Sky TV appears to be in the box seat to secure top-level rugby rights, including the All Blacks, for another five years – at a drastically reduced rate – but fans could yet find some games on a free-to-air channel such as TVNZ or New Zealand Rugby’s own digital platform.
The deal is reportedly worth $85 million a year, well below the existing $111 million annual deal expiring at the end of the year.
Hamish McLennan, chair of REA Group, told Jason Pine that broadcasting deals are the central pillar in terms of driving the game beyond pathways and grassroots.
The challenge, he says, is the balance between free-to-air content and what you keep behind a paywall.
“You know, do you take the money or do you try and ensure that you reach the maximum amount of viewers?”
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the Weekend Sport podcast with Jason Fine
from Newstalks EDB.
Speaker 2 (00:13):
News TALKSB and Weekend Sport. New Zealand and Rugby is
in the throes of negotiating their next broadcast deal. It's
been reported SkyTV's offering eighty five million dollars a year
for the domestic rugby rights from twenty twenty six to
twenty thirty that includes all backs, tests and Super Rugby
Pacific matches, well below the existing one hundred and eleven
million dollar annual deal which expires at the end of
(00:34):
the year. That deal signed before the last Rugby World Cup.
In fact, before the twenty nineteen Rugby World Cup, when
Spark Sport was in the market and chasing broadcast rights
for live sport. That is, of course no longer the case.
Let's bring in Hamish mcclennan, former chair of Rugby Australia,
chairman of digital advertising company Area Group and ARN Australia,
(00:54):
hugely experienced media and marketing executive with an unrivaled understanding
of the changing media landscape as it relates to sport. Hamish,
thanksfull nis your expertise in general terms. First of all,
important broadcast deals for the overall health of a sports
organization like New Zealand rugby.
Speaker 3 (01:13):
It's probably the central pillar in terms of how you
drive the game beyond pathways and grassroots, because that is
the platform in the vehicle which should promote the game.
And if I look at where Rugby and Australia stumbled,
they did an exclusive deal with a pace.
Speaker 4 (01:31):
Av provider in Australia and.
Speaker 3 (01:34):
For twenty years it was behind the paywall, and so
the challenge is you want some free to wear exposure
in my opinion, and if you look at the competitive
landscape here, the AFL and the NRL had probably forty
percent of their coverage on free towar and so participation awareness,
(01:56):
creating personalities out of the game really drove the popularity
of those sports, where rugby probably stuffered a little bit.
So it's something that New Zealand have to consider.
Speaker 2 (02:09):
In fact, that is the key thrust I think to
the entire conversation is the free to wear part of
it because at the moment, as you know, very little
of any of the top rugby is free to wear
over here. How robust are those conversations when pay per
view broadcasters probably don't want any content available on free
to wear.
Speaker 3 (02:27):
Well, New Zealand is a bit different to Australia, so
we have a law called the anti Startening law. So
premium tier one sports have to show certainly like our
tests are on free Aware, but the rest.
Speaker 5 (02:40):
Can sit behind a paywall.
Speaker 3 (02:42):
So for New Zealand, you know, do you take the
money or do you try and ensure that you reach
the maximumount of views? Now aeropian New Zealand is different
because it is these sports where Australia has probably you know,
Sydney has the most competitive winter sports market in the
(03:04):
world if you include soccer. So I personally think some
free toware exposure is important. But you know you're faced
with with n that are you know you've got you've
got to fund the organization. Plus they brought a private
equity a very credible private equity firm, Silver Ake in
as a part owner of the sport. Then they've probably
promised them an uplifting revenue and ultimately they want to
(03:27):
get a return on their capital.
Speaker 2 (03:29):
So what then do you perceive those conversations around the
table to be like, because you're so right, I mean
they're not. Everybody has access to pay per view sport
and you know, many of us grew up, you know,
connecting with the sports we love by watching them on TV.
If that's not available to young people then then you know,
I'm not sure what the future looks like. What do
(03:51):
the conversations around that table generally look like?
