Tuesday June 16 4.05pm: Updated story, with comment from Google. Please note the correction at the bottom of story.
The NRL has approached online behemoth Google about lodging a potentially multi-billion dollar bid for the broadcast rights for the code.*
Media buyers have confirmed they are aware of talks between the parties which, due to anti-siphoning laws, would have to see the rights sold to Google, for use on its video platform Youtube, but then on-sold with individual NRL matches split across the TV networks in order to comply with legislation, requiring games to be shown on free-to-air.
One senior media buyer with knowledge of the confidential talks told Mumbrella: “Google buying the rights, or even discussing buying the rights is interesting, because it declares their long term intention of distribution of live games through over the top (OTT) content.”
A spokesman for Google this afternoon confirmed recent talksm but declined to be drawn on the detail, saying: “From time to time we do talk to organisations about what they might do in the online world.”
The NRL also issued a statement yesterday declaring: “The NRL is talking to a range of parties about broadcast rights but we will not be commenting further while the process is under way.”
The NRL is rumoured to be seeking around a $1.5bn price tag for the rights, which if the online giant was successful would give them the ability to stream live games on its online video streaming platform Youtube. Telstra currently has the digital rights for the code.
Google has increasingly shown a willingness to bid for sporting rights. In 2013 it made a deal for the online broadcast of All Blacks games internationally and it has also previously signed deals to broadcast online the Twenty20 Indian Premier League competition.
All media buyers contacted declined to comment, on the record, due to their commercial relationships with Google and the TV networks but another senior media buyer with knowledge of the talks said: “It would be huge if Google entered the fray and given the financial position of some of the TV networks on-selling/splitting the rights could work in their favour.”
Many buyers also noted that having the NRL on Youtube would help the online giant in its bid to be seen as a premium broadcast platform, and charge a higher advertising rate on its online videos.
Multiple sources have sought to play down the likelihood of the online giant entering the fray this time around, but have also expressed concern about the potential for it to be used by the code as a “stalking horse” to force the networks to up their price or encourage the networks to launch a joint bid with the likes of Seven and Ten.
Media buyers have noted the potential for a network under a split rights scenario, to get “footy nirvana” of AFL in the Southern states and NRL in the Northern states. The AFL would also be watching the potential to split rights with interest.
“Given their declining audiences overall I think there would be a number of TV execs who would do the maths on what could be footy nirvana for the networks,” said one agency boss.
In recent weeks attention has been on the financial state of all the TV networks. Yesterday pay-TV operator Foxtel bought 15 per cent of the cash strapped Ten Network, with the deal coming only a week after a major collapse in the Nine share price following an earnings downgrade.
In the wake of events at Nine, Seven felt the need to issue a statement reassuring the market about its earnings.
“Under the anti-siphoning laws Google can’t keep all the rights but how it would work is that they would have to split the rights across the free-to-air networks,” said a buyer, who noted that News Corp Australia has previously held the rights but then on-sold them to the FTA TV networks.
Another media buyer noted: “This raises questions about whether the TV networks can or can’t afford these kinds of enormous sports franchises in the future and have to divide them up between them.
“I think the other key thing to this is that with increased shareholder pressure on return on investment for all the TV networks the question is what does this mean for them financially – does their financial structures force them into broader, cheaper, less diverse programming.”
*Correction a previous version of this story stated the AFL was the sporting code involved. This was incorrect it is now understood that it was the NRL that approached Google.