Rugby Finances
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Nine offers $30 million for rugby union broadcast rights
Super Rugby union matches could be on free-to-air television live for the first time next year after Nine Entertainment Co lodged a $30 million bid for the broadcast rights aimed at wresting the game away from pay-TV group Foxtel.
Industry sources familiar with Rugby Australia's discussions with media companies who requested anonymity said Nine had offered to pay about $30 million a year in cash and free advertising. The television, publishing and digital company decided late last week to offer more cash than free advertising to sweeten the deal. Nine declined to comment. RA declined to comment.
Rugby Australia has struggled to grow the game due to a lack of exposure and poor recent performances by the Wallabies. It wants more matches on a free-to-air television network to build the sport's audience. All Super Rugby games are broadcast on Foxtel and subscription streaming service Kayo, making it difficult for the governing body to reach all potential fans.
Under the deal Nine (owner of this masthead) would broadcast Wallabies Tests, the Rugby Championship and one game a week of Super Rugby on its television network. All other matches would sit behind a paywall on Nine's subscription streaming service Stan. Industry sources said Rugby Australia is likely to make a decision on the broadcast deal at a Board meeting this week.
Former RA boss Raelene Castle was eager to get more free-to-air coverage for the sport to grow the sport's audience. Nine's offer is smaller than the bid incumbent broadcaster Foxtel made nearly two weeks ago. Industry sources familiar with the talks previously said Foxtel had offered between $35-$40 million for the matches despite previous claims the pay TV operator did not believe the sport was worth that much. However, some Foxtel sources indicated they offered less than $35 million. Foxtel pays between $30 million to $40 million a year for the rights but was hoping to renegotiate price in the same way it landed new deals with the AFL and NRL.
Foxtel has broadcast rugby games in Australia for two decades. The broadcaster, which runs Fox Sports, offered to sign a new five-year deal late last year but discussions fell apart earlier this year over the pricing. Foxtel has also reduced its rugby commentary budget in recent years and no longer has a mid-week show.
When talks first fell apart between RA and Foxtel earlier this year, Ms Castle approached Nine about a bid. A successful bid by Nine would also change the positioning of streaming service Stan, which currently runs international and local drama and film. Stan currently has 2 million subscribers, a large audience base for rugby union to try and attract. Kayo had 600,000 subscribers in September.
Any deal with the Nine would be short-term but if the involvement of Stan proves a success, it could open up the potential for other sports rights negotiations to include the streaming service in future. Such a move would put pressure on Foxtel which is heavily dependent on sport for subscribers.
Nine is the second free-to-air broadcaster to make an offer for the rights. Network Ten bid broadcast the Wallabies Tests last month but offered less than the $3.5 million a year it currently pays. Ten does not want to pay large amounts for the rights because of declining audiences. In 2015, the average audience for international Tests on Network Ten was about 345,000. In 2019 the audience figure was 194,000 and a lack of audience often results in less appeal for advertisers.
Network Ten's chief sales officer Rod Prosser said last week low-rating sport was of no benefit to the broadcaster. "Sport obviously attract advertisers, and particularly blue chip advertisers in droves. What our clients are mostly in now is the audience [a sport] delivers. Having a low rating sport, just for the sake of sport, is of no benefit to me."
One caveat on the value of the rights will be whether South Africa continues to participate in the Rugby Championship next year. South Africa confirmed last week it would not play in this year's tournament but rugby sources have indicated it is considering playing in a Northern Hemisphere competition next year. The Rugby Championship is a highly lucrative competition for the governing body and the absence of South Africa will reduce its value. Interim RA boss Rob Clarke said late last week he was confident that the Springboks would not exit the Rugby Championship for good from next year.
Foxtel, Ten and BSkyB are at the end of a $285m five-year deal with RA signed in 2015. Securing a new deal is crucial for the financial security of the code (a large amount of RA's revenue comes from broadcasters).
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O2 carry on their England sponsorship, with equal money to mens and womens rugby. That’s a big jump, will be massive as they can make their players full time pros again, I guess
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Cheating a bit.
Is really on the topic of central Govt covid fund finacnes and regional council finances. -
@Rapido said in Rugby Finances:
Cheating a bit.
Is really on the topic of central Govt covid fund finacnes and regional council finances.Put a roof on it......
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@Bovidae said in Rugby Finances:
@Rapido How much broadcasting money do SA Rugby get now? SFA I hope, even if SuperSport shows the other games.
Still as clear as mud.
In another thread, talk that all 4 get equal payments regardless of if they turn up.This (not very good) article below - has a figure. But still not clear how much everyone else is also losing.
Furious Aussies blame SA Rugby for financial loss - argentina
SPOTLIGHT: Rugby Australia says millions of dollars in much-needed revenue has been lost because of South Africa's withdrawal from the Rugby Championship.
forced SANZAAR into reverting to a Tri-Nations tournament featuring Australia, New Zealand and Argentina, with the original 12-match competition reduced to six games.
