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Reflective Sky NZ ‘has options’ to recoup sports rights costs

Pay-television broadcaster Sky New Zealand has stressed that it has options to recoup some sports rights costs after withdrawing its profit guidance for the year ending June 30, 2020 as it “recognises the potential for further disruption” amid the spread of the Covid-19 virus.

Sky said that, while the company “has options to recover some costs associated with sports content rights”, it is “aware of the crucial role it plays in the sport ecosystem in New Zealand”.

The broadcaster added: “Decisions made now have the likelihood of impacting on the health and sustainability of New Zealand sport for some years to come.”

The broadcaster said it is taking “decisive actions” including the reduction of operating expenses, deferring non-essential capital projects and implementing a travel and hiring freeze.

Sky has a major stake in domestic and international sports rights, with one of its marquee deals being that held with New Zealand Rugby. In October, Sky extended its rights deal with rugby union body in a “revolutionary” new contract involving the sport’s national governing body becoming an investor in the broadcaster.

The five-year contract extended Sky’s existing broadcast rights to competitions organised by Sanzaar, rugby union’s regional governing body comprising the unions of South Africa, New Zealand, Australia and Argentina, to 2025.

Sky stated: “While several sports such as the NRL, the A-League and the ANZ Premiership netball are currently adapting by playing without fan attendance, and New Zealand Rugby is looking at innovative ideas for a short-term local derby, Sky recognises the potential for further disruption…

“…as a business with a strong focus on delivering sport content to its customers, the sustainability of New Zealand sport is an important consideration. In the first instance, Sky is working closely with its content partners to develop the best possible package to deliver to customers.

“Sky is also able to draw upon its extensive library of marquee sporting events covering a range of codes and tens of thousands of hours of premium content, documentaries and original production.”

Earlier this week, New Zealand telecoms operator Spark opened up its platform for no charge for existing and new customers until May, after conceding that the impact of the coronavirus on the global sporting schedule has severely impacted its live output.

Sky today told the Stuff.co.nz website that following suit would have been an “easy call” for it to make, suggesting it was in a different position.

Sky added: “Our challenge is much harder. The payments we make to New Zealand sport… are an important financial lifeline for many Kiwi sports – like NZ Rugby, NZ Netball, the Vodafone Warriors and NZ Rugby league, NZ Cricket, the Phoenix and Football NZ, the Sky Sport Breakers, NZ Golf and the NZ Open, Tennis NZ and the ASB Classic, the NZOC, to name a few.”