COMMENT: Is Rugby Australia The Make Or Break Case For Streaming Deals In OZ
Advisers to Rugby Australia are working overtime trying to jack up a deal that if successful could save CEO Raelene Castle’s job but I strongly doubt this is not going to happen and that Foxtel and News Corp have played the right hand in their poker game with Rugby Australia.
Castle, is a sporting executive who left the Canterbury Bulldogs under a cloud and in disarray, now Rugby Union in Australia is in disarray and is seriously facing the reality that they won’t have the funding to fix up the problems that has seen Rugby Union become the “pity” kid on the block behind AFL and NRL whose viewing audiences are climbing.
Rugby Union does not make the back sports pages of the Telegraph because Castle and her marketing and PR advisers fail to realise that controversy sells it also drives traffic to codes.
Under Castle, Rugby Union has become sanitised as her recent decision-making regarding Israel Folau demonstrated.
This story made the back pages and the front pages while delivering wall to wall TV coverage around the world.
Folau been described as the walking dead of headlines, he never goes away and he will haunt Castle even after she walks away from Rugby Australia, because this was one of the biggest mistakes made by a sporting administration.
If she had put Folau back on a field in Australia the game would be in better shape.
Castle’s future hinges on securing a five-year deal and increased revenues over the $57M that Castle rejected from Foxtel.
Her chances are pretty slim of getting more than this with insiders telling ChannelNews that Castle is still convinced that she can get $100M for her crumbling code despite insiders telling ChannelNews that Optus will not bid for the rights.
Yesterday Seven Media announced a $67M dollar loss and their modus operandi right now is cost cutting and hoping to hell that something comes along that boosts rating.
Their investment in Big Bash Cricket was a flop and most content delivery providers are in cost cutting mode including the likes of Optus and Telstra who are struggling to grow smartphone sales while managing the costly roll out of 5G.
Free to air is in free fall with Disney, Amazon Prime, Foxtel stripping market share as streaming becomes the norm.
Channel 10 who are set to be the free to air broadcaster for Rugby Australia, owned by CBS they are a cost-conscious organisation who is also set to expand their streaming services in Australia.
Castle’s actions have left her like a shag on a rock exposed to the elements buffering the content delivery market.
While Optus are huffing puffing and posturing, they are still a shrewd Singapore owned Company who after screwing up their 2019 Soccer World Cup coverage more so from a lack of knowing what it takes to deliver consistent quality are fast becoming risk adverse.
Rugby Australia is gambling Optus is willing to commit more money to attract subscribers to Optus Sport. One insider even suggested that any preliminary bid extracted from Optus will be used to try and jack up more revenue from Foxtel with a clause set to give Optus an out if Foxtel fail to take the bait.
But this strategy has a big downside.
Since securing the English Premier League from Foxtel, Optus has been dogged by regular technical issues on its streaming platform.
During their 2018 FIFA World Cup, Optus was so embarrassed by ongoing glitches it provided millions of dollars in refunds to angry subscribers with the carrier reluctant to face further problems streaming Rugby Australia.
The next issue is will fans lock in a subscription with Optus or simply walk away from the code. They could also take to watching the event of Channel 10.
According to OzTAM, subscription TV audiences in 2019 plummeted to around 50,000 in capital cities, placing Super Rugby behind A-League soccer, and well behind the NRL’s 164,000 and AFL’s 167,000.
As for the Wallabies and Australia’s performance in the last World Cup Castle was front and centre of a row which saw the coach quit after rowing with Castle, then there was the shocking on field performance by a team who Castle and her board took out the one player who could have made a difference.
Earlier this week Castle was playing the media game by handing out tit bits exclusively to the AFR that British and Irish Lions tour was included in the package, as if this would make a difference.
Another part of her offer package that’s flawed is that the no Australia Super Rugby team has won a title since the NSW Waratahs did it in 2014.
This year the Waratahs are feeling the effect of no Israel Folau and a bunch of Kiwi teams who dominate the sport.
During this World Cup Castle and her board were forced into an embarrassing settlement after putting politics ahead of the best interests of the game.
Doing the right thing for Australia’s LGBT movement is now coming back to haunt Rugby Australia whose Chairman has already resigned.
Rugby Australia were forced to apologise to their former star player Israel Folau as part of a confidential settlement reached over the former Wallabies player’s sacking, the deal is believed to have cost them close to $5M when legal costs were taken into consideration.
Folau sued for $14 million over his sacking and claimed he was unlawful dismissal.
Administrators in France who appear to be a lot smarter than Castle and above all don’t give a stuff about his comments are now reaping the benefits of Rugby Australia’s poor decision making.
Last weekend French NRL team the Catalans Dragons welcomed Israel Folau with open arms, they are now reaping the benefits of their decision making, at a big cost to Rugby Australia and local fans.
Foula didn’t disappoint and is fast becoming a European superhero that fans will follow.
A crowd of 9,000 packed the small Perpignan stadium which is more than what turned up at the last Waratahs game, to see Folau’s debut.
The game was attended by wall to wall international media from European Countries the UK and Australia.
“Izzy, Izzy,” the crowd chanted, caring little about his past indiscretions.
The Catalans Dragons went on to win the match 36-18 after Folau scored an opening try.
As for Castle and her Super Rugby crowd attendances research shows that across the four Australian teams the average attendance was only 10,500 in 2019.
Castle has admitted there is no “magic bullet” to arrest this decline and hard-core fans among Australian private schools are turning to new sports over Rugby.
They one ray of light is local club games which could be where Castle has to go to kickstart interest in the code.
When you add into this mix PR disasters like the Israel Folau controversy and the axing of the Western Force franchise in Perth, rugby is seriously on the nose with its supporters.
One thing that Castle appears to not understand is that controversy sells.
It drives traffic and viewers.
What Castle is trying to flog now is demonstrably less attractive to broadcasters.
Big sponsors such as Samsung walked away from the sport because of poor attendance at games and the failure of Rugby Australia to deliver.
While Qantas has hung on in their brands such as BMW have walked, and more could follow.
What will be interesting is what happens when Castle can’t get an offer over $57M.
I suspect she will quit before having to pick up the phone to Foxtel CEO Patrick Delany to say, “Can we talk”.