NBN Management Urge Google To Become An ISP & Bid For Sports Rights
According to one executive involved in the discussions the NBN has been urging parties such as Google and Apple to consider bidding for TV sporting rights with the content distributed via the new NBN network.
The move comes as NBN management look for additional partners in an effort to generate revenue that was initially built into their budgets for the fibre network.
The move by NBN management has been welcomed by both the AFL and NRL codes as it delivers an expanded group of bidders for sports rights at a time when free to air TV stations are struggling to hold onto market share and advertisers.
Ten Network boss Hamish McLennan has described rumblings of Google making a bid for AFL or NRL sports rights as “10 out of 10 scary” as the week-old $1.2 billion MCN-Ten Network advertising joint venture declared an all-out assault on Google, Facebook and other hungry online video networks according to Fairfax Media.
In a joint interview after inking the proposed $1.2 billion advertising sales joint venture last week between Ten and Foxtel, Mr McLennan and Multi Channel Network chief executive Anthony Fitzgerald said the new free-to-air and pay TV alliance would simultaneously leapfrog current broadcast TV turf wars and counter rapidly emerging competitors in the online video sector.
The Financial Review claims that the AFL and NRL are both in the market for huge new broadcast deals, with each set to reap somewhere between $1.5 billion to $2 billion for five-year contracts.
Talks are expected to formally heat up in the second half of the season, after several media and football executives take midwinter holidays, with both the AFL and NRL hopeful of resolving new deals by Christmas.
One senior executive who has met with NBN management and has been approached by the sporting codes said.
“NBN management are talking to anyone who could be interested in becoming an ISP. They range from utility Companies to retailers to content providers. I doubt whether Google, Netflix or any third party content provider is going to put up over $1.2 Billion for the rights to a sporting code. It is far too complicated a process and a risk which they don’t need to take”.
They added” Netflix is not going to do it and Fetch TV is not going to do it so that basically leaves Google and possibly Apple who while they have the money do not have an appetite for sport”.
“The outsiders could be a Telstra or Optus. BT in the UK has bid for football sporting rights and they could do the same”.
“There’s no doubt [the football codes] are talking to everyone but ultimately what path they go down will come down to cold hard economics,” said one digital media company executive.
AFL commissioner Kim Williams, a former Foxtel CEO, told a Collingwood corporate lunch earlier this month he did not expect the new entrants to play a significant part in the next rights deal, but they definitely would in the one after. “Television as we know it will change completely in the next decade,” he said.
It was revealed last week that the NRL has spoken to Google, while Singtel-Optus chief executive Allen Lew revealed his company would fight rival Telstra to be part of the next rights deal for either code.
Both the AFL and NRL have established working committees to gather information and lay the groundwork for what will be intense negotiations. AFL CEO Gillon McLachlan will play a major role, alongside AFL commissioners Kim Williams, formerly the CEO of Foxtel, and SEEK co-founder Paul Bassat and AFL executive Simon Lethlean. Macquarie Capital boss Robin Bishop is also understood to be assisting the AFL.
The NRL is also understood to be considering as many as 12 Thursday night games in a new deal, while a possible source of additional revenue could be placing a new team in Brisbane to rival the incumbent Brisbane Broncos. It is estimated a new team could add $100 million to $200 million to a rights deal.