What do the AFL’s new TV rights mean for the NRL?

At a time when rugby league should be rejoicing with an exceptional NRL finals series currently unfolding before us and then a much-anticipated World Cup in the offing, there is little joy in relating the extent to which the NRL has again messed up television media rights negotiations in Australia.

On Tuesday of last week, the AFL trumpeted a new media rights deal of some $643 million per year for the period between 2025 and 2031.

As rightly pointed out by Roy Masters in the Sydney Morning Herald, there are an abundance of accountancy tricks involved in the AFL arriving at that number.

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The figure is padded with various Telstra payments relating to Marvel Stadium and has an undisclosed amount of “contra” (ie. advertising) built in. Nevertheless, despite the lack of transparency by both the NRL and the AFL around the value of media rights, it appears inarguable that there will now be a gap of between $100 million and $150 million per year over and above NRL revenues as negotiated by the AFL (with the possible variation accounted for by the contra levels themselves and differing reports over the exact figures involved).

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Despite the uncertainty around precise figures, what is clear, however, is that the NRL's mid-pandemic negotiation of media rights has been shown to be an outright tactical failure by the AFL's negotiators.

While NRL Chairman Peter V'landys made public points at the expense of the AFL (such as trolling Melbourne and the AFL during the recent announcement the NRL Grand Final would stay in Sydney in 2022), the AFL remained quiet and purposefully went about their business of handing the NRL another lesson in negotiation.

V'landys' reputation has been nearly solely built out of restarting the game during the COVID pandemic. Since that time in mid-2020, his administration has repeatedly fiddled with the rules of the game during the NRL competition proper (an involvement which resulted in an increase in uncompetitive matches), and (infamously) caused the entire postponement of the Rugby League World Cup from 2021 to 2022, by playing to the COVID threat.

On his watch, the Kangaroos have barely played an international match.

As a historian with some knowledge of the game's overall trajectory since its origins in England in 1895, I have never bought into the narrative constructed by the NRL around the pandemic restart.

Rugby league as a sport has emerged relatively unscathed through much more difficult times than those presented during the COVID pandemic.

Any sport which has survived World War I, the Great Depression and World War II knows a thing or two about survival. Rugby league has also been attacked relentlessly by rugby union around the world over more than a century.

In doing so, rugby union enlisted the aid of some of the worst political regimes of the twentieth century – the Nazi-aligned Vichy French, which outlawed rugby league in France during the Second World War, and apartheid South Africa as but two examples. The pandemic itself did not produce a single example world-wide of an entire sport collapsing due to COVID.

The NRL painted a picture during 2020 (and since) that only V'landys could have saved rugby league in Australia. I, for one, simply don't buy it. The strength and resilience of rugby league as a sport had endured harder times and seen it emerge completely intact.

The narrative that rugby league was doomed in Australia could only be the product of poor administration, not the inherent strength of the game itself.

This was confirmed when the NRL looked at its balance sheet during COVID and noted the game barely owned an asset in the form of bricks and mortar. (The NRL has also since disposed of one of its most valuable assets, its digital media arm, at the behest of its principal broadcasters.)

The “sky falling in” narrative – well supported by News Corp and Nine – was that V'landys was largely responsible for the survival of the game. The purported grave risk to the game's very survival presented to the public in this period is frankly not borne out by any proper consideration of the game's overall history. (In contrast, the potential existential threat to the game, and all collision sports, of concussion and CTE has been acted on painfully slowly by the NRL.)

Unfortunately for V'landys (and NRL CEO Andrew Abdo), the absolute key indicator of success and independence in these roles is the negotiation of media rights (as this funds all levels of the game from grassroots to the NRL and State of Origin).

In this regard, they have been completely trumped by the AFL's CEO Gillon McLachlan. As such, the NRL negotiators must be held directly responsible for underfunding the game in comparison to the AFL for any period in which the AFL rights exceed those of the NRL.

The near complete absence of debate in rugby league media about this issue is extremely concerning. Initial reporting of the issue was almost completely restricted to Roy Masters and Andrew Webster, both of the Sydney Morning Herald. Effectively, the NRL media partners – News Corp and Nine – have completely shut down discussion of this matter and potential criticism of V'landys and Abdo.

To make this even worse, it has been widely reported that Nine bid $500 million per year for the AFL rights, a figure in excess of that paid to rugby league for broadcast rights on Nine between 2023 – 2027. It begs the question – was Nine prepared to sacrifice its current sports partner, rugby league, to acquire the AFL in its stead?

