Seven West Media will be the next FTA broadcaster for cricket ending Nine Entertainment Co. four-decade stranglehold on the sport. News Corp-controlled Foxtel will pay for the majority of the rights in a $1 billion deal which could see a large number of matches held back for pay-TV, including some Twenty-20.
Big Bash League’s media equity and brand accessibility is arguably only what it is thanks to Network Ten so a hard act for Seven to follow and a risk with many games exclusive to PayTV.
The numbers are right now for Cricket Australia but the impact will be in 3-5 years. A definite change in the landscape and an all-in on sport for Murdoch.
The Australia reports the deal as is understood to include Seven committing to estimated annual payments of $75 million or $450m over 6 years, with Foxtel stumping up $105m a season or $630m.
Read more detail here:
The Australian - Seven Network seizes cricket media rights from Nine, Ten in a partnership with Foxtel
SMH - Seven and Foxtel nab cricket broadcasting rights in $1 billion deal
There’s only one broadcaster winning the (long term) strategic game here.
For Nine this now isn’t a ‘must have’. Even the revised Nine Entertainment Co. & Network Ten offer $900m ($150m pa over 6 years) to keep cricket on FTA, would see Ten retain the Big Bash League while Nine would keep the Test matches...but importantly international Twenty20 & 50 over matches would switch from Nine to Ten.
Nine has already won the Australian Open Tennis Tournament & entering the Cricket negotiations with Ten means it shifts a significant portion of its cost base, freeing it up for more diversification & greater margins & still receive summer sport revenue.
Foxtel's aggressive bid estimated between $160 to $170 million per year for every game (or $800-850 million) may be viewed by Cricket Australia as a financial lifeline as SMH points out, but unless Foxtel & Seven West Media can deliver something (questionable & arguably detrimental to CA brand) like a knock out news lock out (Comm Games style), I’d question the long term strategy. Even if the bid wins, they ‘win’ the rights but inherit the largest cost base for a summer sport with no additional benefit for users and no significant audience gains for Cricket Australia. Right now, CA need an outcome which delivers improvement/stability for the brand. Taking cricket from FTA is a risk.
As News Corp play hard ball, Nine’s patience, holistic view of rights & willingness to collaborate should pay off here.
Is $1.5-2 billion too high for AFL rights come 2017 or do we assume the sport will continue to grow, the potential exists for more cost effective and creative methods of delivery to mature and produce greater returns and there is more scope foe creativity in the structure of rights' deals?
If we assume Gyngell is genuine on the call to arms for regional streaming - "In five years time we will just go around regional television and stream content into those markets - if you can watch it from America…you can watch it from Wagga", this creates greater monetisation opportunities also, no?
This is potentially naive thinking, but the inability to future project opportunities for sports viewing either by new means and the current magnitude of the I assume the current profit margin networks are rewarded with is limiting the thinking on the possibilities and investment into better offerings for consumers will always lag behind.
PS. Wagga goes nuts for AFL!
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