It’s been speculated that South Africa will forego ZAR50-million rand (AU$4.3-million) for not fronting up.
“The financial loss for them will be great,” Rugby Australia chairman Hamish McLennan said on Wednesday.
But the Springboks’ scratching will also seriously impact RA’s finances.
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Organisers will now have to contend with broadcasters who will pay considerable less than full freight for the tournament. And while the various bodies that have made the TRC possible – the NSW and Queensland governments and Tourism Australia – are still backing RA, there is likely to be a scale-down of their support.
While RA will admit to no more than “disappointment” at the South African decision, officials are privately dumbfounded by a move which will financially hurt all four SANZAAR partners. Still, it does not want to rock an increasingly leaky boat. South Africa looks to be permanently investing in Europe for its Super Rugby-style football, but it has made a firm commitment to the TRC and the SANZAAR joint venture into the future.
While SANZAAR’s days do appear numbered, it would certainly not be in Australia’s best interests if the organisation collapsed. SANZAAR has endorsed Australia as the only southern hemisphere contender for the 2027 Rugby World Cup, but if the organisation goes under, holding that voting bloc together will not be easy – particularly considering all the strain Australia has been having with its partners of late.
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https://www.bbc.com/sport/rugby-union/54659203
The IRFU's annual report has revealed a £32.4m loss which chief executive Philip Browne says will result in drastic cuts unless supporters are able to return to grounds in large numbers.
The dramatic downturn in Irish rugby's finances follows last year's record surplus of £25.4m.
I think this 'year' is for 15 moths rather than 12. as have changed their financial year to align with rugby season. If i read it correctly/
and further reporting:
Irish rugby reports €35.7million deficit, faces 'drastic budget cuts' unless fans come back soon
Irish rugby officials recorded record revenues in 2019 but that situation has now radically changed and they fear the coming year.
Treasurer Tom Grace added: “We’re very fortunate to have cash in the bank and an asset strong balance sheet at the moment. However, these resources won’t last forever and any amounts that we are forced to spend now will affect what we will have to spend in the future when some semblance of normality returns.
“At present, we are able to fund ourselves and the provinces for the next twelve months, even without further remedial action, but this needs to be kept under constant review and our next major review date will be in December.”
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RFU annual report came out few days ago.
Twickenham’s finances for the financial year show a loss of £10.8m – lower than the £11.5m that was budgeted by the RFU due to the cost of the World Cup campaign and hosting only two Six Nations fixtures.
However, the figure is for the year until June 30, meaning the financial damage of Covid-19 to date has yet to be fully reflected – although £23m was still lost in gross revenue due to cancelled events from March to June.
Of the games scheduled to be staged at Twickenham, only the non-cap international against the Barbarians was affected by the pandemic during this time.
RFU reports operating loss in excess of £10million for 2019/20
Accounted figures measuring the damage the pandemic caused to rugby in England until the end of last June have been confirmed by the RFU.
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@Rapido said in Rugby Finances:
From the Richard Knowler article on NZRUInteresting titbit on the value of their sky shares as part of the last TV deal.
When Sky NZ renewed its broadcast deal with NZ Rugby to screen content such as All Blacks, Super Rugby and Mitre 10 Cup games, reported to be worth around $400 million over 5 years, it was awarded 5 percent of the company’s shares as part of the new relationship.
The balance sheet notes the investment was recognised on November 1 at an acquisition fair value of $19.4 million. On that same date Sky disclosed it had issued NZ Rugby 21,801,325 shares at 89 cents.
This week those shares were valued at around 15 cents, reducing NZ Rugby’s investment, which must be held for a minimum of 2 years before they can be sold, to $3,270,198.
It’s a black eye NZ Rugby could do without, given everything else that has happened since it confirmed that deal. But it’s in for the long haul on the score, as it is in terms of trying to protect and nurture the sport in his country.
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Cash-strapped IRFU receive massive multimillion-euro bailout from Irish Government
The announcement comes just three weeks after the IRFU reported a record deficit of €35.7 million due to the coronavirus pandemic.
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@Rapido I get the feeling that will be replicated to some degree by all govts of affected unions.
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@antipodean said in Rugby Finances:
@Rapido I get the feeling that will be replicated to some degree by all govts of affected unions.
Yes, I think you'll be right there.
But, I don't think the IRFU are really in need of a bailout, yet.
I think they've probably benefited from a packaged bailout to all sports by Irish government, of which they will receive 21% of the total €85m.
Went into the crisis as the union in the best financial position, most generous union in terms of pay cuts (only 10%) and the first to get bailed out.
< cough> state sponsored poaching < cough>
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@Rapido long overdue are international transfer fees, salary caps. The PONZI scheme that is the international market for elite rugby players does nothing for developing rugby. If players want to go to other sports such as league for bigger money then let them. It’s the elite players that screw the market for everyone else. I’ll admit there is no chance any changes will be made. Everyone is greedy and entitled. European clubs are no different to Auckland schools, or the academy systems run by our bigger unions.
