Roger Davis, the chairman of Super Rugby team the NSW Waratahs, has warned that the competition’s Australian teams are in financial peril unless their upcoming domestic media rights deal delivers a revenue increase.
“We are all broke unless the [rights] deal goes up,” he said, reported by the Sydney Morning Herald.
The Waratahs are one of four Australian teams in Super Rugby, the club competition run by the Sanzaar grouping of southern hemisphere rugby unions. Rugby Australia is currently selling domestic rights for Sanzaar’s two competitions – Super Rugby and the Rugby Championship national team competition – as well as other Australia national team home matches and other domestic properties, for the 2021 to 2025 period. Long-term and incumbent rights partner Fox, the pay-television broadcaster, is understood to be taking a tough line in the negotiations and seeking to limit any increase in its financial commitment.
Davis said a format change in Super Rugby from 2021 that will reduce the Australian teams’ home matches will have a major financial impact: “We are being asked to survive on a minimum of six home games a year and a maximum of seven, which is basically taking 20 per cent of our revenue out of the business. You can’t take 20 per cent of a business’s revenue away and expect it to survive.”
The format change is happening because Japanese team the Sunwolves is exiting the competition.
Rugby Australia chief executive Raelene Castle has responsibility for the domestic rights sale. RA is being advised by experienced media rights executive and former head of strategy at the National Rugby League, Shane Mattiske.
The Sydney Morning Herald reported that RA’s exploration of the market beyond Fox had angered the broadcaster. RA is reported to have had talks with free-to-air networks, telco Optus and OTT operator Amazon.
Fox has been seeking to rein in media rights spending growth after a long period of increases in the market. The value of rugby union rights in Australia has also been hit by poor performances by its national and club teams in recent years. Earlier this year, Fox and free-to-air network Nine negotiated a reduced fee for the rights for the 2019 Rugby World Cup compared to the previous editions.
In October, New Zealand Rugby achieved a large uplift in its sale of Sanzaar and domestic property rights for the 2021-25 period.
Rights to Sanzaar competitions in the competing markets of Argentina, Australia, New Zealand and South Africa are sold by each market’s union, usually along with packages of rights to domestic properties including home test matches. International rights to Sanzaar competitions are sold by the central Sanzaar organisation. The unions keep the rights revenue from the sale of their domestic properties. Revenue from the sale of domestic and international rights for the Sanzaar competitions is pooled and split among the competing unions according to an agreed formula.