Speaker 3 (03:55):
Look, I think you know, private equity typically will work
to a five to ten year horizon, and the administrators
of Rugby and New Zealand.
Speaker 4 (04:04):
Have to take a twenty year of you.
Speaker 3 (04:06):
So the challenge for them is do they how do
they balance the two And the conundrum they've got is
that Sky is really the dominant platform in New Zealand
and with any media right negotiation you need to have
competitive tension. So in Australia, you know, we have you know,
more just because of our scale, more more media organizations
(04:32):
that can.
Speaker 4 (04:32):
Test those sporting rights.
Speaker 3 (04:34):
So if there's no competitive tensions to Sky, they'll try
and drive the price Dad. You know, you're blacks is
the and sort of Rugby is the premium sport on
that platform. But they've got a business to run and
a subscription TV around the world is under pressure because
you've got all the tech giants getting into streaming and
you might have heard that Foxtel in Australia just got
(04:57):
sold to an overseas streaming platform called Dasen or daznes.
So it's changing, it's changing rapidly. The issue is, can
Mark Robinson bring in a competitor like Dazen to provide
that tension to try and keep the value of the
rights up high.
Speaker 2 (05:17):
You know, well, that's certainly what happened last time with
Spark Sport, the now defunct Spark Sport. They were chasing
you know, Live Sport rights got the twenty nineteen Rugby
World Cup and so there was a genuine, a genuine
competitive tension. When there is only one genuine bidder. How
much different do the negotiations become.
Speaker 5 (05:36):
Oh, they're much more difficult.
Speaker 4 (05:38):
There's actually no doubt about that.
Speaker 3 (05:40):
So you know, you know, in blunt terms, if you've
got two or three competing for a property, you know
that's going to be a better big environment if there's
only one platform. You know, if you can save twenty
million on the value of the media rights in New
zeal And, that goes straight to your bottom line.
Speaker 4 (06:01):
And if you're a CEO or a.
Speaker 3 (06:02):
Board you know you've got shareholders, then you look good
if you can do it at your author don't want
to destroy the value of the game. And you know
what I was dealing with when I was at rugby
in Australia was you know, there are whole lot of
legacy issues and I don't want to sound defensive, but
as you as your revenue declines, and broadcast rights are
(06:24):
one of the few leavers that you can pull that
if you get it right, you can you can drive
it incredible value in terms of a when it's obviously money.
But then if your revenue is going south, then you've
got less to put into grassroots or pay the top players.
So so you know, over the decades we've lost in
Australia a lot of really good players overseas, and so
(06:48):
if you can't if you're competing against French and English
and Japanese clubs who paying top dollar and you don't
have that money in the kiddie, then it's going to
be very challenging.
Speaker 2 (06:58):
Indeed, indeed, the streaming side of things, do you perceive
that that will be something that that happens more and
more in the short term or are we more likely
to see the likes of a traditional broadcast I like
Sky Sport continue to have the rights to rugby here, so.
Speaker 3 (07:18):
You know, Facebook are waiting into various sports around the
world and you're going to it's very hard for the
traditional players.
Speaker 4 (07:28):
To compete against the tech platforms because they've just got.
Speaker 3 (07:31):
A completely different model. So it is it is challenging,
and perhaps that's one of the reasons why fox Tell
thought that they should consolidate with daesn't Overseays.
Speaker 5 (07:45):
So in the short.
Speaker 3 (07:48):
Term, I mean, obviously Sky will do everything to hang
on to those key sports. And then as the new
entrants come in, you know, the sporting coda ends that
I have to reconcile a new player coming in with
the audience that they can deliver.
Speaker 5 (08:02):
So it's a bit of a Rubik's que.
Speaker 4 (08:05):
It's always hard.
Speaker 3 (08:05):
Because if you transition to another player, can they delive
you the same sort of numbers? Because what then sits
behind the numbers are the eyeballs, And.
Speaker 4 (08:16):
You've got sponsors who are sort.
Speaker 5 (08:18):
Of demanding and wanting growth.
