New TV deal negotiations / Perilous finances (Merged threads)

[ATLANTISMAN]

3 minutes ago, fighting irish said:

I'm listening, but without the numbers, your opinions are on a par with the ''we'd like one and we think we deserve it'' brigade.

What I hope, (god help us) is that Elstone does have an idea of the sum of our market value to Sky's advertisers and also the  number and value of sky subscribers we do bring in.

If not, we have absolutely nothing (in terms of negotiating power) to counter Sky's reduced offering.

If Sky knows that Elstone is ignorant of these vital facts, they might lowball him, just because they can.

Lastly, with regard to something new, we should have Toronto and of course, we should expect good things to happen to subscriber numbers after the next World Cup.

Where, for goodness sake, are the people who have confidence it our sport? 

Forget the value to SKY advertisers (The advertising is mainly sold over multiple channels) its all down to subscriptions and nothing else.

 

P 

[THE RED ROOSTER]

Another long and winding thread - My tuppench ha'pennny worth.

Firstly, the current climate allows companies to cut staff as overheads and TV contracts to increase their profits and gives a ready made , more palatable excuse for something they were intending to do anyway - pandemic or no pandemic. That is the nature of capitalism.

Secondly, to drive up competition you have to have more than one bidder, Rugby League has built it's business model round SKY SPORTS benevolence. In the real world, companies have to operate on the basis of "what if income drops" and plan accordingly. The sporting world operates on the basis that there is always demand for their product. That brand loyalty means that unlike shoppers choosing between Morrisons and Tesco. LIDL RLFC has customers for life and TV Companies should recognise this... Problem is TV companies don't.

Third point taking this into account - how can you sell a sport which has a regional reach in the UK around the M62. The other Sports, with one exception, have national appeal Rugby League does not by choice, so the question of how many households will forgo SKY MOVIES, SKY's multi-channel platform and other sports on SKY just because there is no Rugby League. For sure you have the fanatics on this board, but any calculating SKY exceutive would know when England v Samoa was broadcast on PPV in 2017 it attracted circa 1,000 subscribers. So you could put up with the cancelled subs from the WF7 and M29 postcodes.

Going back to my second point, BT sport are still interested in Gallagher Premiership Rugby Union. If BT wanted to create a "Rugby" channel out of their three channels in the same way SKY have would you subscribe or would you not?. Equally since Union could not get SKY or the BBC / ITV to buy their autumn competition Amazon Prime stepped in with some token games on channel 4. Now perhaps there are some of you think lets go Amazon but what kind of footprint does Amazon have with the general public - the game would dissapear even more from the national consciousness. and come to think of it I am not sure the Amazon Prime subscriber fits the RL demographic to begin with.

Finally, as I have said before and others in this thread have cottoned on to Comcast / NBC own SKY they are american with an american agenda driven by the bottom line. They can have an NFL channel because they get cheap NFL / NBC content to use. They will stick with Soccer, Cricket , Golf, Motor Racing becuse there is a market for it. Theres a market for a cheap filler sport with the emphasis on cheap. The Aussies had an emotional attachment to the game the US owners do not have. Emotional attachments are important, why else do you think a lot of club owners waste millions of pounds and suffer abuse from keyboard klatterers long after in any other Business it would have been time to quit. They do it because they have an attachment  to their club and the game. TV Executives have no such attachment, for them its the bottom line as the game is about to find out.

[ATLANTISMAN]

4 minutes ago, THE RED ROOSTER said:

Another long and winding thread - My tuppench ha'pennny worth.

Firstly, the current climate allows companies to cut staff as overheads and TV contracts to increase their profits and gives a ready made , more palatable excuse for something they were intending to do anyway - pandemic or no pandemic. That is the nature of capitalism.

Secondly, to drive up competition you have to have more than one bidder, Rugby League has built it's business model round SKY SPORTS benevolence. In the real world, companies have to operate on the basis of "what if income drops" and plan accordingly. The sporting world operates on the basis that there is always demand for their product. That brand loyalty means that unlike shoppers choosing between Morrisons and Tesco. LIDL RLFC has customers for life and TV Companies should recognise this... Problem is TV companies don't.

