Nine rules itself out of AFL deal as network concedes rights packages will continue to rise

Ian Paterson, Mumbrella

Ian Paterson

Nine has effectively ruled itself out of any bid to add AFL to its sporting line-up with the network revealing there “wasn’t the opportunity” to strike a deal it was happy with.

Ian Paterson, managing director of Nine’s Melbourne operation GTV9, admitted he “loved the idea” of getting involved with the sport. But he appeared to end any speculation that Nine would look to bid for the one game per round News Corp has the rights to on-sell.

Appearing on a panel at the Mumbrella Sports Marketing Summit in Melbourne yesterday, Paterson was asked if Nine was willing to do a deal with News Corp to pick up an on-sold game, which formed part of last month’s $2.5b deal with Seven and News-owned Fox Sports.

“Not at the moment,” he said, adding it would not be “romanced” by the idea of adding a sport it has not been involved with before.

“We are really interested in the idea of AFL, particularly me as the MD of the business here in Melbourne. We love the idea of getting involved but it’s not as simple as that.”

He said Nine was “only ever going to be a minnow” in comparison to those who have been the major rights holders, and argued “you have to find an angle on something that is relevant to our business”.

“We’ve got interests of course not just here in Melbourne, but Adelaide and Perth and you are talking AFL markets,” he said. “But there wasn’t the opportunity, put it that way, to secure something that we were satisfied with and that’s where it started and finished.”

There has been speculation Nine might acquire a live AFL match from News, which could be in a deal as part of an exchange for one of its NRL games.

Nine, which last month retained the rights to broadcast the NRL, said it was “under no illusions” that it will need to stump up more than the recent $185m-a-year deal it struck when the rights are next negotiated.

“We are a dynamic business, some may say an old or mature medium, but it’s important for us to stay relevant and we see sport as a critical part of that,” Paterson said. “And it’s a matter of not just being relevant through broadcast television but through the acquisition of digital rights.

“It sounds like a lot of money but we spend a lot of money trying to make the decisions based on what we think people are going to watch.

“In isolation there aren’t too many sports rights packages that you could point to and say we make money out of that. But you have to consider the direct and indirect benefits of having a property like that which attracts the numbers of people who watch each and every week.”

He said sport was used not only to attract advertisers in “real time” but was a platform to showcase other programs on the network.

Paterson described sport as one of the remaining draw cards for viewers in an environment where TV audiences are generally falling.

“We under no illusions that in the future the cost of acquiring rights will probably go up,” he said. “We see in free-to-air TV the decline in audiences, particularly around movies or anything that is serialised, whether it’s comedy or drama.

“We are not competing against each other anymore as much as we are competing against subscription video on demand. So the amount of money we are putting against certain things is where we think we can leverage our best commercial result and also satisfy an audience.”

He listed sport, news and current affairs, Australian drama and – “love it or hate it” – reality TV as key programs that still attract audiences.

“It wasn’t so long ago when eight of the top 10 most watched programs during the year were serialised product coming out of the US,” the Nine executive said. “There wasn’t one in the top 40 last year but I think 18 out of top 40 most watched programs were sports programs.”

Paterson stressed the importance of not only securing the TV broadcast rights but the digital rights, stressing the days of only linear delivery of events were over.

“It’s about how else can we touch both the commercial partner and the person who watches through other devices and formats. That is is why with the latest deal it was really important to secure the digital rights.

“Those streaming rights are important for us because….it’s not just about putting commercial insertions into packages.

“It’s about a touch point that allows people to consume content that we make beyond the broadcast on a Sunday afternoon or a Friday or Saturday night.

“To be relevant in the future, free-to-air businesses need to explore other ways of getting to the customer.”

Asked about the possibility of free-to-air networks losing the protection of anti-siphoning, Paterson suggested there would probably be little political appetite for legislative change.

“Free-to-air gets a bad rub out of any take on anti-siphoning,” he said. “Anti-siphoning doesn’t protect us so much as it protects the viewer.

“If anti-siphoning legislation was relaxed you’d have to pay for things that you get to watch for free, so it’s important to retain free access.

“It’s a political thing and politics is often about popularity. If the Government changes legislation which means two thirds of households who don’t have paid TV in this country need to subscribe to watch the kinds of sports we are talking about, then it would probably be unpopular to say the least.

“But it’s not something where we sit on our hands and think nothing is going to change. We lobby for a position that sees us retain and keep that list in tact through legislation.”

Steve Jones


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