As reported by the Herald last month, Seven West Media chief executive James Warburton, who has a strong business relationship with V’landys, has been in dialogue with NRL powerbrokers about pursuing the rights to rugby league.
Marks, speaking with analysts and investors as part of the Macquarie Australia Conference 2020 on Tuesday afternoon, gave the strongest indication yet that Nine, the publisher of this masthead, could relinquish its rights to rugby league, although such a move could involve some legal wrangling.
“It’s not a given that NRL has to be part of our future,” Marks said on the conference call. “It has to just pay its way like all of our content does, and if it doesn’t, well … again, we are less reliant on that as a revenue source.”
Seven is financially challenged, but any rugby league offering in partnership with Fox would come at a discounted rate given Nine currently pays an exclusivity premium for three State of Origin matches and the grand final.
Foxtel is also struggling financially, although it may be in a position to invest more in a discounted rugby league product, given the uncertainty over its existing deals with Football Federation Australia and Rugby Australia, which are each worth $60m per annum.
Foxtel currently pays $190m-a-year for all 24 regular season rounds, plus eight finals matches, while Nine was due to pay $118m in 2020 for 75 simulcast regular season games, the finals series as well as exclusive rights to the Origin series and the decider.
The NRL remains at loggerheads with both broadcasters over the value of the sport – in a reduced 2020 season and going forward into future years – although sources with knowledge of the negotiations suggest Foxtel could be willing to ink a standalone deal for the 2020 season as early as this week.
Nine, however, is still playing hardball, with Marks saying on Tuesday: “COVID has changed how you need to consider sports rights and evaluation of sports rights for the future because if we don’t take that change now like we are in all other aspects of our business and we wait until the contract expires in two years … everyone’s in for a rude shock in two years.
“Now’s the time when we need to make the changes necessary to make these sports rights more sustainable. The future of our businesses is in aggregated video consumption. We’re a business that actually is now less reliant on live sport and the reason for a lot of sport and its being was its volume contribution to free-to-air advertising.”
Sources close to the negotiations have told the Herald that even if Nine remains as the NRL’s free-to-air rights holder, Fox is pushing for simulcast rights to the Origin series and the grand final, which would help Marks drive his part of the cost down further.
The Herald last week reported Nine wants to pay $28m less than the $118m it was due to pay in 2020, but is now seeking a further reduction as part of the company’s reassessment of the value of live sport. In return, Nine is willing to provide the NRL with the long-term security of an extended rights deal until the end of 2025, an additional three years on top of the current arrangement that expires at the end of 2022.
Marks also confirmed Nine was interested in taking over the NRL’s digital arm, which it believes runs in competition to the network.
“The rationale was you’re spending a lot of money in the NRL on your own digital team, but we’ve got a digital team and Fox Sports has a digital team,” he said.
“Surely it would be better if we just relied on what the broadcasters were already doing rather than going into competition and creating a whole other cost base on top of what already exists. We know what the NRL needs, which is a direct communication with their fan base.
“That can be facilitated through Nine and through Fox Sports and by us sort of supporting the nrl.com website. We can do that a lot more cost effectively than they can.”
Michael Chammas is a sports reporter with The Sydney Morning Herald
Zoe Samios is a media and telecommunications reporter at The Sydney Morning Herald and The Age.