Third point taking this into account - how can you sell a sport which has a regional reach in the UK around the M62. The other Sports, with one exception, have national appeal Rugby League does not by choice, so the question of how many households will forgo SKY MOVIES, SKY's multi-channel platform and other sports on SKY just because there is no Rugby League. For sure you have the fanatics on this board, but any calculating SKY exceutive would know when England v Samoa was broadcast on PPV in 2017 it attracted circa 1,000 subscribers. So you could put up with the cancelled subs from the WF7 and M29 postcodes.

Going back to my second point, BT sport are still interested in Gallagher Premiership Rugby Union. If BT wanted to create a "Rugby" channel out of their three channels in the same way SKY have would you subscribe or would you not?. Equally since Union could not get SKY or the BBC / ITV to buy their autumn competition Amazon Prime stepped in with some token games on channel 4. Now perhaps there are some of you think lets go Amazon but what kind of footprint does Amazon have with the general public - the game would dissapear even more from the national consciousness. and come to think of it I am not sure the Amazon Prime subscriber fits the RL demographic to begin with.

Finally, as I have said before and others in this thread have cottoned on to Comcast / NBC own SKY they are american with an american agenda driven by the bottom line. They can have an NFL channel because they get cheap NFL / NBC content to use. They will stick with Soccer, Cricket , Golf, Motor Racing becuse there is a market for it. Theres a market for a cheap filler sport with the emphasis on cheap. The Aussies had an emotional attachment to the game the US owners do not have. Emotional attachments are important, why else do you think a lot of club owners waste millions of pounds and suffer abuse from keyboard klatterers long after in any other Business it would have been time to quit. They do it because they have an attachment  to their club and the game. TV Executives have no such attachment, for them its the bottom line as the game is about to find out.

Cannot argue with ANYTHING you have said there (Sadly)

See also my Cricket mention on here and what the counties expect when the current deal runs out.

 

Paul

[fighting irish]

5 hours ago, Toby Chopra said:

Spot on. This is what it boils down to. If Sky give up SL, how many would cancel their subscription entirely? I would suggest that number is <100,000.

At an ARPU* of £500 per year, that suggests a contract value of around £30mn/year is in the ballpark, once you take production costs into account. 

We get a good deal now, and a cut in the current climate is what every other sport is dealing with too. 

(*ARPU = Average Revenue Per Unit, the industry measure of how much each subscriber brings in, including phone, Internet, PPV, betting etc.)

Full marks on your arithmetic but where does your <100,000 estimate  come from? 

[ATLANTISMAN]

30 minutes ago, fighting irish said:

Full marks on your arithmetic but where does your <100,000 estimate  come from? 

I estimate there are around 150000 rugby league fans.

The Q is how many only subscribe to SKY because of Rugby League  (Max I would say 10/15%) you have to factor in football cricket F1 movies broadband etc as well.

If RL came off SKY would I still subscribe YES I would (The children and wife have no interest in rugby) they want movies cricket.

Premier Sport remember them estimated that the number of viewers who subscribed because they were showing the NRL was no-more than 5000.

 

Paul

[Toby Chopra]

32 minutes ago, fighting irish said:

Full marks on your arithmetic but where does your <100,000 estimate  come from? 

A fair question. It's an educated guess based on our average viewing figures, which are available on BARB.

Regular season Superleague games range between (roughly) 75,000 and 175,000 depending on the teams, with the Grand Final getting about 250,000 in a good year.

How many of those viewers get Sky only, or primarily, for Superleague, and therefore might ditch it if SL is dropped? I, of course, don't know. But my hunch is that a fair number of people have at least one other sport that they watch keenly - even on here, populated by RL obsessives, people talk about other sports they like. I, for instance, wouldn't drop Sky if rugby league went elsewhere, partly cos I do watch other sports, and also cos it's not just me in the house that watches it. I'd have to see if I could afford another subscription, to BT or whoever, or trim the Sky package.

So, I've assumed half of regular SL viewers quitting sky, and half keeping it, to come up with my figure. Happy to hear other guesses on that ratio!         

[Rugbyleaguesupporter]

1 hour ago, fighting irish said:

What were Sky's reasons for paying ''over the odds''?

BT were going after rights (not to the extent sky believed at the time) so sky paid a premium to renew. 

They paid RFU £30m for essentially 4 autumn internationals, now worth sub £12m 

[Les Tonks Sidestep]

5 hours ago, Dave T said:

Yeah, I think that one raises more questions than it answers tbh.

SL clubs get £1.825m each according to that, over 5 years that totals £109m, £37m short of the total. I accept that the £37m may be the central costs for the RFL and SLE, but it isn't clear.

