Broadcast talks aimed at bringing back bucks
The New Zealand Rugby Union's major objective this year is to boost revenues from its broadcast deal with Sky Television.
NZRU chief executive Steve Tew revealed to the Sunday Star-Times this week that combined broadcast deals made up 40 per cent of annual revenue.
Sponsorship contributed around 30 per cent with gate takings, licensing and other commercial arrangements making up the rest.
Based on last year's annual result announced this week, which placed revenue at $117 million, annual income from broadcast deals totals close to $47m.
That significant sum is crucial to the NZRU's financial stability.
Sky is the major broadcast partner of the NZRU, and the deal supports all levels of New Zealand rugby.
The NZRU's current five-year agreement with Sky expires at the end of 2015 but the organisations will be locked in negotiations this year to strike a new agreement.
"Broadcasting is roughly 40 per cent of our income," Tew said. "Like any organisation, negotiating that amount of revenue for the next three, four or five years … it's an important piece of work. We put a lot of preparation into it last year and we've got a major focus on it this year."
Tew was reluctant to be drawn on specific increases but he pointed strongly to the rise in competition from digital broadcasters.
Although New Zealand has a significantly smaller market, Tew also highlighted recent overseas deals, which dwarf earnings here. In Australia the NRL pulls in NZ$1.114 billion over five years, and the AFL collects NZ$1.362b over the same period. And in England, the Premier League banks around NZ$5.884b for its three-year broadcast agreement.
"We're not going to talk about numbers because that's unwise but we are very mindful of what's gone on in the broadcast market around the world," Tew said. "There's been some very significant deals done - a huge uplift in the value of broadcast content - in the last three years.
"We've watched with considerable interest what Telecom have been saying and the development of Coliseum [Sports Media]."
Sky chief executive John Fellet and director of sports content Richard Last declined to comment. A Sky spokesperson said they did not want to inflate interest in negotiations.
In addition to the domestic rugby competition and All Blacks home tests in June, finalising Super Rugby expansion will be a key focus for overall broadcast revenue.
The last five-year Sanzar broadcast deal, where revenue was evenly spilt, was worth $615m for the three nations, and was 35 per cent higher than the previous agreement with News Corp.
"One part of it is getting the competition structure right. The second part is selling the content those competitions provide," Tew said.
A sixth South African team and a side from Argentina are expected to feature in an 18-team Super Rugby competition in 2016. The Star-Times understands a proposed team from Europe will need around $10m to mount a successful bid.
"The content is rich, now we have to sell it and make sure it's delivered to our fans the way they want it," Tew said. "It all happens this year."
Sunday Star Times