Rugby Australia rejecting Fox Sports deal the worst blunder in sporting negotiation history
The breakdown of a longstanding relationship with Fox Sports, followed by an economy-killing virus, has left rugby with no friends.
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This will go down as the worst negotiation blunder in Australian sporting history.
When former Rugby Australia boss Raelene Castle and her chief broadcast negotiator Shane Mattiske rejected Fox Sports’ $US25 million-a-year offer for the 2021-25 rights last November, the ensuing chain of events would cripple the game.
Make no mistake, their rejection was absolutely in the best interests of rugby.
While the game has a longstanding relationship with News Corp – owners of Fox Sports and publisher of The Sunday Telegraph – RA had a duty to look beyond its partner to get the best deal possible.
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They had to see what else was out there, who would be willing to pay more.
But they also had to keep the friendship going with Fox in order to create a bidding war.
Rumours abound about how exactly the relationship broke down between Castle and Foxtel boss Patrick Delany, but they quickly went from negotiating to no longer speaking.
And that is a deal-killer for any sporting organisation.
After it emerged Fox was walking away from rugby, many proclaimed – and still do – that it is merely a negotiating tactic to drive down the price of the rights and swoop in late to grab a steal deal.
Then Optus emerged as a genuine bidder, and many fans hailed the new direction and separation from News.
Now we know Optus was not close to a deal, and amid belt-tightening in the COVID-19 era, it’s unclear if they’ll return to the table.
And still, some believe Fox is faking disinterest to get a cut-price deal, ignoring the huge number of redundancies the company has made to stay afloat, including its rugby department.
It is a tragedy. Rugby is a great game.
It will survive in some shape, likely a club-based domestic tournament to feed into the Wallabies.
But our best players will move overseas to earn the bigger money on offer, and only the faithful will watch the lean-cost club tournament that has little potential to expand an audience.
Super Rugby as a four-nation tournament is dead, much as SANZAAR clings on to hope.
A looming option for RA is to declare to fellow nations that it cannot secure a financially sustainable deal to remain in Super Rugby, pull out of the tournament while committing to The Rugby Championship, and try to sell a two-year package to anybody willing to pay enough to keep it running.
It will be two years of pain, with a massive number of players, coaches and rugby staff left jobless.
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But Australia does have the British & Irish Lions tour in 2025, and remain the lone bidder for the 2027 World Cup. These tournaments will be significant revenue drivers.
RA is reliant on a $16 million low-interest loan from World Rugby, expected to land next week, to get through immediate financial peril.
The negotiated repayments are long term, so Lions and World Cup money will help.
The coronavirus crisis has emptied all pockets.
Rugby wants to believe the lack of interest from broadcasters is a bluff, because the alternative is too painful to acknowledge.
But the game is resilient, and connected to the top end of town.
It’s time to work those contacts, through donations, private ownership, whatever it takes to get through this recession-like time.
Come back in two years, when the economy has healed and more broadcasters are in the field, pitch a package that includes the Lions and a government-funded World Cup, and the money and interest will surely flow again.
It’s not the end of the world. It’s just the end of the world as we know it.