June 30, 2021, Foxtel’s total closing paid subscribers were 3.891 million, a 40% increase compared to the prior year, primarily due to growth in Binge and Kayo subscribers and higher commercial subscribers, partially offset by lower residential broadcast subscribers. 1.885 million of the total closing paid subscribers were residential and commercial broadcast subscribers, and the remaining 2.006 million consisted of Kayo, Binge and Foxtel Now subscribers.

As of June 30, 2021, there were 1.079 million Kayo subscribers (1.054 million paying), compared to 465,000 subscribers (419,000 paying) in the prior year.
 

kranger

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We could show that from the ratings audiences alone as they stand. On FTA, more than half the ratings come from Victoria alone, which isnt surprising as Melbourne is the best rating tv market in the country, and not just the AFL.

Its around 20% of the broadcast ratings for WA. Similar for SA. Tasmania/QLD/NSW combined are about 9%.
Thanks Wookie.

So it could be said, for the number of teams each state has compared to their amount of viewers:

• Victoria is about on par with 55% of teams and >50% of viewers;
• WA and SA are well ahead with 11% of teams and ~20% of viewers each; and
• QLD and NSW have a bit of work to do with 11% of teams but
You would think Vic, WA and SA are mature markets, with limited growth potential, other than in line with population growth.

Considering QLD and NSW combined represent more than 50% of Australia’s population, spreading an interest in AFL in just a portion of the existing population in QLD and NSW, there is a lot of potential for growth in their viewership, and therefore future media rights.
 

Gigantor

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Attracting eyeballs to any sport on a consistent basis (who aren't already rusted on) is very, very hard work.

The Storm has been consistently successful in Melbourne for 25 years, and the Melbourne ratings remain small beer.

With Swans, it would have taken about 25 years to go from regularly getting 25k ratings to getting 40k ratings (in the Sydney market), and for all we know, that might be the limit.

The Giants will take the same amount of time (at a minimum).

The Suns may not even get there, in that we might just have to accept that they attract small numbers and always will.

It's not just the NRL and AFL, it's everyone.

About the only sporting comp that has broken the mould in last 25 years would be BBL, but that's off a pretty solid base of being a very popular sport across the whole nation and being played during a period when there is no NRL/AFL.

Both Super Rugby and A-League have declined over the course of a 16 year period, in the case of the A-League, declined considerably, to the extent where they are half a head in front of NBL ratings (which in turn are about as low as any form of programming could ever be).
 

The_Wookie

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Seller opportunities, risks
There is no doubt the new streaming players are a positive development for rights-sellers in Australia – they have clearly increased competition for rights.

It is not clear, however, how much rights fee inflation they will stimulate. And the shift to streaming is also creating new challenges.

Asked how positive the recent developments are for sellers, one local expert said: “Very…Rights fees would have trended down but now the market has become much more competitive.”

Luke Bould said: “It’s positive, but I don’t expect to see an explosion in rights value.”

One challenge for sellers is learning to navigate a new, changing landscape.

One of the most important shifts has been Foxtel switching strategy from being “the home of all sport to being more selective”, as one expert put it. This is evidenced by the broadcaster’s scaling back commitments to football and rugby union.

The newer, or newly ambitious, players also present risks for rights-holders, in that they are less established and have a smaller reach. Very new platforms like Sports Flick or Amazon pose the greatest risks. But even Paramount+ has its downsides – as yet, it has no subscribers.

Such concerns could be offset by a sport getting centre-stage on a newer platform. As one industry expert said of Ten’s APL deal: “(APL) will get a lot of attention on Ten and Paramount+. It’s going to be ‘their’ sport. They need it to be their sport because they don’t have much else.”

The new landscape also poses challenges for consumers which could yet spill over into problems for sports and their broadcasters.

For example, premium football content is now split across four platforms in the market – Ten/Paramount+ (domestic league and national team), Optus (English Premier League, Fifa Women’s World Cup 2023, among others), Foxtel (various European leagues, via beIN Sports carriage) and Nine/Stan Sport (Uefa Champions League). Until last year, football broadcasting was dominated by Foxtel and Optus. Prior to 2016, football fans could get all the top content by subscribing to Foxtel.

Bould says: “The splintering of sports – from one pay-television player plus the free-to-airs, to many streamers – means that fans have to pay for multiple subscriptions…there is a limit to this.”

