346 million reasons to be festive?
The TV deal struck by FFA has been lauded as 'groundbreaking' - but is it? A-League clubs don't think so23 December 2016 | Bonita Mersiades
Writer, editor, publisher
The eleven weeks since the start of the A-League have flown by - but the big issue at that time is the same as it is today. The TV deal.
Remember what FFA President, Steven Lowy, said just before the season start? After 13 years of a Lowy at the helm, we need to think of the game as “fragile”.
Hopefully after his announcement on Tuesday of the six-year $346 million deal with News Limited - which he described as a “quantum leap” - it is less fragile.
But in congratulating the broadcasting committee - which he chairs - of the FFA Board on the outcome, Steven Lowy didn’t mention that, despite the strategy advice, there were apparently no other bidders for the TV rights.
Those close to the negotiations suggest there was a failure to create a market or competitive tension between potentially interested parties by making the most of the ever-growing convergence between what were once traditional broadcasters, and what were once traditional telcos.
So is it a good deal?
John Stensholt of the Financial Review wrote that there is “a clause in the FOX Sports agreement for the pay-TV network to increase the FFA deal annually when the A-League expands to 12 teams, within about two years.”
However, sources familiar with the details of the negotiations are adamant that the 'additionality' is already counted in the $346 million. In other words, it's not $346 million plus some more when the A-League competition expands. It's $346 million over six years including when (and on the assumption that) the A-League expands into two more markets.
And where might that be?
According to the same sources, the rights holder is keen to protect their considerable investment over 13 years, and they want expansion in two of either Sydney, Melbourne or Brisbane.
Further, while it's been widely reported that $3 million has been put aside each year for a 'marquee fund', an additional $3 million has also been earmarked for marketing. As explained to us, that means $44 million available for distribution in the first year, when News Limited's first payment is $50 million - nowhere near enough to meet the A-League clubs' demands of $6 million each per year.
Roy Masters weighs-in but also seems to misunderstand the situation. In particular, let's clarify one thing yet again: it is not “inexplicable” that FFA does not hold the rights to Socceroos matches.
For a start, they are not FFA's to sell either for the World Cup (as suggested in the article) or for matches under the auspices of the Asian Football Confederation. This is not new news to FFA and, in case someone failed to tell David Gallop and Steven Lowy, I wrote about it here earlier this year (scroll to below the second chart) as well as here in 2012.
Steven Lowy says the average $57.6 million deal - with a free-to-air component and some other rights to be sold - will help grow the A-League and W-League and “invest more in grassroots football development and the women's game.”
We hope he is right. We can only watch this space.
The original version of this piece appeared in Football Today (Monthly) of 22 December, our monthly e-news. You can subscribe here.
a-league, tv rights, sports biz, ffa