How else could such an offer be viewed given the obvious broadcasting conflicts which would immediately emerge from Nine holding the rights to both AFL and NRL simultaneously? (Foxtel of course were successful with Seven in obtaining the AFL rights up to and including 2031 – again paying overs compared to the NRL rights and thereby showing Foxtel's continuing bias towards AFL which has existed at that organisation since its inception and the days of Rupert Murdoch speaking publicly in favour of the AFL over rugby league.)

Webster's SMH article (the paper is owned by Nine) actually appeared to admit that criticism of V'landys and Abdo had been forced upon the SMH by concern from people in the wider rugby league community.

The suggestion that the article was “only written” for this reason again causes concern about the true independence of journalists paid by Foxtel and Nine and their ability to directly criticise the NRL.

Certainly, the AFL deal (and its impacts on rugby league) appear to have been ignored on Foxtel's nightly NRL360 panel show at the time the deal was released to the media. Discussion around individual finals matches was allowed to continue unabated on NRL360, while the elephant of TV rights sat sunning itself untouched in a corner of the studio, the big picture totally ignored.

Nine's recent media rights decisions have now directly funded the NRL's opposition sports in both the AFL and rugby union. Nine paid $100 million to rugby union for three years broadcasting rights while seeking reductions from the NRL for reduced content during the pandemic. Effectively, Nine took the money due to rugby league and handed it to rugby union (a sport that has sought to kill off the independent sport of rugby league for over 120 years). Some loyalty by Nine!

At the same time, Nine has ignored international rugby league (no bid for games during the upcoming Rugby League World Cups in England starting next month) and advertised rugby union widely during important rugby league telecasts such as the State of Origin series. For the NRL to seemingly countenance this behaviour from Nine without public reproach is quite remarkable.

Indeed, V'landys main focus in the Webster SMH article appeared, extraordinarily, to be his claim that the NRL saved Foxtel as a going concern, and this aided the AFL in their record negotiations. That this apparent concern for the sport's long-term broadcaster's health was allowed to seemingly overtake concern for the sport itself and its crucial future funding arrangements beggars belief. Perhaps it was a misstatement on V'landys part? If so, it has yet to be corrected in the public domain to my knowledge.

Since then, claims of seeking compensation from Foxtel for breach of a non-existent “no more favourable clause (than the AFL)” in the NRLs written agreement have been pushed out via various media bodies.

One wonders at the reliability of internal NRL legal advice if they truly believe verbal representations will carry any weight in the consideration of a written contract which will most likely exclude anything oral from its very terms.

The simple facts are that rugby league's cumulative TV ratings for the NRL alone in 2022 greatly exceeded those of the AFL (106,265,000 viewers for the AFL, 118,964,000 for the NRL). This does not include separate ratings for State of Origin 2022 (a fixture the AFL no longer plays) or the international game of rugby league (we are about to see 61 matches of rugby league played at the three World Cups in England in October, something the AFL cannot offer).

It also does not include ratings for the women's form of each game (two NRLW seasons have been played in 2022, which will also comfortably outrate on average the equivalent competition in the AFL, the AFLW).

Accordingly, the higher rating game in 2022 (NRL) was paid less money for TV rights than was the lower rating game (AFL). Let that sink in for a while.

Ramblings about the longer length of telecasts in the AFL hold little weight when more eyeballs are watching the NRL. If length of telecast solely drove value, Test cricket would be the most expensive sporting product in the world – which it most clearly is not; LIV Golf would not be playing reduced 54-hole tournaments (over the usual 72 holes played on the regular US PGA Tour); and the NFLs $10 billion per annum for TV rights for 870.40 hours content in the regular season would not dwarf MLBs $470 million per year media deal for 7,290 hours of content in their regular season.

When combined with the luxury the NRL has that almost 54% of the Australian population lives in heartland rugby league areas (NSW, Queensland and ACT), the NRLs continued inability to extract more for media rights when compared to the AFL, while dominating them in ratings, arguably can only be viewed as a complete failure of administration and this speaks volumes for how tenable the positions of the negotiators of the media deal should be at the NRL.

The extent to which the clubs place pressure on the NRL over this egregious state of affairs will be seen after the finals conclude.

Whichever way the current NRL tries to spin it, the gap in funding with the AFL has proved fatal for NRL Chairmen and CEOs of the past (see David Gallop).

Whether it proves so for V'landys and Abdo is yet to be seen.