Rugby league set for billion dollar TV rights deal

The new ARL Commission is likely to secure at least a $1 billion deal for rugby league broadcast rights after a submission of bids from rival broadcasters last week.

A report in the Australian Financial Review suggests that Seven West Media, Ten Network and a partnership of pay-television group Fox Sports Australia and free-to-air broadcaster Nine Entertainment Co separately presented bids to the Commission on Friday.

The Australian Financial Review suggested that current broadcasters, Foxtel and Nine, lodged a bid of close to $1.1 billion for the 2013-18 Australian television and digital rights. This six-year offer represents a significant premium to the current deal with Nine and Fox Sports worth about $100 million per year but falls short of the ARL's preference of striking a deal worth at least the equivalent $1 billion over five years.

Nevertheless, once the contribution for the New Zealand rights currently held by Sky are included, the code and its adviser, Greenhill Caliburn, are likely to achieve the bottom end of their goal.

The new ARL Commission was formed earlier this year to run the National Rugby League after News Limited relinquished its 50% stake in the code. The Commission is keen to get close to the $1.25 billion Seven, Foxtel and Telstra agreed to pay for the 2012-16 AFL broadcast and digital rights.

While NRL matches are a valuable television commodity, the Australian Financial Review suggest that weak advertising markets may reduce the ability of broadcasters to make bids that do not generate a profit. Nine apparently lost money on the London Olympics while Foxtel and Ten did not generate a satisfactory return from the 2010 Commonwealth Games.

The current AFL deal has added to Seven and Foxtel's costs with the pay-TV group disappointed additional AFL matches has not translated into strong subscriber growth.

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