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Nine secures international cricket rights, Ten gets Big Bash

The Nine Network has secured a deal with the WIN Corporation that will help the TV network ensure it matches rival Ten’s aggressive $500m bid for the cricket rights and retains the important sport franchise it has held for 32 years.

Mumbrella understands the final deal sees the Nine network spending $400m over five years to retain the international cricket rights, with an additional $50m contra advertising deal, while Ten will take a consolation prize in the Big Bash League and domestic cricket for $100m.

The deal is a major rise in the price tag for the sport. Under the current seven year deal Nine pays $45m a year for the sport.

The move is the first big strategic move by new Ten CEO Hamish McLennan who has argued the network needs sports as a means of cross promoting its other content.

“This is a very big day for Nine. It’s been a long and sometimes difficult and complex process and I pay tribute to Bruce Gordon and his team at WIN for really stepping up to the plate, not only on the sale of its major stations but through our new rural affiliation deal which has enabled Nine to achieve a very substantial offset of costs” said David Gyngell CEO of Nine Entertainment.

The news of the Nine deal comes after days of negotiations as the network’s executives worked to secure the approval of its shareholders Apollo Management and Oaktree Capital and also to secure the purchase of the WIN corporation’s Adelaide and Perth television station, as part of a deal to ensure continued national coverage of the sport.

The WIN deal will see Nine purchase the Adelaide station for $140m from Bruce Gordon’s WIN Corporation and secure an option to purchase its Perth station, if the rules preventing any TV network reaching more than 75 per cent reach of the population are scrapped.

Sources have told Mumbrella that the annual increase in the cost of the cricket from $45m a year to $80m will be partially funded by a significant increase in the affiliate fees WIN pays the Nine Network in other regional markets which under the new deal will rise from around 33 per cent to 39 percent. The increase in revenue for Nine could bring in an extra $15m a year, with other savings to come from greater network synergies, although the value of those is yet to be determined.

“The extension of the affiliation arrangements ensures that WIN will continue to broadcast Australia’s best content including Test Cricket, One Day and Twenty20 cricket internationals and National Rugby League,” said Andrew Gordon, executive chairman of WIN.

“WIN, as Australia’s largest commercial television network has never been in better shape and the sale of Channel 9 Adelaide will enable WIN to take advantage of opportunities in a continually evolving medialandscape both in Australia and globally.”

Channel Ten said it was pleased to pick up the Big Bash league. “We are delighted to join forces with Cricket Australia as its exclusive domestic Twenty20 cricket partner and we look forward to a long, successful partnership,” said Ten CEO Hamish McLennan.

“The Twenty20 Big Bash League is a great competition, and TEN and Cricket Australia will make it a major free-to-air television event.

However, analysts have questioned the $80m-$100m price tags, saying it is unlikely to be profitable for either Nine or Ten. “I don’t think either Nine or Ten can make money from it at that price. Nine is in a better position to make money from it, and that’s not to discredit the Ten sales team, but Nine has a very long history with cricket and it’s been a premium product for them for 20 years,” media analyst Steve Allen told Encore Magazine last month.

The Nine Network had a last rights deal with Cricket Australia which allowed it to see and match rival Ten’s offer. With Nine and Ten taking the international and domestic cricket respectively, pay-tv provider Fox Sports which has actively built the Big Bash over the last two years, appears to be locked out.

Under the previous seven year deal, Nine paid $45m a year for a sport which generates an estimate $60m a year in advertising revenue and which has $10m to $20m worth of production costs.

Nic Christensen 

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