Ten’s bid for AFL broadcast rights strengthened by $2.6B Paramount Global investment
Paramount Global stock has stabilised after shooting up by 15% on Tuesday, following a $6.2 billion investment by Berkshire Hathaway, multi-billionaire Warren Buffet’s venture investment firm.
Berkshire bought almost 69 million shares in the company.
Paramount Global, which encompasses recently released streaming platform Paramount+ has exceeded its first quarter 2022 predictions, with total streaming subscribers hitting 62 million in total (40 million of those belonging to Paramount+). Paramount shareholders have lost 27% over the past three years of the stock’s devaluation, inciting speculation surrounding Buffet’s decision to invest in the company.
The television media division of the company also exceeded its 2022 first quarter profit expectations. This year, competing network NBC had secured the rotating rights to the Super Bowl streaming as part of the NFL’s broadcast rights deal that gives NBC, CBS and FOX alternating exclusive coverage rights of the Super Bowl each year.
CBS, a critical body in the Paramount Global media infrastructure, last streamed the Super Bowl in 2021, meaning their 2022 advertising revenue for the total TV Media sector fell by 13%, with a precipitated 4% increase had the network broadcast the Super Bowl.
The hustle to secure the amplified ad revenue attached to exclusive broadcasting rights of sporting final events is mirrored in Ten and Seven West’s Media bidding war for the hotly anticipated AFL Grand Final.
In 2021, the AFL Grand Final generated 3.91 million, with an average national audience of 4.09 million each year.
Ad revenue in the prime TV spot can fetch the network anywhere between $150,000 to $175,000 (or more) per 30-seconds of ad coverage.
Seven West Media managing director and chief executive officer James Warburton said “the [2021] AFL Grand Final was the #1 program of the year,” bolstered by the “11 million users now registered on 7Plus”.
Buffet’s significant investment may now embolden Ten, in tandem with Paramount+, in its bid to reclaim the rights to the AFL from 2025.
Mumbrella previously spoke to media director and GM of Spinach, Ben Willee, who said Ten and Paramount are going to “have a run at it like an 18-year-old in an all-you-can-drink bar”, as he argued the network “hasn’t recovered” after losing the AFL years ago. Ten shared the rights across the 2002-2011 seasons.
Ten and Paramount Plus are jostling with Amazon, Seven and Foxtel to secure the exclusive rights to the footy coverage, which would be split between Ten and streaming platform Paramount+ for all nine games each round.
The current rights deal with Seven and Foxtel is set to deliver the AFL $946 million across 2023 and 2024.
After Buffet’s securing of 11% of the business, Ten may be in a bolstered position for their 2025 bid for rights to the footy’s entire broadcast package.
The investment has given Ten a financial advantage in its efforts to reclaim rights to the nationally loved sport, and would contribute enhanced revenue figures in Paramount’s TV Media sector, where revenue is reported to have consistently dipped 6% year on year.
In late April, heads of the main global streaming players congregated in New York for meetings with AFL executives on the coveted broadcasting rights. AFL chief executive officer Gillon McLachlan, who is stepping down from his role as CEO at the end of the 2022 season, was in talks with Paramount Global chief executive Bob Bakish. The joint bid is reportedly underway, and faces stiff competition from YouTube and Amazon executives, both of whom lined up talks with McLachlan on the same trip.
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topics
AFL
AFL Grand Final
Ben Willee
Berkshire Hathaway
CBS
James Warburton
NBC
Network 10
Paramount
Paramount ANZ
Paramount Global
Seven West
Warren Buffett
Can you explain exactly how this will “embolden” Ten or give them “a financial advantage” to bid more for the AFL???
Berkshire Hathaway bought the shares from another shareholder. The money doesn’t go into the Paramount bank account. They’re still something like $20 billion in debt
Also, they aren’t just bidding for the AFL Grand Final, by the way. They’re bidding for all the AFL rights across the season
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Yes, we are just saying that Paramount stock soared as much as 16% after Warren Buffett’s Berkshire Hathaway revealed a stake in the company. We also just wanted to give a local update on the company here. Thank you for letting us know about the AFL headline, we have since corrected it as it was an error on our end.
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