Rugby state chiefs in dark over TV rights rejection

The heads of Australia’s state rugby unions have been blindsided by Rugby Australia’s decision to reject a TV broadcast deal.

Rugby Australia chief executive Raelene Castle. Picture: AP

The heads of Australia’s state rugby unions have been blind­sided by a decision by the game’s national body to reject a broadcast deal from Foxtel and instead open talks with Optus, describing the move as concerning.

As revealed by The Australian on Monday, Rugby Australia does not have a TV broadcast deal with any major provider after talks between RA and Foxtel broke down during a meeting in Japan following the World Cup. RA rejected Foxtel’s offer of about $20 million as an effective “rollover” agreement on the current arrangement.

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The board is now in talks with Optus to show the Rugby Championship, Super Rugby and Wallabies tours even though the telco lacks a free-to-air TV broadcasting partner and paid $50m in 2018 for three years of the English Premier League rights.

RA chief executive Raelene Castle and chairman Cameron Clyne briefed the heads of state rugby representing Australian Super Rugby franchises the NSW Waratahs, ACT Brumbies, Queensland Reds and Melbourne Rebels at the “state of the nation” address last week.

Despite the hours-long briefing to the heads of state rugby by RA leadership, the state rugby bosses were not told of the failure of the Japan meeting and the decision to walk out on the Foxtel offer and begin negotiations with Optus.

Commercial networks are increasingly interested in Tests over Super Rugby. Picture: Getty Images

The group “was not told any specifics of negotiations” and was told RA was still in negotiations “with both groups”. “That’s not the case and they’re talking to Optus. It’s very disappointing,” said one senior official who ­attended the briefing.

Senior officials on state rugby boards on Monday expressed dismay at the decision of Rugby Australia to decline Foxtel’s offer, wary about the game’s future under Optus, specifically citing fears about a lack of audience.

Concerns were also expressed as to why Optus would better the Foxtel bid if there were not competing bids for rugby rights.

Of particular concern are estimated losses for the franchises of $10m a year under a new Super Rugby home and away system.

Under the new structure beginning in 2021, Australian teams will have up to two fewer home games, resulting in an estimated revenue decline of 15 per cent, thought to be worth about $10m.

“We will suffer a major decline in revenue and someone needs to make that up or we go broke,” one insider said.

David Leckie. Picture: AAP

Industry executives warned any move away from traditional TV broadcasts would sound the death knell for rugby’s future as a top-tier sport in Australia and lead to an exodus of advertisers.

Qantas, the major sponsor of the Wallabies, said it was following the negotiations with interest but would not comment until a resolution was reached.

Former Nine and Seven boss David Leckie, who oversaw broadcast rights deals with both the NRL and AFL, said that the RA board overplayed its hand by demanding an “unrealistic” amount for the rights.

“I know a little bit about TV and if the rights go to Optus, it will kill the game,” he said. “If you’re an advertiser or sponsor, you’d be thinking, ‘Well, we don’t need to worry about rugby anymore’.”

Mr Leckie said the cost of covering Super Rugby outstripped ratings by so much it was no longer commercially viable for the free-to-air networks. “It’s too much of a loss-leader — and there’s zero interest in it,” he said.

“All the commercial networks care about are the Tests and, even then they only want the big ones.

“Meanwhile, you’ve got Foxtel giving them outstanding coverage of matches at all levels and doing a really wonderful job. Optus don’t have the platforms to match that, so a lot of people are going to be as pissed as hell if Rugby Australia stuffs that up.”