A billion-dollar valuation would appear preposterous, considering the initial investment was $150m over seven years. Furthermore, it has been undermined by propaganda that “the NRL is spending $150m on journalists”, a grab by club bosses for more cash.
However, the reality is that the code’s digital arm is far more than its online site, nrl.com. It embraces four fields: Content; fan data, including links with clubs; product, including building websites and apps for club use and NRL departments; and IT, ensuring the video platform operates effectively.
Still, nrl.com has shown phenomenal growth in all metrics since it was bought from Telstra in December 2017.
Eighteen months ago, nrl.com had 600,000 subscribers. The target for 2022 was 800,000 and earlier this year had reached 750,000. The NRL digital department also provides links with clubs and one source estimated that over $7m of ticket sales to games would not have been realised without this.
NRL executives hide behind the “commercial in confidence” narrative when asked to confirm valuations, but one source described it as “a growing business” where income already exceeds expenditure.
Club bosses optimistic for the code’s digital future are confident that V’landys, since coming to the ARLC 12 months ago, now has a greater understanding of the business and the imperative of the game to have a presence in this area.
The ARLC recently locked away the code’s digital investment for the next 12 months, meaning any material reduction in its spend in that area couldn’t happen (if at all) until 2021. By that time, the ARLC will have either completed or be close to executing a new broadcast deal which will inevitably shape the game’s digital investment and footprint in future years.
Clubs anticipate some wind-back of money spent on the content the NRL’s journalists are producing, but believe it’s really part of a phased growth in the code’s digital investment. Perhaps V’landys’ comments around efficiencies point to a reallocation of funds away from content and toward marketing, fan, e-commerce and analytics.
When Grant set it up, his objective was to build a one-on-one direct relationship with fans and provide them with an alternate source of news, other than what appears in mainstream media. Above all, he sought to commercialise this relationship and, ultimately, if necessary, to create tension in broadcast negotiations by being able to stream games direct to fans.
Even Grant’s critics accept that the NRL’s digital plan during the current five-year broadcast deal cycle remains on track.
Grant lost his job because of his commitment to the digital environment. He told club bosses he needed more resources for the digital department and therefore could not meet an earlier commitment to pay them 130% of the salary cap.
The quantum of the investment required was determined by Rebecca Horne after he recruited her from Channel Ten while he was acting in the CEO role. Her business case required significantly more investment than a previous one and led to the club’s revolt and the ARLC walking away from the original MOU with the clubs and eventually Grant’s fall.
Of all the personal views expressed by V’landys at his first press conference, the one most measurable is his promise that the code will do better from broadcasters in the next media rights deal. Income from digital will represent a significant part of extracting that value.
So, while the code’s digital investment was the beginning of the end of the ARLC’s inaugural chair, it will define the future of the incumbent.
Roy Masters is a Sports Columnist for The Sydney Morning Herald.