Footy won’t be bailed out by TV

Struggling sporting codes won’t be bailed out by broadcasters if hundreds of millions of dollars of sporting rights are not paid.

The NRL was expecting $13 million per round from its broadcast partners

Struggling sporting codes won’t be bailed out by broadcasters if hundreds of millions of dollars of sporting rights are not paid this year because of postponed or cancelled seasons.

A day after the NRL suspended its season, the code’s administrators and broadcasters Nine Entertainment and Foxtel were on Monday mapping out scenarios of what a delayed or cancelled season would mean for payments worth $90m a quarter to the NRL.

While discussions on broadcasting contracts are yet to decide whether payments would be made to the code without a season, The Australian understands no major broadcaster is willing to bail out the NRL should it face financial ruin as a result of a lost season.

NRL chief commercial officer, Andrew Abdo told The Australian “rights, obligations and provisions of sports broadcasters are different between sports, and between rights holders within a sport”.

“We value our broadcast partners highly and are continuing to talk to and engage with them daily in unprecedented scenario planning,” he said. “This is a challenge we will face together and the opportunity when we restart to engage rugby league fans in partnership with our broadcast partners is immense.”

The federal government has relaxed laws around bankruptcy as part of its economic stimulus package, and it is hoped the NRL can survive the deep freeze of the coronavirus delayed season.

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The payments of about $13m per round are highly unlikely to go ahead should the games not be played with media companies also struggling with the onset of the coronavirus, but the NRL remains hopeful some bridging finance from expected broadcast rights cash could be given to the code.

Foxtel (majority owned by News Corp, publisher of The Australian) will be left with a big hole in its own revenue. Fox Sports and new sports streamer Kayo are key revenue streams for the subscription service with any drop-offs having to be made up by Foxtel.

“We are working through the contractual issues associated with code season suspensions and cancellations however it is too early to comment on the implications of sporting code decisions,” a Foxtel spokesman said.

Nine Entertainment declined to comment on the talks.

The AFL has about $100m of broadcast revenue coming in each quarter from its deal with Seven West Media and Foxtel, which will now not be paid as a result of the league shutting down. It would have also received a pro-rata payment this year given it had switched to a 17-game season when the coronavirus first struck and forced the league to start its season in round 1 behind closed doors.

The league had also hoped to roll over that deal, which was set to expire at the end of the 2022, for a further two seasons but talks over a possible transaction are now in hiatus.

But the AFL at least is in a better financial position than other codes, even if the governing body and its 18 clubs moved to stand down 80 per cent of its workforce on Monday after CEO Gillon McLachlan announced the league’s postponement on Sunday.

Its latest annual report reveals the AFL has total assets approaching $500m, including more than $200m in property given its ownership of Marvel Stadium in Melbourne, and $184m in cash and cash equivalents – though that will quickly be drawn upon.