We then have the £20m for cup and internationals - despite Sky having no internationals and very limited cup games - does this all go to the RFL?

This breakdown suggests that the SLE deal was £147m for 5 years, but we know that Sky didn't really pay £16.5m for lower level RL and £20m for Cup and Tests.

The above seems to be a bit of a mish-mash of splits and distributions. 

Given the rumoured offer from Sky it would seem that they did....

[Rugbyleaguesupporter]

@Toby Chopra

Its complicated but match averages for sky can be 30% higher than programme average as lots of people tune in for kick off and turn off at full time. 

The sky games with 5 min intro and only 5 mins at end are closest to a match average. 

I agree on sub 100k- hence sky bidding around £30m

The major hope is game can present a vision whereby sky subs grow- either in m62 or outside. 

[Rugbyleaguesupporter]

Sky deal is complicated by it being a deal that amended a previous one. 

The consensus appears to be Super League over the last years has got £30m ish and RFL £10m. 

The RFL is £10m per accounts- so a clear figure. 

I think this is derived from sky try money (essentially a gift from sky) and money for cup and internationals. I think bbc may pay sky for those rights. The cup and internationals are worth in the low millions. 

I fear super league deal is £28m per reports, and RFL part £2m. 

If its £30m for SL and RFL get £2m for other rights- then with a 10 team super league the numbers will work ok. 

[Cheshire Setter]

2 hours ago, Blind side johnny said:

Remove their money men and they also aren't viable. I contend that there are no viable businesses (clubs) in British RL and there probably never have been.

That’s sort of true for almost every sport though isn’t it. Not just RL?

[Dave T]

2 hours ago, Blind side johnny said:

To be fair Dave, why would you reasonably expect to have this information?

I wouldn't expect people to know this - that's my point. People are stating that we are offering exactly what we did last time, without knowing. That's my challenge. 

[Dave T]

32 minutes ago, Les Tonks Sidestep said:

Given the rumoured offer from Sky it would seem that they did....

We know they didn't, because they never screened that 1 L1 game they said they would (other than when TWP provided coverage) and Wood confirmed that L1 was not part of the deal. 

[Oldbear]

2 hours ago, Blind side johnny said:

Remove their money men and they also aren't viable. I contend that there are no viable businesses (clubs) in British RL and there probably never have been.

Truth is that describes most sports clubs, hence the need for TV exposure and TV revenue.

[Rugbyleaguesupporter]

@Dave T the money appears about right which is what's important.

I love league one rugby but frankly whether sky show it or not is immaterial. Same for championship rugby- if anything it has negative value which is harsh and sad but unfortunately true imho 

[Oldbear]

1 hour ago, THE RED ROOSTER said:

 

Finally, as I have said before and others in this thread have cottoned on to Comcast / NBC own SKY they are american with an american agenda driven by the bottom line. They can have an NFL channel because they get cheap NFL / NBC content to use. They will stick with Soccer, Cricket , Golf, Motor Racing becuse there is a market for it. Theres a market for a cheap filler sport with the emphasis on cheap. The Aussies had an emotional attachment to the game the US owners do not have. Emotional attachments are important, why else do you think a lot of club owners waste millions of pounds and suffer abuse from keyboard klatterers long after in any other Business it would have been time to quit. They do it because they have an attachment  to their club and the game. TV Executives have no such attachment, for them its the bottom line as the game is about to find out.

Also remember Americans are tough negotiators, if, and it’s a big if, they decide they do want RL as part of their sports portfolio, as some have said on here, they could buy lots of ready made content from the NRL, and therefore may well use that to drive an even harder bargain with SL.

As much as it pains me to think it, I suspect that a 10 team SL is upon us. Now how that league is made up is the next tough one, it’s almost certainly going to be franchised, and there’s going to be some very unpopular decisions taken, but for the bigger clubs the alternative may be not surviving so they will be quite happy to sacrifice their smaller brethren, plus what we don’t know is how much Sky, and it’s new owners, will influence who gets in and who is out, and again some of those decisions could be purely cost based (if Cats can get a French TV interest, as long as Toulouse also get in, and Sky can just take French TV’s pictures then that’s what will happen). Sadly for Toronto I see no way they could get that type of TV deal now (maybe at a later date, but with everything that’s happened recently I don’t see a Canadian broadcaster willing to get involved right now) and unless they can find a way to get their games televised, so Sky can once again take those pictures I think they will be out.

