$1 Billion for next TV rights - forget it!

[morgoth]

The AFL thinks they will get a billion for the next TV deal, well they will be lucky to get the same deal the way things are going!

Today Channel 7 issued a fairly viscious profit warning, profits to half in second part of year with the major compenent being falling advertising revenue. You can bet 9 is in the same boat (10 is one of the worst performing stocks due to a number of profit warnings before it got bad).

Due to the economic downturn Fox is suffering a fall in subscribers so all up allthe networks are struggling.

The economy will get worse before it gets better so I can see the AFL having to scrap Western Sydney and god help those teams without major sponsors locked in. Good news is maybe they let Tassie in as it will not be such a drain on the coffers.

 

[ManWithNoName]

Another factor to consider is that by the time the next Rights deal comes up, it's highly likely the internet will play a MASSIVE part in media. Also there'll be digital multichanneling by then as well. IMO the price won't go up that much at all, it may even drop.

 

[Lensen]

With the carrot of being able to broadcast two more 50,000 viewer drawing games a week into Sydney and SE Qld? Kidding yourself if that's not worth another $300m

 

[damochandler]

the afl are banking on getting a billion dollars for the next tv rights. they need to really get the 2 new teams up and running. carrara isnt up to standard as an afl stadium or even a local gf. they need a stadium for the west sydney side. anz stadium wont draw big crowds

 

[fairdinkum]

With the carrot of being able to broadcast two more 50,000 viewer drawing games a week into Sydney and SE Qld? Kidding yourself if that's not worth another $300m

Uh...

 

[pepsi]

There is no chance the afl will get a billion for the next rights. I think the next agreement will be less than the current 1. The financial crisis is a real worry and advertisements are down across the board, so I cannot see tv networks going crazy and offering huge dollars like they did for this deal.

 

[Tristagi]

With the carrot of being able to broadcast two more 50,000 viewer drawing games a week into Sydney and SE Qld? Kidding yourself if that's not worth another $300m

i dunno mate, those hardcore supporters up in syd don't even go to games, they watch it on tv

 

[morgoth]

With the carrot of being able to broadcast two more 50,000 viewer drawing games a week into Sydney and SE Qld? Kidding yourself if that's not worth another $300m

They don't watch so why would you pay more for it? If anything you pay less as you have to subsidise the loss.

 

[Lensen]

They don't watch so why would you pay more for it? If anything you pay less as you have to subsidise the loss.

I thought it was clear I was joking, and trying (obviuosly unsuccessfully) to point out the futility of a West Sydney and Gold Coast team.

 

[gostk86]

they will..because channel 9 with eddie mccollingwood are desparate for them

 

[Subprime]

An increment similar to the CPI is not outlandish. It would take an increase of just over 5% p.a. to take the 5 year TV rights price from $780m to $1b.

Add to that the extra games (and advertising revenue) from a 9-game round, a 24 round H & A season (as has been proposed) and the positive effect of extra local teams in NSW and QLD and the price should be well over $1b.

Of course the final price will depend on the competitive tension at the bidding table and the state of the economy in two years time.

Those who can accurately predict the latter should spend their time playing the market rather than skiving at BigFooty.

 

[LemmingMaster]

It sounds funny listening to financial advice from a poster by the name of Subprime

 

[grayham]

An increment similar to the CPI is not outlandish. It would take an increase of just over 5% p.a. to take the 5 year TV rights price from $780m to $1b.

Add to that the extra games (and advertising revenue) from a 9-game round, a 24 round H & A season (as has been proposed) and the positive effect of extra local teams in NSW and QLD and the price should be well over $1b.

Of course the final price will depend on the competitive tension at the bidding table and the state of the economy in two years time.

Those who can accurately predict the latter should spend their time playing the market rather than skiving at BigFooty.

This has been done to death, but it all comes down to supply/demand.

Supply: (Counting WS and GC teams)
- 1 more AFL game, probably monday nights
- 1 home game in every major city, every week.

Demand:
- Foxtel need more AFL content to drive subscribers. Unless they can dominate the sporting market, pay TV is dead.
- Digital FTA sub channels, require more content. Channel 10 is setting up its 2nd channel as a sports channel.
- Using digital sub channels into developing markets (eg Sydney) is no longer a cost to the network. (ie main channel can show higher rating show).
- Internet rights and mobile rights much bigger players this time around.

Other sweetners the AFL could offer:
- Night/Twighlight Grand final.
- 2 friday night games. - Network has choice.
- Scheduling only done 6 weeks out. Like NRL do.

 

[likka]

Depends on the level of competition between the prospective bids.

I thought the $780m figure of the previous deal was way too much, driven mainly by Se7en's intense desire to get the footy back off Nein at all costs. Knowing this Nein and Foxtel inflated their final bid to ensure Se7en paid too much.

