When the COVID-19 pandemic shut down the NRL in March, staff at Rugby League Central were told about the need for costs to be taken out of the business. There would be a critical eye cast on unprofitable divisions.
While there has since been standowns and employees forced on annual leave, those working in the NRL Digital department were reassured they would be safe given the money the division brought in.
Yet there are now mixed messages coming from NRL figures about how valuable having a digital arm with 70 journalists, producers, data experts and analysts is, even though the NRL’s latest annual report says it generated $24 million in revenue in 2019.
Some say it is profitable, costing about $15m annually.
Others say more costs need to be included and that initial plans for a $120m spend over five years is a more accurate snapshot to make it a break-even proposition at best, and maybe a loss-maker.
NRL officials say the division is not on the table for an outright sale or inclusion in any future broadcast rights deal, despite speculation Nine Entertainment is making a play for it.
One option could be for NRL.com staff to provide Nine or another rights holder such as Fox Sports (owned by News Corporation, the publisher of this newspaper) with content — or vice versa.
Whatever the case, rugby league’s management is also trying to grapple with its true value at a time they are searching across the business for cost savings.
NRL.com had 1.3 million users in 2019, up 56 per cent from a year earlier. The data it can harness from that definitely has a value: there is talk of tracking ticket users or promoting the broadcast of games depending on their age and preferences. But it is only valuable if that data is used wisely.
How many of those 1.3m users are actually engaged — some say the rate of NRL.com emails actually opened is at best 20 per cent. And how many would pay a fee to just stream NRL games if the sport took control of its rights?
Kayo, owned by Fox Sports and which has a dozen sports, had 370,000 subscribers as of February. The NRL would have to at least double that, and produce each game.
Ultimately, that is the test: can sports make as much money from telecasting their own matches via their digital arms or from selling the games to broadcasters? Some, such as Tennis Australia, produce their own broadcast.
It is costly but they can tailor it to any market in the world. The AFL had grand plans for its media division, before it signed its last $2.5bn broadcast deal in 2015.
The NRL may find it has a valuable digital entity, but not valuable enough to make it turn down more money from broadcasters or telcos – even in a depressed rights market.
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