Speaker 3 (08:19):
And they want to know that they're hitting the maximum
amount of people and you've got as many viewers watching
the game so that the sport remains relevant Again, new
Zealand's different because it's not as competitive from a media
point of view, and rugby is the number one sport.
Speaker 4 (08:35):
But there are all things that you've got to consider.
Speaker 2 (08:37):
You mentioned the anti sophening legislation before in Australia. Does
that work well in your view?
Speaker 3 (08:44):
So that's a great question, and it creates divided opinion,
and I think it's actually a good thing because it
sort of puts a ring fence around certain premium sports
so that it doesn't matter if you're rich or poor.
You can get it on free to wear, and our
free toware industry in Australia, as challenged as it is,
(09:05):
is incredibly high quality and so it just means that
if you can't afford a subscription to a PayTV service,
you get to watch premium sports, and that includes parts
of the Olympics and other big events.
Speaker 5 (09:19):
Around the world.
Speaker 3 (09:20):
So there are a lot of people who say to they, look,
you know, in a fully competitive environment, you should just
make it a free for all, and some sports like
it because they think they can drive the maximum dollar
value for the sport, and there is currency in that argument.
Speaker 4 (09:38):
I don't deny it, but I'm of the view that I.
Speaker 3 (09:40):
Think in some instances the antisasseny law is beneficial.
Speaker 2 (09:46):
And can you see a time Hamish where New Zealand
rugby or any national rugby union takes their broadcasting in
house and sells direct to consumer.
Speaker 4 (09:56):
Yeah.
Speaker 3 (09:56):
Absolutely, So there are sports here like supercars, they eight
supercars that do it all in house, like the tennis
in Australia, producer and then they on sell the broadcast.
But if you look at the traditional word, the existing model,
it's pretty good for the sport because you know, if
you negotiate well and you get a good check size,
(10:18):
then they do all the production and so you know,
I think for some sports, you know, ones like rugby,
where you've got it being played all over the country,
you don't have to worry about the production side of it.
Speaker 2 (10:33):
It's such a fascinating topic, cam As you've lent us
some great expertise, lots for our listeners to think about
and to chat about. Thank you so much for joining
us across New Zealand today.
Speaker 1 (10:42):
Cheers, Thank you for more from Weekend Sport with Jason Fine.
Listen live to news Talk ZB weekends from midday or
follow the podcast on iHeartRadio.
You're listening to the Weekend Sport podcast with Jason Fine
from Newstalks EDB.
Speaker 2 (00:13):
News TALKSB and Weekend Sport. New Zealand and Rugby is
in the throes of negotiating their next broadcast deal. It's
been reported SkyTV's offering eighty five million dollars a year
for the domestic rugby rights from twenty twenty six to
twenty thirty that includes all backs, tests and Super Rugby
Pacific matches, well below the existing one hundred and eleven
million dollar annual deal which expires at the end of
(00:34):
the year. That deal signed before the last Rugby World Cup.
In fact, before the twenty nineteen Rugby World Cup, when
Spark Sport was in the market and chasing broadcast rights
for live sport. That is, of course no longer the case.
Let's bring in Hamish mcclennan, former chair of Rugby Australia,
chairman of digital advertising company Area Group and ARN Australia,
(00:54):
hugely experienced media and marketing executive with an unrivaled understanding
of the changing media landscape as it relates to sport. Hamish,
thanksfull nis your expertise in general terms. First of all,
important broadcast deals for the overall health of a sports
organization like New Zealand rugby.
Speaker 3 (01:13):
It's probably the central pillar in terms of how you
drive the game beyond pathways and grassroots, because that is
the platform in the vehicle which should promote the game.
And if I look at where Rugby and Australia stumbled,
they did an exclusive deal with a pace.
Speaker 4 (01:31):
Av provider in Australia and.
Speaker 3 (01:34):
For twenty years it was behind the paywall, and so
the challenge is you want some free to wear exposure
in my opinion, and if you look at the competitive
landscape here, the AFL and the NRL had probably forty
percent of their coverage on free towar and so participation awareness,
(01:56):
creating personalities out of the game really drove the popularity
of those sports, where rugby probably stuffered a little bit.
