The South African Rugby Union (SARU) has concluded a record-breaking broadcast rights package for the next five years following the conclusion of the SANZAR rights negotiations, it was announced today (Thursday).
SARU’s income from broadcast rights will be almost doubled, making it one of the biggest television rights packages ever secured by a South African sport.
“Broadcasting rights are the lifeblood of sporting codes and we’re pleased with the outcomes of what have been long and detailed negotiations with SuperSport and Australia’s Fox Sports and SKY Television in New Zealand,” said Andy Marinos, who handled the negotiations on behalf of SARU as acting managing director of the now dissolved SA Rugby (Pty) Ltd.
“The deal secures the well-being of South African rugby for the next five years, allowing us to remain competitive on the world stage.”
SARU’s broadcast rights package comprises two components: one part for SANZAR competitions (Vodacom Super Rugby and Vodacom Tri-Nations) and the other for ‘domestic’ rugby.
SANZAR today (Thursday) announced a 35% increase in US dollar terms on the rights awarded for southern hemisphere events to US$437m (R3.22bn) – an increase of US$114m (R841m) on the equivalent contracts in the previous broadcasting arrangements.
The second component of the rights package was negotiated in 2007 when SARU unbundled local competitions from SANZAR tournaments. A rights fee of R700m was agreed with SuperSport for the June Tests, Absa Currie Cup and Vodacom Cup for the period 2011 to 2015. That amount is included in the aggregated amount released by SANZAR to provide an accurate comparison with the previous rights deal.
When added together the two elements almost double annual revenues derived from broadcasting rights for SARU.
“This income will help us ensure that we remain a major force in world rugby,” said Marinos. “It will assist in the retention of our top players, continue to fund the promotion of rugby, importantly provide additional revenue to fulfill our development objectives and allow for increased disbursements to the provinces.”
Meanwhile SANZAR has begun negotiations for the sale of rights to broadcasters in the United Kingdom and Ireland, France and other broadcast markets in Europe, Japan, the remainder of Asia and the Americas.
“The expansion of Vodacom Super Rugby to 15 teams next year will offer more local derbies and more rugby for supporters and broadcasters,” said Marinos. “SANZAR is working towards the addition of Argentina to the Vodacom Tri-Nations while our domestic Absa Currie Cup remains as keenly contested as it has been since 1892.
“These deals prove that rugby remains a massive drawcard for the television audience and we’re fortunate that we have a partner in SuperSport to assist us to achieve our goals.’
The new broadcast contract runs from 2011 to 2015.
The headline should probably read: MELBOURNE’S COLIN SMITH SECURES TV DEAL FOR SANZAR
not SARU – they will enjoy the ride. SARU’s negotiators still left 5% of these revenues – a not insignificant amount of R157m – on the table for Australia and NZRU.
This should throw some light on the subject.
The man who holds the key to TV sport
ROY MASTERS
April 22, 2010
SHOW ME THE MONEY
Broadcasting rights fees are the lifeblood of professional sport in Australia and, along with its close relation, sponsorship, contributes 60 to 80 per cent of total revenue.
More than $350 million in TV income pumps through Australian sport annually, with one player involved in all the big contracts, either the current deals, or negotiations for the next rights fee package.
He is Colin Smith, a 50-year-old Melburnian, who, despite his surname being the most common in the English-speaking world, is the only Smith common to the caller ID’s of the phones of Australia’s top sporting officials.
He logs more air miles than most pilots, crossing the country as the boss of LEK’s regional Sports, Gaming, Media and Entertainment division, as well as recently linking up with the former Cricket Australia and ICC boss, Mal Speed, to form Global Media and Sports, a firm specialising in negotiating broadcasting deals for sports.
Smith worked on the biggest TV deal in sporting history – the AFL’s five-year, $780 million contract – in tandem with Ben Buckley, who is now the chief executive of the FFA.
Buckley and Smith lodged the AFL’s initial claim for rights fees to the Channel Seven-Ten consortium at only 4 per cent of the sum the then Channel Nine boss, Kerry Packer lodged, forcing Seven-Ten to meet it under their first and last rights clause.
Smith is advising the NRL chief executive, David Gallop, on rugby league’s next broadcasting contract, which hopes to deliver parity with the AFL.
Smith helped ARU chief John O’Neill with the soon-to-be-announced SANZAR rights, and helped Cricket Australia boss James Sutherland with the last TV deal and is involved in the next round of rights. Thoroughbred racing, including the AJC, VRC and Queensland Racing, consult with Smith and AOC chairman, John Coates, has engaged him on digital rights.
Even exotic deals – advising PNG on the broadcasting value it can bring to the NRL as a possible new franchise and preparing a brief for ANZ Stadium on the likely TV income of a possible hybrid rules match between the Kangaroos and Wallabies – are on his desk.
The big professional sports are lining up like formula one cars at the grid, as anticipated changes to the federal government’s anti-siphoning rules are expected to favour the cash-strapped free-to-air broadcasters.
Rugby union media rights are first out, with the Wallabies and Super 15 deals soon to be announced. The AFL is next, with its contract concluding in 2011, followed by the NRL a year later. Cricket is the last of the big sports to finish existing deals.
Smith rejects claims his multiplicity of deal-making exposes him to accusations of conflict of interest, saying, ”I am acting for the sport, and not the sport and the broadcaster at the same time. If I was doing the AFL and the NRL at the same time, it would be a problem.”
Smith is convinced all sports will receive more from their next broadcasting deals. ”I am very confident that the leading professional sports will continue to grow. Popular sports guarantee TV audiences. The fragmentation of audiences across more channels on free-to-air and pay TV, and now through broadband, will ensure an increase in overall audiences watching the game and holding it for longer.”
Nor does he see an increase in one sport’s rights income necessarily being at the expense of another, although it seems certain Channel Nine – desperate to hold NRL rights – will not pitch seriously for AFL, leaving the Seven-Ten consortium as the only bidder.
He cites NRL as an ”excellent TV product” and notes Gallop is considering unbundling the existing rights of the Telstra premiership, State of Origin and Four Nations tournament, although Channel Nine believes its first-and-last rights deal prevents the NRL from doing this.
Of rugby union, he says: ”The new SANZAR Melbourne team in Australia’s second-largest market, together with a guaranteed finalist from the five Australian teams, will give the competition a real boost. Last year, the Waratahs effectively disappeared off our TV screens for three weeks because they were playing in South Africa after midnight in Australia. This will happen less under the new contract.”
Of cricket: ”The international runaway success of the Twenty20, especially IPL, is a clear indicator the market has adopted another form of cricket. Similarly, the success of the KFC Big Bash this season, with the inclusion of international players, has been a big success.”
However, the Australian sports market is highly competitive, with more national leagues per million of population than any other nation.
”There are clubs that are financially challenged,” Smith said, pointing to Super 14’s Queensland Reds, recently taken over by the ARU; the A-League’s North Queensland Fury being bailed out by FFA; the AFL’s Port Adelaide, which sought a merger with a more cashed-up second-tier club; and NRL team Cronulla’s ongoing problems with the bottom line.
”The picture for the football codes is rosy only while all teams are competitive and guaranteeing an audience to TV.”
Smith is a gold medal-winning rower, winning Australia’s first ever World Championship in the lightweight fours at Lucerne in 1974. He subsequently won medals at the following three World Championships and, as chairman of Rowing Australia, he will lead the sport to the London Olympics.
While he may have multiple oars in the water at once, he is confident he can negotiate the murky waters of Australian TV, with its history of conspiring to depress rights fees to sport.
Very interesting… maybe I should go into broadcasting deals… seems like there’s money to be made.
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