Nine urged to call stumps on cricket coverage

28/09/2019 | 苏州美甲学校 | By admin | 0 Comments

Cricket Australia is facing a major revenue crisis after global investment bank UBS urged broadcast partner Nine to axe cricket coverage because the network is losing up to $40 million every year televising the sport.


Nine has broadcast cricket every summer since Kerry Packer famously bid for the sport in the late 1970s, and is renegotiating for 2018-2023 broadcast rights.

UBS media analyst Eric Choi believes Nine Entertainment Co should walk away from negotiations if Cricket Australia’s price is too high.

“The existing cricket deal costs Nine circa $100 million per annum,” he wrote in a note to clients. “We estimate the existing deal likely only generates gross revenues of $60-$70 million.”

“We think it would seem logical for Nine to enter negotiations with the following mindset: i) More cricket content at no additional cost, or ii) to step away from the cricket contract.”

A lack of a competitive bidding process for the TV rights would be a disaster for Cricket Australia, and comes as the sport attempts to re-sign all its major sponsorship contracts over the next 24 months. CA has already lost Victoria Bitter, and Commonwealth Bank is believed to have drastically cut its sponsorship from about $13 million to just $4 million. And KFC, which has been a major partner since 2003, will be renegotiating its sponsorship deal at the end of next year.

In addition, CA is in tough pay negotiations with cricketers, with an existing pay deal expiring on June 30.

Ben Amarfio, CA’s executive general manager for broadcasting, digital media and commercial, said “very positive discussions” with Nine about the next cycle of media rights had begun.

“We hope to begin formal discussions shortly,” he said. “We are not concerned that there will be a lack of interest for our media rights. Live sport, and cricket in particular, continues to be a premium asset.”

In 2013 Nine paid nearly $500 million for a five-year deal to broadcast international cricket on television exclusively. However, rival Ten secured rights to the Big Bash for just $20 million – a stunningly low price given how popular Big Bash Cricket has become in the past two summers. Nine’s director of sport, Tom Malone, last year said the network wants “everything” in the next rights deal.

“We want Test matches, we want one-dayers, we want [international] Twenty20s and we want the Big Bash,” he said.

A spokesman for Nine declined to comment.

Adding to Cricket Australia’s problems is that Ten is unlikely to bid competitively for the rights like it did in 2013 – when it offered $550 million – given its current financial position. The only remaining options are Seven, which already spends a fortune on live sports, or a publicly owned broadcaster like SBS or the ABC.

Sports bodies need competition between networks to reap high prices, according to chief executive of sports rights and sponsorship company Bastion Collective, Jack Watts.

“If Nine were to consider walking away from cricket that would create a precarious position for Cricket Australia because there would be absolutely no competitive tension in their rights negotiations,” Mr Watts said. “All rights deals are like an auction, all you need is two bidders. But if Nine decides it doesn’t want cricket, I don’t know what Cricket Australia is going to do to get an auction situation happening.”

Industry observers described any suggestion Nine abandoning cricket as a “nightmare scenario” for Cricket Australia while it is also juggling salary and sponsorship deals this year.

Mr Amarfio denied there was a looming revenue crisis at CA. “On the contrary, we haven’t had a number of sponsors depart,” he said. “We are currently in the process of re-signing some of our sponsors to bigger partnerships. The changes to our restructured program will pave the way for an additional premium partner that will see us having three key sponsors for men’s international cricket (Shirt, Test and Short form series sponsors).”