[bobbruce]

8 hours ago, whatmichaelsays said:

As far as the advertising value is concerned, I buy ad space for a living. I know what it costs. 

The point about RL subscribers, I'll grant you, is a supposition on my part. But I would contend that if RL was a driver of subscribers, we'd have no shortage of broadcasters willing to tap into that market - it seems that we don't.

For Sky it therefore becomes a cost analysis - how many of it's current subscriptions rely on RL (which is going to be much less than the number of people reguarly watching RL) and what is the cost of losing those subscriptions vs paying the inflated rights to retain the content. Let's not forget that in the past, Sky has been happy to pass-up Champions League football, RU Premiership, Six Nations and, going further back, English Football League rights based on such forecasts. Let's not pretend that RL is immune from that sort of accountancy.  

While they past on all those sports because they weren’t cost effective. You seem to think they’ve been happily paying an inflated price for RL Sky know the value to them of the sports they buy. That doesn’t mean that under current circumstances we won’t see a reduction. 

[whatmichaelsays]

10 minutes ago, bobbruce said:

While they past on all those sports because they weren’t cost effective. You seem to think they’ve been happily paying an inflated price for RL Sky know the value to them of the sports they buy. That doesn’t mean that under current circumstances we won’t see a reduction. 

I'm not saying they've been happily overpaying. I'm saying they paid the prevailing rate at the time and from pretty much the moment the ink on that contact dried, we've had no shortage of people within the game claiming how poor a deal it was. 

The market has changed since and RL doesn't seen to be offering the broadcast market anything to add value to the package. 

[Sir Kevin Sinfield]

6 hours ago, Damien said:

I'm saying that some clubs should never have got £550,000 to run a full time squad in the Championship whilst others got £150,000. Similarly some clubs shouldn't have got a parachute payment of £788,000 to run a full time squad against teams getting £150,000.

Championship clubs are in the same league as and competing against other Championship clubs. Its odd that fans of some Championship clubs want parity when it is between them and Super League but not parity within their own division. Having haves and have nots seems fine as long as you club is in the haves category.

Spot on, the funding model you describe is insane. The teams at the top end of the Championship and bottom end of Super League can’t have their cake and eat it. Super League and the Championship need to have the same model. It’s either equal funding for all, or funding based on league position or what would make more sense, how many times sky decide to show a side, that’s where the money comes from.

[Sir Kevin Sinfield]

NRL clubs each get $13M a season from their tv deal. It’d be interesting to know what Queensland Cup teams get (Aussie 2nd tier) and how that compares as a % of the NRL clubs figure compared to Championship clubs funding as a % of Super League clubs figure.

[GUBRATS]

3 minutes ago, Sir Kevin Sinfield said:

NRL clubs each get $13M a season from their tv deal. It’d be interesting to know what Queensland Cup teams get (Aussie 2nd tier) and how that compares as a % of the NRL clubs figure compared to Championship clubs funding as a % of Super League clubs figure.

Interesting but irrelivant 

[Davo5]

13 minutes ago, Sir Kevin Sinfield said:

NRL clubs each get $13M a season from their tv deal. It’d be interesting to know what Queensland Cup teams get (Aussie 2nd tier) and how that compares as a % of the NRL clubs figure compared to Championship clubs funding as a % of Super League clubs figure.

How is that relevant.

[GUBRATS]

5 minutes ago, Davo5 said:

How is that relevant.

It isn't , but he'll manipulate it to criticise the lower tier clubs 

[Sir Kevin Sinfield]

14 minutes ago, Davo5 said:

How is that relevant.

It would give some indication of how generous our deal is for Championship clubs. It’s inevitable Championship will say they should keep their current level of funding, some Super League clubs will say Championship clubs should get less, you can use comparisons to help for a fair judgement.

You could do the same comparison with Premiership RU and Championship RU or Premier League and Championship Football. 

[GUBRATS]

1 minute ago, Sir Kevin Sinfield said:

It would give some indication of how generous our deal is for Championship clubs. It’s inevitable Championship will say they should keep their current level of funding, some Super League clubs will say Championship clubs should get less, you can use comparisons to help for a fair judgement.

You could do the same comparison with Premiership RU and Championship RU or Premier League and Championship Football. 

See , I was right