Rugby Australia’s negotiation of its next broadcast deal has got off to a shaky start with Foxtel reportedly threatening to cut ties with the sport, but the future of the game in this country will depend on the outcome of the new agreement. The outcome will make or break rugby in Australia, which is in danger of becoming a minor sport if administrators cannot secure a lucrative deal with Foxtel or rivals Optus.
The last four years have been a nightmare for Australian rugby with the axing of the Western Force, the sacking of Israel Folau and the lack of on-field success for both the Wallabies and Super Rugby teams, culminating in an unsuccessful World Cup campaign in Japan. RA must negotiate an improved broadcast deal to ensure the viability of the code for the next five years. A bad deal would be another body blow from which the game may not recover.
It is imperative that RA secures a significant increase in broadcast revenue, not just to keep up with the rising costs of administering and growing the game, but to contend with two key issues that threaten its status as a major sport.
Rugby Australia has to find more money – much more – to keep key Wallabies from the clutches of rich clubs in Europe and Japan. Eight members of the Wallabies 2019 World Cup squad – Rory Arnold, Adam Coleman, Sekope Kepu, David Pocock, Bernard Foley, Will Genia, Samu Kerevi and Christian Lealiifano – are heading overseas, while Nic White was selected from English club Exeter, but will return to Australia next year. Some of these players – such as Arnold, Coleman and Kerevi – are in the prime of their careers, but will be lost to Australian rugby.
RA also needs to strike a deal that will financially compensate Super Rugby franchises, who will lose up to 20% of their gate-takings following a reduction in the number of teams after next year. Super Rugby is a precarious business and the loss of two home games per season will place a huge financial burden on teams that are already struggling.
So news of Foxtel’s withdrawal of its offer of $20m a year would have been a major concern for rugby administrators. Of course, it may well be a negotiating tactic from Foxtel. Then again, maybe not. Earlier in the year Foxtel announced it would “cut spending on non-marquee sporting content” after posting a loss of $417m.
Foxtel has been Australian rugby’s principal broadcast partner since the game went professional in 1995. The Rugby Championship (previously the Tri Nations) and Super Rugby were created by Fox Sports for Fox Sports and the pay TV provider has always been very jealous of its exclusivity. The Wallabies are shown on free-to-air TV because of anti-siphoning regulations, but Super Rugby is purely a pay TV product.
But there is another player in the game. Optus is reportedly interested in Australian rugby’s broadcast rights with an offer of $30m a year. If RA called Foxtel’s bluff – assuming they were bluffing – and struck a deal with Optus, they could potentially secure a more lucrative deal, which would possibly solve many problems. But there would be an element of risk in changing broadcast partners. Optus seems to have recovered from the Fifa World Cup debacle, but at least with Foxtel rugby knows what it is getting.
Optus would potentially pay more for rugby’s broadcast rights because it would attract subscribers from Foxtel, damaging their rival. But switching to Optus could also disenfranchise rugby fans who already subscribe to Foxtel and do not wish to change providers.
No matter how much Australia’s broadcast rights increase they will never match the broadcast revenue of European rugby or the corporate power of Japanese rugby. The trick for Australian rugby is to retain as many required and aspiring Wallabies as possible to maintain the competitiveness of the national and Super Rugby teams – and in an ultra-competitive global player market that requires money. Lots of it.
If RA fails to deliver a financial windfall from the next broadcast deal, it will have to consider lowering the 60 Test threshold for overseas-based players to be eligible for the Wallabies to around 30 or even 25 caps. Or make an exemption for required overseas-based players.
Either way, Super Rugby would be severely damaged by any flood of Test standard players to overseas clubs and that in turn could have an adverse effect on the Wallabies. But it is not just the future of the Wallabies and Super Rugby that are at stake, it’s the whole game in this country from the grassroots to the elite level that is threatened. If RA wants to maintain rugby as a major sport, they need to play hardball with the broadcasters and secure the best possible deal before it’s too late.