While the value of the reach in that offer is hard to calculate, the ability for more people to watch the sport could have an effect on where and how Rugby Australia could make money outside of broadcast rights, such as sponsorships.
A deal with Nine would give Rugby Australia the free-to-air coverage it has longed for, with one Super Rugby match likely on a Saturday each week of the season.
Nine’s NRL coverage runs across Thursday, Friday and Sunday, meaning there would not be a clash between the two rugby codes.
Wallabies matches would also likely be on Nine – usually on Saturday night – while the Super Rugby season and Wallabies matches could go to its subscription video on-demand service Stan.
Nine owns The Australian Financial Review.
However, a deal with Foxtel would guarantee slightly more money upfront for Rugby Australia, at a time when it is looking to rebuild.
Sports taking cuts on deals
Major sports in Australia, such as the NRL and AFL, have taken discounts on their rights fees, sparked by the COVID-19 pandemic, but have extended those discounts into later years.
The Sydney Morning Herald reported Nine offered about $30 million a year in cash and contra (free advertising), below a reported Foxtel bid of between $35 million to $40 million.
Network Ten’s bid for Wallabies matches is believed to be attached to Foxtel’s bid.
Sources indicated Rugby Australia would still need to find more capital on top of whichever rights bid it selects.
Rights fees globally have been under pressure after prices ballooned over the past decade, and sports have yet to transition to a new model of funding.
If Rugby Australia can be one of the first to transition to a new monetisation model, where broadcast rights are important but are used to help grow other sources of revenue, it could put the sport in a better position going forward.
There have been many private equity firms across the globe canvassing investments in sports leagues.
CVC Capital Partners has been in prolonged discussions for a £300 million ($540 million) stake in the Six Nations rugby tournament, while CVC and Bain have been working on rival deals in relation to Italy’s Serie A.
This all points to an investment view that sport may be at a dip in the cycle of its value, but that there could be significant value if a potential new model is successful, so an investment at this point could be worth significantly more in five to 10 years.
At the virtual Asia-Pacific Video Operators Summit last month, Foxtel chief executive Patrick Delany said the pay TV broadcaster was focused on being more disciplined in its spending on sport and didn’t believe there was room for five winter sports.
“So we are now quite fearless of losing a sport,” he said. “If a sport is asking too much money and we can’t make it work, and someone else can, well good luck to them.
“We can see quite clearly the sports that are working … I want more of the NRL. Our relationship with the AFL is really fabulous. I want more AFL.
“The motorsports are going well for us, and we like cricket. I think cricket is going to have a tough season ahead and we will work through it with them.
“But they are really the tier-one sports and the rest are going to have to adjust. We are there always to back sports fans, but there is going to have to be some adjustment in the market.”