So it's something that New Zealand have to consider.
Speaker 2 (02:09):
In fact, that is the key thrust I think to
the entire conversation is the free to wear part of
it because at the moment, as you know, very little
of any of the top rugby is free to wear
over here. How robust are those conversations when pay per
view broadcasters probably don't want any content available on free
to wear.
Speaker 3 (02:27):
Well, New Zealand is a bit different to Australia, so
we have a law called the anti Startening law. So
premium tier one sports have to show certainly like our
tests are on free Aware, but the rest.
Speaker 5 (02:40):
Can sit behind a paywall.
Speaker 3 (02:42):
So for New Zealand, you know, do you take the
money or do you try and ensure that you reach
the maximumount of views? Now aeropian New Zealand is different
because it is these sports where Australia has probably you know,
Sydney has the most competitive winter sports market in the
(03:04):
world if you include soccer. So I personally think some
free toware exposure is important. But you know you're faced
with with n that are you know you've got you've
got to fund the organization. Plus they brought a private
equity a very credible private equity firm, Silver Ake in
as a part owner of the sport. Then they've probably
promised them an uplifting revenue and ultimately they want to
(03:27):
get a return on their capital.
Speaker 2 (03:29):
So what then do you perceive those conversations around the
table to be like, because you're so right, I mean
they're not. Everybody has access to pay per view sport
and you know, many of us grew up, you know,
connecting with the sports we love by watching them on TV.
If that's not available to young people then then you know,
I'm not sure what the future looks like. What do
(03:51):
the conversations around that table generally look like?
Speaker 3 (03:55):
Look, I think you know, private equity typically will work
to a five to ten year horizon, and the administrators
of Rugby and New Zealand.
Speaker 4 (04:04):
Have to take a twenty year of you.
Speaker 3 (04:06):
So the challenge for them is do they how do
they balance the two And the conundrum they've got is
that Sky is really the dominant platform in New Zealand
and with any media right negotiation you need to have
competitive tension. So in Australia, you know, we have you know,
more just because of our scale, more more media organizations
(04:32):
that can.
Speaker 4 (04:32):
Test those sporting rights.
Speaker 3 (04:34):
So if there's no competitive tensions to Sky, they'll try
and drive the price Dad. You know, you're blacks is
the and sort of Rugby is the premium sport on
that platform. But they've got a business to run and
a subscription TV around the world is under pressure because
you've got all the tech giants getting into streaming and
you might have heard that Foxtel in Australia just got
(04:57):
sold to an overseas streaming platform called Dasen or daznes.
So it's changing, it's changing rapidly. The issue is, can
Mark Robinson bring in a competitor like Dazen to provide
that tension to try and keep the value of the
rights up high.
Speaker 2 (05:17):
You know, well, that's certainly what happened last time with
Spark Sport, the now defunct Spark Sport. They were chasing
you know, Live Sport rights got the twenty nineteen Rugby
World Cup and so there was a genuine, a genuine
competitive tension. When there is only one genuine bidder. How
much different do the negotiations become.
Speaker 5 (05:36):
Oh, they're much more difficult.
Speaker 4 (05:38):
There's actually no doubt about that.
Speaker 3 (05:40):
So you know, you know, in blunt terms, if you've
got two or three competing for a property, you know
that's going to be a better big environment if there's
only one platform. You know, if you can save twenty
million on the value of the media rights in New
zeal And, that goes straight to your bottom line.
Speaker 4 (06:01):
And if you're a CEO or a.
Speaker 3 (06:02):
Board you know you've got shareholders, then you look good
if you can do it at your author don't want
to destroy the value of the game. And you know
what I was dealing with when I was at rugby
in Australia was you know, there are whole lot of
legacy issues and I don't want to sound defensive, but
as you as your revenue declines, and broadcast rights are
(06:24):
one of the few leavers that you can pull that
if you get it right, you can you can drive
it incredible value in terms of a when it's obviously money.