Tests ahead

The Australian rights deals in the last six months have been for second-tier sports properties. The real test of the changed state of the market will come when the big domestic properties are up for renewal.

The next two cabs off the rank in that regard are AFL pay-television rights and NRL free-to-air rights, both up for renewal by end-2022.

Bould told SportBusiness: “There is a lot to play out and there is a lot of risk at the moment. I think that means a more subdued market in terms of increases, although the lower-risk, larger sports like AFL and NRL will likely be the beneficiaries of any growth in the short term.”

Behind the market specifics in Australia, there are bigger, open questions around the sports streaming business that will have a bearing on rights revenues in the market.

It is not clear whether the streaming business will be as lucrative as linear television was, particularly pay-television. Some core features of streaming products seem to count against this, such as lower costs to the consumer, shorter contract terms, and frictionless unsubscribing.

Also, changes in viewing habits appear to be reducing appetites for watching entire sports events, with shorter-form video satisfying many viewers. And there is ever-increasing competition from other content for consumer viewing time.

Australia’s video entertainment business is, like others around the world, in flux, and it’s hard to see yet what the outcome will be for sports rights buyers and sellers.

For the short term, at least, there is an increase in competition for rights. This may not translate to large rights fee increases across the board, as in the decades of the pay-television boom. But it’s a glimmer of good news for rights sellers, who are operating in a business that is getting tougher year-on-year.
 

NoobPie

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The next two cabs off the rank in that regard are AFL pay-television rights and NRL free-to-air rights, both up for renewal by end-2022.
This is a pretty big oversight. The AFL of course signed an extension with foxtel at the end of last year.
 

Kwality

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Luke Bould said: “It’s positive, but I don’t expect to see an explosion in rights value.”

I'd guess this is the FFA marketing guy of that name.
 

The 747

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Foxtel

Full-year revenues increased $188 million, or 10%, compared with the prior year, reflecting a $217 million, or 12%, positive impact from foreign currency fluctuations and $89 million of higher revenues from Foxtel’s streaming products. The revenue increase was partially offset by the impact from fewer residential broadcast subscribers.

Lower expenses related to entertainment programming, transmission and employee costs were offset by increased investment in streaming products and $35 million of higher sports programming rights and production costs.

As of June 30, 2021, Foxtel’s total closing paid subscribers were 3.891 million, a 40% increase compared to the prior year, primarily due to growth in Binge and Kayo subscribers and higher commercial subscribers, partially offset by lower residential broadcast subscribers. 1.885 million of the total closing paid subscribers were residential and commercial broadcast subscribers, and the remaining 2.006 million consisted of Kayo, Binge and Foxtel Now subscribers.

As of June 30, 2021, there were 1.079 million Kayo subscribers (1.054 million paying), compared to 465,000 subscribers (419,000 paying) in the prior year.
One would assume that being forced to stay at home - higher subscription numbers for the past year.
 

The 747

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The relevance of the top rating Sport is the advertising rates to the marketers.




The article quoted does not write off FTA, more like a repositioning around the advertising dollar:
Seven West Media chief digital officer, Gereurd Roberts, said: “Even before Tokyo 2020 formally starts, Australians are flocking to 7plus to cheer on their teams.

“Tokyo 2020 will not only be the world’s biggest sporting event, it will also be the biggest digital event in Australian history. If yesterday was any indication – and we think it was – the audiences are going to be enormous.”
I am not a representative sample but I cannot fathom why anyone would have access to streaming services and choose to stream Australian commercial television - unless they were forced to by sporting rights allocations. Commercial television is ghastly in this country.
 

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Kwality

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Not really, you pay for the data plus you pay with your eyeballs on ads. It is more expensive that actual TV in that way.
As I'm not technically minded, what would it cost to watch an AFL season, my team only, 22 games, 2.5 hours a game, 55 hours if I streamed it.

To me the problem is financial for any sport that goes down the streaming path, where will the money come from?
Will a streaming service pay the big dollars the current arrangement does for AFL/NRL?
 

