V’Landys deals early

BY DAN

In the same week that he reportedly engineered the removal of the only somewhat competent executive the National Rugby League had at it’s disposal, Peter V’Landys has reportedly agreed to a three-year extension for less money that the current deal with Channel 9 and Fox Sports.

V’Landys has seen a difficult short-term landscape where the NRL has to take on debt to survive – like literally every other organisation in the world – and taken the certainty of less money into the future in exchange for the broadcasters agreeing to do what they were contracted to do already.

It was not hard to see this coming. As I said yesterday:

I’m almost certain V’Landys will negotiate a longer broadcasting deal with Channel 9 that will return power to them to treat the game as their personal fiefdom at a fraction of the cost Greenberg had secured.

fuckn me ay.

The best reading of V’Landys’ deal is based on finding certainty at the expense of development or money. Extending now may make sense to maximise what may be a more difficult market as regular pathways to watching change. Get the broadcasters committed over the next six years, allow them to prove they can expand the market for the game while the world changes.

It makes a degree of sense if they maintain control of the digital arm of the game. If NRL uses the digital rights smartly, then an extra three years is perhaps a strategic nod to the idea that terrestrial television might not exist long beyond that, and they need to get as much of that money now, while supporting Channel 9 and Fox’s medium-term viability, and a commitment to supporting the game by taking a little less from them.

That rose-coloured view doesn’t account for the market that currently exists for rugby league and that is likely to exist in the near future. However it is presented, rugby league is the biggest thing on television. The State of Origin and the grand final are always among the top 5 highest rating shows on television. Not in sports, but in everything. If it can find a way to squeeze more advertising into the game (cricket has an ad every 3 minutes, AFL every time someone kicks goal…hello quarters?) then rugby league is essentially the biggest deal on TV. Even as regular television is phased out, demand for live sport is hardly likely to cease to exist. Whatever market exists for it in nearly six years time is going to be set relative to the existing one, and however you want to paint it, V’Landys just lowered it.

It also seems naive to me to think that Channel 9 is capable of promoting the game and expanding it’s influence. The company is a week away from taking an unprecedented (and inaccurate) attack on the NRL. That’s not how you help build a product. Expecting it to expand the reach of the game is a stretch when you consider it’s only a few years since Friday games were not shown live to fit in Don fucking Burke. In critical expansion markets channel 9 begrudgingly shows NRL on its outer channels, and dumps games as soon as they end. It has by my count the same amount of AFL shows on its network as NRL shows, despite only having the rights to one of those. You can almost guarantee this means an extra Queensland team in the next rights deal, but similarly say goodbye to any idea of expansion beyond league’s current boundaries.

Was there another option? Of course. There was no pressure to do a deal now. Channel 9 may have blustered about not showing league, but were hardly going to sacrifice having something to put on television because of their faux-outrage over how the NRL was administered (at less cost as a percentage of revenue than Cricket Australia, and probably Channel 9). While seeing out the current deal the NRL could have actually done their due-diligence and found out what the value of the competition was on the open market. Given Channel 7 had already expressed interest, Fox’s survival depends on getting NRL rights, and Channel 10 put together an offer that was broadly equivalent to Channel 9’s during the last negotiation, it’s hard for me to believe no other pathway was available, now or in the future. This doesn’t even account for streaming platforms like Netflix, Amazon and the like that would salivate over the opportunity to get involved in providing live sport in the near future. It’s hard for me to think that this was the the best combination of value for the league. But the NRL took it as soon as it was offered.

Now we’re stuck with a broadcaster over the long-term that held league over a barrel when it suited them. A broadcaster that claimed NRL HQ was more interested in getting involved in the politics of the NRL than actually building an institutional partnership. A broadcaster that has in the past stood in the way of development of rugby league at the expense of gardening. This is the future V’Landys chose for us.

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