But then if your revenue is going south, then you've
got less to put into grassroots or pay the top players.
So so you know, over the decades we've lost in
Australia a lot of really good players overseas, and so
(06:48):
if you can't if you're competing against French and English
and Japanese clubs who paying top dollar and you don't
have that money in the kiddie, then it's going to
be very challenging.
Speaker 2 (06:58):
Indeed, indeed, the streaming side of things, do you perceive
that that will be something that that happens more and
more in the short term or are we more likely
to see the likes of a traditional broadcast I like
Sky Sport continue to have the rights to rugby here, so.
Speaker 3 (07:18):
You know, Facebook are waiting into various sports around the
world and you're going to it's very hard for the
traditional players.
Speaker 4 (07:28):
To compete against the tech platforms because they've just got.
Speaker 3 (07:31):
A completely different model. So it is it is challenging,
and perhaps that's one of the reasons why fox Tell
thought that they should consolidate with daesn't Overseays.
Speaker 5 (07:45):
So in the short.
Speaker 3 (07:48):
Term, I mean, obviously Sky will do everything to hang
on to those key sports. And then as the new
entrants come in, you know, the sporting coda ends that
I have to reconcile a new player coming in with
the audience that they can deliver.
Speaker 5 (08:02):
So it's a bit of a Rubik's que.
Speaker 4 (08:05):
It's always hard.
Speaker 3 (08:05):
Because if you transition to another player, can they delive
you the same sort of numbers? Because what then sits
behind the numbers are the eyeballs, And.
Speaker 4 (08:16):
You've got sponsors who are sort.
Speaker 5 (08:18):
Of demanding and wanting growth.
Speaker 3 (08:19):
And they want to know that they're hitting the maximum
amount of people and you've got as many viewers watching
the game so that the sport remains relevant Again, new
Zealand's different because it's not as competitive from a media
point of view, and rugby is the number one sport.
Speaker 4 (08:35):
But there are all things that you've got to consider.
Speaker 2 (08:37):
You mentioned the anti sophening legislation before in Australia. Does
that work well in your view?
Speaker 3 (08:44):
So that's a great question, and it creates divided opinion,
and I think it's actually a good thing because it
sort of puts a ring fence around certain premium sports
so that it doesn't matter if you're rich or poor.
You can get it on free to wear, and our
free toware industry in Australia, as challenged as it is,
(09:05):
is incredibly high quality and so it just means that
if you can't afford a subscription to a PayTV service,
you get to watch premium sports, and that includes parts
of the Olympics and other big events.
Speaker 5 (09:19):
Around the world.
Speaker 3 (09:20):
So there are a lot of people who say to they, look,
you know, in a fully competitive environment, you should just
make it a free for all, and some sports like
it because they think they can drive the maximum dollar
value for the sport, and there is currency in that argument.
Speaker 4 (09:38):
I don't deny it, but I'm of the view that I.
Speaker 3 (09:40):
Think in some instances the antisasseny law is beneficial.
Speaker 2 (09:46):
And can you see a time Hamish where New Zealand
rugby or any national rugby union takes their broadcasting in
house and sells direct to consumer.
Speaker 4 (09:56):
Yeah.
Speaker 3 (09:56):
Absolutely, So there are sports here like supercars, they eight
supercars that do it all in house, like the tennis
in Australia, producer and then they on sell the broadcast.
But if you look at the traditional word, the existing model,
it's pretty good for the sport because you know, if
you negotiate well and you get a good check size,
(10:18):
then they do all the production and so you know,
I think for some sports, you know, ones like rugby,
where you've got it being played all over the country,
you don't have to worry about the production side of it.
Speaker 2 (10:33):
It's such a fascinating topic, cam As you've lent us
some great expertise, lots for our listeners to think about
and to chat about. Thank you so much for joining
us across New Zealand today.
Speaker 1 (10:42):
Cheers, Thank you for more from Weekend Sport with Jason Fine.
Listen live to news Talk ZB weekends from midday or
follow the podcast on iHeartRadio.
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