Gigantor

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To date, the streaming services have picked up all the 2nd tier stuff (and in the Australian context that includes the Premier League).
With at least half a dozen of these services now in competition, and rising, it's hard to imagine any of them picking up an A grade sport...unless...one of them want to take the plunge at challenging Foxtel, who now are basically surviving on the strength of the NRL and AFL.
Lose one of them, and they are dead (even if the price to keep them is also killing them) - but that sort of tells you that a new streaming service can't survive paying the asking price to have one of them AND still expect to charge bargain basement prices (as they all currently do).
So for the next deal - expect Foxtel and the larger FTAs to continue paying the big dollars, but perhaps without the above-CPI increases we've seen over the last 20 years, if nothing else, merely to slow down their inevitable declines.
Once their gone, unless something appears to take the place of Foxtel and run with all the A grade sports, I guess that will single the moment when the AFL finally goes it alone - to have 1 million plus members is a bad starting point for any new streaming service.
I'm guessing once the AFL enters this brave new world, that the anti-siphoning rules no longer apply.
Hard to imagine that the AFL could make a single sport subscription service work if one third of all games continue to be shown live on FTA.
 

The 747

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As I'm not technically minded, what would it cost to watch an AFL season, my team only, 22 games, 2.5 hours a game, 55 hours if I streamed it.

To me the problem is financial for any sport that goes down the streaming path, where will the money come from?
Will a streaming service pay the big dollars the current arrangement does for AFL/NRL?
In data? Not much. But not free.
 

threenewpadlocks

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Are people including Kayo as part of this? Naturally sports rights have carried over from Foxtel, but it's not as if there's been no independent Kayo strategy - there has been with Kayo freebies, some leagues that are only on Kayo and not on Foxtel Go/Now, etc.
 

Kwality

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Are people including Kayo as part of this? Naturally sports rights have carried over from Foxtel, but it's not as if there's been no independent Kayo strategy - there has been with Kayo freebies, some leagues that are only on Kayo and not on Foxtel Go/Now, etc.
Foxtel & Kayo are owned by News/Telstra, just different products.
 

JohnZ

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As I'm not technically minded, what would it cost to watch an AFL season, my team only, 22 games, 2.5 hours a game, 55 hours if I streamed it.

To me the problem is financial for any sport that goes down the streaming path, where will the money come from?
Will a streaming service pay the big dollars the current arrangement does for AFL/NRL?
Under the current broadcast deal, a H+A game costs about $2m before production costs for Ch7 or Fox to air it. Let's call it $3m all up (if anyone has more accurate numbers for production costs, please tell, I'd love to know, $1m is just my educated guess). That's a lot of money to stump up.

Assuming no ads during play, you're looking at about 30 ads across QT, HT and 3QT. If you could sell those ads for $50k to $60k a pop you'd be looking at $1.5m to $1.8m in ad revenue (which seems to be the going rate for H+A). Then you add a broadcast partner to the pre-game and post-game coverage, as well as ads and you could get that up to $2m ad revenue for a full broadcast. So you've covered the rights costs, but not the production costs.

If you had 3 streaming exclusive games per week, that's 12 per month. So that's $12m in revenue you need to bring in from subscriptions to cover production and other costs. $10 per month is 1.2m subscribers, $15 per month is 800k subscribers, $20 per month is 600k subscribers. Those numbers all stack imo.
 

Kwality

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Under the current broadcast deal, a H+A game costs about $2m before production costs for Ch7 or Fox to air it. Let's call it $3m all up (if anyone has more accurate numbers for production costs, please tell, I'd love to know, $1m is just my educated guess). That's a lot of money to stump up.

Assuming no ads during play, you're looking at about 30 ads across QT, HT and 3QT. If you could sell those ads for $50k to $60k a pop you'd be looking at $1.5m to $1.8m in ad revenue (which seems to be the going rate for H+A). Then you add a broadcast partner to the pre-game and post-game coverage, as well as ads and you could get that up to $2m ad revenue for a full broadcast. So you've covered the rights costs, but not the production costs.

If you had 3 streaming exclusive games per week, that's 12 per month. So that's $12m in revenue you need to bring in from subscriptions to cover production and other costs. $10 per month is 1.2m subscribers, $15 per month is 800k subscribers, $20 per month is 600k subscribers. Those numbers all stack imo.
You could isolate the dollars paid for rights to each game now. Thats the money that wont be in the bank at the AFL/paid to the clubs for putting on the spectacle.

Interesting that in your first para, your estimate the cost to the round $mil.
 

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