AFL can’t guarantee new TV deal before season restart but confident it will eventually get done
The AFL is yet to pen a new TV deal with broadcasters less than a week before the season reboots but league boss Gillon McLachlan can’t guarantee if it will happen in time.
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Gillon McLachlan has declared “there’ll be no problems” in securing a revised broadcast rights deal.
But the AFL boss couldn’t guarantee that it would happen before next Thursday night’s season reboot between Collingwood and Richmond.
The Herald Sun revealed that the AFL was in danger of failing to secure a deal with broadcaster partners Channel 7 and Fox Footy before the restart, and that discounts were also being sought for 2021 and 2022.
The prospect of an extension for 2023 and 2024 is also uncertain.
“The various parties are nowhere near a deal on that,” the insider said.
“The game has changed in the media world and peak sports rights are five years ago, really.”
Networks are pushing for a reduction of about $150 million – from $417 million – on their 2020 payments.
The AFL will need to shift its position in the coming days if the breakthrough agreement is to be reached.
McLachlan refused to be drawn on the details on Friday, but said he was confident that a deal would get done.
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“I’m not going to talk about broadcasting, other than to say we’ve got agreements in place,” he said.
“We’ll be kicking out of the blocks on Thursday, we have got great relationships with all our broadcasters.
“We’re working through the impact of this season and I don’t think anyone should worry about it too much.”
Rival code NRL, which kicked off last weekend, struck a deal with Fox Sports and Channel 9 for its adjusted 2020 season one day before play restarted on May 28, with its Fox deal extended until 2027.
Insiders say the NRL has adopted a far more pragmatic approach to the negotiations.
“The AFL are keen to get back, but they have been typically transactional and I don’t think have the same pragmatism about the profitability of media companies,” an insider told the Herald Sun.
When asked if a deal would be done before next Thursday night, McLachlan said: “I don’t know”.
“We will get there, because we’re long term partners and we’ll work through it,” he said on ABC Melbourne radio.
“There’ll be no problems.”
Clubs and the AFL Players’ Association will be closely watching the outcome of talks with the league yet to finalise next year’s football department soft caps and player wages.
Hawthorn president Jeff Kennett – a member of the league’s coronavirus cabinet – told the Herald Sun that it would be “essential that we get a good price” to ensure further flow of funds to clubs, which could also have its soft cap figure impacted, amid the crisis.
“If there is a reduction, every dollar it is reduced by will impact on the code,” Kennett said.
“Not only this year, but it will have a flow-on effect next year, because of the borrowings that the AFL will have to undertake.”
Reports on Monday that Seven and Foxtel had withheld payments to the AFL were incorrect.
The league received a full payment last December and again in mid-March, meaning broadcasters have forked out two instalments for a single round of football.
The next payment is due in July.
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An AFL commission subcommittee, including McLachlan, former News Corp boss Kim Williams, Paul Bassat and Robyn Bishop, is leading the league’s negotiations.
Seven this week announced it was dumping its Monday night and Sunday morning footy review programs because of savage costs cuts, while Fox Footy and Kayo subscribers have been lost during the season shutdown.
Broadcasters are also concerned they have no clarity on the AFL fixture beyond Round 5, while a decision has not been made on what date or time of day the Grand Final will be played.
Rival code NRL, which relaunched its season last weekend, has already locked away an extended new TV rights deal.
Before the coronavirus, the AFL pocketed an average of $417 million a year in TV rights as part of a six-year, $2.5 billion deal with Seven, Foxtel and Telstra that expires at the end of 2022.
Google, Facebook and Amazon are not considered serious players in the race for the AFL’s broadcast rights.
Club chiefs are bracing for cuts in TV revenues of 15 to 20 per cent.
News Corp is a parent of Foxtel and the publisher of the Herald Sun.
CURRENT SIX-YEAR AFL TV RIGHTS DEAL
FOXTEL $1.3b
CHANNEL 7 $900m (includes $60m contra)
TELSTRA $300m
TOTAL $2.5b
AVERAGE ANNUAL PAYMENT
FOXTEL $217m
CHANNEL 7 $140m (plus $10m contra)
TELSTRA $50m
TOTAL $417m
REVISED 2020 DEAL
WORST CASE 50 per cent payment — $208.5m total, $108.5m from Fox, $70m (plus $5m contra) from Seven, $25m from Telstra
TOTAL LOSS $208.5m
BEST CASE 75 per cent payment — $313m total, $163m from Fox, $105m from Seven (plus $7.5m contra), Telstra $37.5m
TOTAL LOSS $104m
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