Foxtel wants ‘tier one’ sport only as cricket signs lucrative Vodafone sponsorship

Kayo could help Foxtel double sports audience by next year, but sports below the top tier will struggle for broadcast deals.

Ed Curnow of Carlton is pressured by the defence during the round 14 AFL match between the Carlton Blues and the Collingwood Magpies at The Gabba on August 30, 2020 in Brisbane, Australia. (Photo by Bradley Kanaris/Getty Images)

Foxtel chief executive Patrick Delany has warned the subscription-television service will only chase “tier one” sports in the future, and predicted streaming service Kayo would help double Foxtel’s average sports audience by next year.

He said he was “fearless” of losing sports that were asking too much for broadcast rights, a shot across the bows of rugby union and soccer, and while cricket was a tier one sport “it is going to have a tough season ahead and we will work through it with them”.

Kayo, which achieved big subscriber increases when the NRL and AFL returned, would keep growing in popularity, Mr Delany predicted, and attract more advertisers.

“Where an NRL match may average 250,000 viewers now, I think by the end of next sports season it will average 500,000. That gives us the opportunity to say to the market we have premium reach.”

Improved data analysis had also helped Foxtel decide which sports were worth paying big money for and those that were not, Mr Delany told the Asian media APOS Virtual Series on Tuesday afternoon.

“If a sport is asking too much money and we can‘t make it work, and someone else can, well good luck to them,” he said. “We can see quite clearly the sports that are working, and those sports know who they are.

“We did a great deal with the NRL to renew our relationship. I want more of the NRL. Our relationship with the AFL is really fabulous. I want more AFL. The motorsports are going well for us, and we like cricket.”

Cricket Australia will on Wednesday announce a lucrative three-year sponsorship deal with telco Vodafone worth at least $6m per annum, a sign of the commercial strength of the sport, even though a battle with its domestic broadcasters looms.

Foxtel and Seven West Media are both understood to be pushing for a discount or rebate on their $1.18bn six-year deal for cricket.

Both broadcasters have achieved a better deal in renegotiations in recent months with winter football codes that take into account COVID-hit leagues and the end of the sports rights bubble.

Seven chief executive James Warburton has been particularly voluble, last week saying cricket was “ripping off fans” given the prospect of a weakened Big Bash League in the upcoming season. Legal action may also take place before the summer.

Cricket’s Vodafone deal includes men’s test match naming rights for Vodafone, the women’s Big Bash League and the women’s national team.

Interim Cricket Australia CEO Nick Hockley told The Australian that the sport had been able to maintain 20 of its 22 commercial partners despite COVID-19 and more deals would soon be announced.

“I’ve been overwhelmed by the level of the support and how much the partnership with cricket means for (sponsors), and how much they want to help.”

But the most lucrative deal for cricket is broadcast rights, and while he is meeting with Mr Warburton this week, Mr Hockley said he did not want to get into a public slanging match. “I’m not going to talk about that other than to say certainly some of those comments are not reflective of the extraordinary work that lots of people are doing across Australian cricket.

“We remain confident it is going to be a full action-packed summer and the Vodafone test series against India will be a highlight.”

While an Indian tour is usually one of the two most lucrative summers every four years, given the huge international broadcast rights it can attract, Mr Hockley said 2020-21 would be more costly than usual given COVID-19 and “all the biosecurity measures”.

“It is hard to foresee a summer where crowds are not impacted too, and that is why we are incredibly appreciative of … our (commercial) partners.”