Sport AFL $10 billion EPL bonanza: can the AFL cash in?

$10 billion EPL bonanza: can the AFL cash in?

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The sporting world issued a collective gasp on Wednesday when the size of the English Premier League’s new broadcast deal was revealed.

Subscription television company Sky and broadband firm BT paid £5.1 billion (almost $10 billion) for the rights to show the next three seasons of EPL games. Yes, you read that correctly – three seasons.

The decision came after a bidding war, which saw BT try to squeeze into what had been Sky’s territory and reported bids from companies like America’s Discovery Network and Qatar’s beIN Sports.

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The incredible 70 per cent increase puts the value of each match at a staggering $20 million – yes, even rubbish ones between Hull and QPR.

So what does this mean for the AFL, whose current broadcast deal ($1.25 billion for five years between Channel Seven, Foxtel and Telstra) expires at the end of 2016?

In an increasingly splintered and fickle media market, live sport continues to be a massive audience driver.

Early discussions are in progress and it’s a long, attritional game.

AFL boss Gillon McLachlan said last year the next broadcast arrangement would be “very different” to the existing one.

Gillon McLachlan has joked he'll be looking for a new job should the AFL's next broadcast deal not smash the $1.25 billion for the last one. Photo: Getty
Gillon McLachlan has joked he’ll be looking for a new job should the AFL’s next broadcast deal not smash the $1.25 billion for the last one. Photo: Getty

“The evolution we’ve had in the media space has been significant in the last period of time,” he said.

“What that looks like, I’m not going to telegraph or talk to, but I’m sure the contract will look different.”

So what exactly does McLachlan mean? And is a 70 per cent increase, like the one announced in the UK on Wednesday, feasible for footy?

Brett Hutchins, an associate professor at Monash University and the co-author of the book Sport Beyond Television, doesn’t think so.

“The AFL has appeal in Australia but it has trouble increasing its value for international audiences for obvious reasons, whereas the EPL is jewel in the crown – the whole world watches it,” Mr Hutchins told The New Daily.

“The strength of the Australian media and television market is actually a problem for the AFL at the moment.

“Channel Ten are not strong, that leaves Nine and Seven. The public broadcasters aren’t serious competitors. So it’s a question of how they generate a bit of competitive friction.

“I think a league like the AFL can be reasonably confident in their financial forward planning that the value of their game is not going to drop considerably and it will likely grow.

“I’d very much doubt, given the size of our market, that you’ll see a massive increase like we’ve seen in the UK.”

Professor David Rowe, Mr Hutchins’ co-author of Sport Beyond Television, said the “different” AFL rights deal could mean more “slicing and dicing” of the code between more than one commercial network.

“My prediction is that it will not be any less, it will certainly be more. That will depend on competition,” Professor Rowe told The New Daily.

“We know that (Channel) Ten want to get back in, they’ve had a nice little earner out of the Big Bash, and they’ve realised that if they get the right sports property, that’s strength.

“They’ve effectively been driven out of premium sports, they are strapped for cash – we know that.

“We could be a looking at a little slicing and dicing, so spreading it around more than one free-to-air network.”

Both experts feel the digital rights, currently held by Telstra, will be crucial, and believe the AFL’s own media unit – now fully armed and operational – could be a big bargaining chip.

“The one thing the AFL has compared to any other sport in this country is that AFL Media is up and running and has significant capacity to distribute content,” Mr Hutchins said.

Each Premier League game will be worth $20 million. Yes, even ones like this. Photo: Getty
Each Premier League game will be worth $20 million. Yes, even ones like this. Photo: Getty

“So, if they don’t get the sums they like they can say ‘well, we’ll take some of these (games) ourselves and see what we can do with them’.

“I don’t think they’ll do that, buy they can actually make that play at the negotiating table.”

Professor Rowe agrees.

“The digital rights are becoming more valuable, currently held by Telstra,” he said.

“There’s been speculation that with the size of the AFL’s own media operation, that ultimately the AFL will produce it’s own TV channel with live-to-air and essentially sell that.

“But I don’t think that’s going to happen with this next contract, I don’t think we’re there yet.”

However the negotiations play out, Professor Rowe says Australia’s anti-siphoning laws – some of the most rigid in the world – mean Foxtel can’t implement a Sky-style monopoly of Australia’s biggest football code.

“The big difference in Australia would be the stronger anti-siphoning regulations,” he said.

“Only one in three households in Australia subscribes to pay television.

“The only thing that saved BSkyB from going bankrupt in the early 90s in Britain was the Premier League. They took the top football matches off free-to-air and put it on pay-TV.

“If you tried to do that in Australia, there would be a revolution.”

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