Nein has since been sold to penny pinchers, Se7en has started issuing profit downgrades to the market, and the global economic problems will get worse IMO before the next deal is negotiated.

If the AFL can match the previous figure they will be doing very well.

 

[stmookeyj]

And of course 9 paid a lot for the Olympics in 2012.....

 

[RussellEbertHandball]

And of course 9 paid a lot for the Olympics in 2012.....

$110mil USD for the 2010 and 2012 Olympics to be shared with Foxtel wont break the bank.

 

[morgoth]

Still reckon AFL will get the Bill they want?

The group that owns 9 is almost in breach of its debt covenents, 10 is rumoured to be a takeover target for another private equity player and 7, as mentioned has issued profit warnings.

Today we see major names like Moet cancelling their marquees at the Melbourne Cup. Sponsorship and advertising dollars are drying up and it will flow through to the next TV rights.

If you think the credit mess will be sorted out in time, you are dreaming, the damage done will take a long time to mend.

 

[Subprime]

Still reckon AFL will get the Bill they want?

The group that owns 9 is almost in breach of its debt covenents, 10 is rumoured to be a takeover target for another private equity player and 7, as mentioned has issued profit warnings.

Today we see major names like Moet cancelling their marquees at the Melbourne Cup. Sponsorship and advertising dollars are drying up and it will flow through to the next TV rights.

If you think the credit mess will be sorted out in time, you are dreaming, the damage done will take a long time to mend.

In late 2001 the NASDAQ index had gone from a peak of around 5000 to a trough of about 1000, 2 planes flown by fundamentalist hijackers had toppled the twin towers in NYC and Wall Street was in a state of panic. The markets did not bottom until 2003.

Two and a half years later in December 2005 the AFL secured their biggest ever TV deal.

 

[morgoth]

In late 2001 the NASDAQ index had gone from a peak of around 5000 to a trough of about 1000, 2 planes flown by fundamentalist hijackers had toppled the twin towers in NYC and Wall Street was in a state of panic. The markets did not bottom until 2003.

Two and a half years later in December 2005 the AFL secured their biggest ever TV deal.

Ha ha they were storms in a tea cup compared to this! This is a 1 in 100 year financial meltdown. The average punter in Australia does not get it, but they will soon.

You wait until this hits the wider economy. The ASX leads the wider economy by about 12 to 18 months.

 

[snappytom]

i only watch sport if its live,so most of the sport i watch is on foxtel.
FTA will never go live with sport because they cannot manipulate it that way.

If the AFL is happy with dwindling audiences as more people like me turn off delayed sport then they should deal with 7 9 and 10 and get what they deserve.

an extra game a week on 4 hrs delay in perth will not get any audience worth noting.

unless fox get the extra game and not at the expense of the 4 live they show now it will be a fizzer and waste of time.

 

[Professor Knowall]

...If the AFL is happy with dwindling audiences as more people like me turn off delayed sport then they should deal with 7 9 and 10 and get what they deserve.

an extra game a week on 4 hrs delay in perth will not get any audience worth noting.

unless fox get the extra game and not at the expense of the 4 live they show now it will be a fizzer and waste of time.

The AFL will deal with with whoever pays the most $$$$$.

Getting back to the original thread topic - yes, the AFL may not get its $billion for the next TV rights if the market stays bad.

But regardless of the next TV rights amount, be it no increase, or a billion, or whatever, which of course none of us can yet know -

Would the AFL get more $$$$ by having to two new NSW and Qld clubs, compared to not having them in the next TV rights??

This should be the real question here.

 

[grayham]

The AFL will deal with with whoever pays the most $$$$$.

Getting back to the original thread topic - yes, the AFL may not get its $billion for the next TV rights if the market stays bad.

But regardless of the next TV rights amount, be it no increase, or a billion, or whatever, which of course none of us can yet know -

Would the AFL get more $$$$ by having to two new NSW and Qld clubs, compared to not having them in the next TV rights??

This should be the real question here.

The new NSW/QLD clubs are, as the AFL says, 100 year propositions.

They may influence the next rights, but the AFL expects them to influence the 2020, 2030, 2050 TV rights much more.

 

[RussellEbertHandball]

The new NSW/QLD clubs are, as the AFL says, 100 year propositions.

They may influence the next rights, but the AFL expects them to influence the 2020, 2030, 2050 TV rights much more.

Correct the new teams will add bugger all to the 2012-2016 TV deal. They will struggle to be worth 2% of the total package. It's the ones after that that they will make any useful contributions.

 

[morgoth]

Anyone still want to bet against me?

AFL will be lucky to win the same deal next time around, let alone get an increase.

 

[RussellEbertHandball]

Anyone still want to bet against me?

AFL will be lucky to win the same deal next time around, let alone get an increase.

Seeing as an offer wont be made until late 2010 what's the point guessing and betting now?? Guessing now would be like guessing in Oct 2003 what the 2007-11 deal was going to be worth.