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COMMENT: Nine All Bluff Over NRL, Competitors Wait To Step In

As Foxtel strips down to fitness weight, archrival Nine Entertainment whose TV network and media network is suffering from COVID-19 inflicted wounds their CEO Hugh Marks has declared he has “no deal” with the NRL over broadcast payments for the 2020 season.

The move could spark a major overall of both NRL and sport broadcasting rights in Australia with Foxtel and the NRL in a position to negotiate with other broadcasters who could take the same view as Nine, who are using the crisis to cut costs.

Marks has admitted that his TV network is struggling with his network business down this year.

At yesterday’s Macquarie conference Marks revealed the network’s free to air television revenue dropped nearly 30 per cent in April he also outlined even tougher cost savings with as much as $300 million set to be stripped from Nine operations spanning broadcast and media.

Marks has so far refused to say how much the new broadcast rights deal with the NRL would be worth, warning only that the NRL would have to demonstrate better value to the network or be in for a “rude shock” in the future.”

“It has to just pay its way like all of our content does, and if it doesn’t … well again, we are less reliant on that as a revenue source.”

‘It’s a sad statement that if the NRL proceeds that it will be a net negative to our results’

Mr Marks said he wanted to “get out of the way” and allow the NRL to restart the season but said that was the only agreement that he had made.

“We have to be hard … we have agreed to nothing this year.

“There is no agreement on value or for how long,” Mr Marks said.

Shortly Nine will have to fund a move into shiny new offices in North Sydney that will see their Entertainment and Media businesses combined.

He is also facing the real possibility that his Stan subsidiary could lose vital supply contracts to Foxtel, who are restructuring their business by axing staff, poor performing programs while getting themselves into a new position to compete.

The extent of the cuts and the impact on News Corp revenues will be revealed this Friday when major announcements are anticipated.

What irks Nine is that Foxtel has partners with deep pockets and massive global media assets they also have the resources to buy a free to air network in Australia if the Government approves a deal.

Yesterday salvo at the NRL, saying it’s not a given the league is set to be part of the network’s future has been described as “Mere bluff, it comes as observers claim there is every possibility the Cricket World Cup also scheduled for the Nine network will not go ahead leaving the network with Married At First Sight to bolster their fortunes.

If Marks walks away from NRL his Queensland and NSW networks will also lose tens of thousands of loyal viewers.

What Marks is posturing for is a big discount, what his opponents are waiting for is the opportunity to take over NRL from the Nine Network if he walks away.

He also wants to get his hands on the rights to the NRL’s digital operation as he knows that the future is all about streaming and that’s where Foxtel and News Corp along with Telstra a part shareholder in Foxtel have a major strength over the Nine Network.

In coming months there is also the possibility that other parts of the Nine network could come under threat as content moves to streaming networks and organisations move to capitalise on the thirst for news during the COVID-19 epidemic.

Since Sky News has been restructured it has grown market share with some tipping that News Corp and Foxtel could launch a major 24-Hour News service via an app. This would be a major threat to the Nine News operation as News Corp has lots of global Content and news resources.

Right now, the Murdoch’s the major shareholders in News Corp are back cranking up their UK news capability after selling their Sky operation to Disney, the move already has UK media organisations concerned, especially the BBC.

Currently Nine and the Seven Networks are vulnerable, and the big question is who will survive and who will be stripped down and fit enough to fight a marketing battle after COVID-19.

Will News Corp buy the Seven Network and put Nine out of their NRL misery or will the NRL and Foxtel cut a deal with the CBS Viacom owned Ten Network to deliver NRL games.

This week Foxtel cut a deal with CBS Viacom to launch a music channel.

In recent weeks, many questions have been asked about the changing landscape for content.

One big question is whether we need a change to the Federal Government’s Anti-siphoning laws in Australia that regulate media companies’ access to significant sporting events such as NRL.

Australia is fast becoming a content streaming Country, consumers don’t want advertising and are prepared to pay for content, the return of NRL could see the reactivation of Kayo subscriptions in NSW and Queensland which are NRL heartlands.

Consumers also have a new generation of TV’s that deliver 4K and Ultra High Definition content which Foxtel already delivers with big sporting events this same technology is now being built into large smartphones and tablets.

The Nine Network is still delivering Full HD content and there is a big difference between 4K and Full HD sport.

The current anti-siphoning rules  prohibit national television broadcasters and commercial television broadcasters from premiering listed events on digital multi-channels with the decision solely in the hands of the Federal Government who I suspect could get a knock on the door soon from streaming organisations including the likes of Amazon and Google.

While stakeholders continue to press ahead with a May 28 restart date, it remains unclear how much the NRL will get for the shortened season.

We suspect that whoever puts the NRL games to air will get record viewers and the opportunity to work with brands who are looking for exposure during the COVID-19 epidemic.

Marks has so far refused to say how much the new broadcast rights deal with the NRL would be worth, warning only that the NRL would have to demonstrate better value to the network or be in for a “rude shock” in the future.”

Maybe the shock will be the fall in viewers if he does walk away from NRL, as the  problem he’s got is that after getting rid of former NRL CEO Greenburg  he has new management who are not people who can be bullied by a struggling network.

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