Television first came to Australia in September 1956. One of the major reasons the technology finally made its way down under was the Melbourne Olympic Games, held in November of that very year.

Without the substantial money for broadcast rights, all local channels covered the action and exposed Australia to the world for the very first time. From that very first broadcast of Ron Clarke pacing along the cinder track, fighting the spilling fire to light the Olympic flame at the MCG, a unique relationship between Australia and sport on television emerged.

Australians were fascinated, and that only grew further with the introduction of colour in the 1970s. The nation’s finest sporting moments like the 1983 America’s Cup victory and 2000 Sydney Olympics had Australians glued to the small screen. The obsession led to the creation of legislation in the form of an anti-siphoning list, which dictated certain culturally important sports events must be shown on free-to-air television following Pay TV’s introduction in the 1990s.

But while our passion for sport has remained the same, the ways in which we consume it are changing.

Now, sport is the final frontier of commercial television. Other than the nightly news, it’s the one thing that keeps people tuning in, driving ratings and therefore advertising revenue for the television networks.

For so long networks have been able to rely on sport to drive viewership, but that’s quickly changing. The decline of television as a medium is happening faster than most expected, and sport is caught in the crossfire as it struggles to fight off streaming services.

Ratings are down. The AFL Grand Final on Channel 7, NRL Grand Final on Channel 9, and Melbourne Cup on Channel 10 all registered lower figures than in 2018, while second-tier sports like rugby union on Foxtel rarely crack 100k viewers.

The Co-Editor of media website TV Blackbox, Kevin Perry, says the networks are beginning to panic.

“It’s definitely a concern, they’re paying huge amounts of money for the rights. It’s really hitting the bottom line and they’re just not getting the return in advertising that they were expecting. But it’s definitely a trend across the board in television. The free-to-air television industry has fallen off a cliff in the last five years ratings-wise. The whole industry is in decline.”

The rise of streaming services has undoubtedly been the main contributor to the decline. International streaming companies like Netflix and Amazon, however, are yet to enter the Australian sporting market like they have done overseas. Amazon Prime broadcasts live Premier League matches while Twitter has streamed free NFL matches, but Perry believes Australia just isn’t ready yet, as the AFL and NRL TV rights deals approach their conclusion.

“I don’t see it personally [streaming services bidding]. I think you’re going to see the social media platforms like Facebook, Twitter and Snapchat going for rights but they’re more interested in highlights,” he says.

“They want the exclusive rights to show that 30 second clip of a good bit of play – that good play or winning shot.”

Despite the falling ratings, the networks recognise just how important the “big three” Australian sports of AFL, NRL and Cricket are not only to advertising revenue, but to the survival of the channel as a whole.

“At the moment we’re seeing cuts to all the second-tier sports, they’re having to renegotiate for lower prices,” says Perry.

“I still think those big three will be able to hold their value and maybe go a little bit higher. There’s still a huge demand just to get those three sports. All this budget readjustment by the networks at the moment is geared towards these rights.

“There’s still enough interest from media organisations in bidding large for AFL, NRL, and cricket.”

Spending the majority of this decade without a football code, Channel 10 has been teetering on the edge of bankruptcy, and regularly rating below the government-funded ABC. In 2017 the network was bought by American television giants CBS, and Perry says the new owners have big plans to change the sporting landscape and the network’s fortunes.

“You’ve got Seven and Nine who both just have to keep a football code. At the same time, you’ve got Ten, which is now owned by CBS whose reputation in America has been built on spending big to get the football,” he says.

“They understand that you invest big, get the football and everything else works. Channel 10 will go big and will get a football code. At the same time Foxtel know that if they haven’t got the two big football codes, their business is effectively dead.”

Due to the changing nature of the way people consume sport, digital rights will be much sought after, having been neglected in the last round of negotiations, leaving Foxtel to pick them up relatively cheaply and launch the successful Kayo Sports service.

“In the current rights deal, none of the networks have digital rights. They’re not going to stand for that next time. They want free-to-air rights and digital, and they’re going to have to pay to get it,” says Perry.

“The betting agencies also want streaming rights.”

Kayo Sports has been a boon for Foxtel, boasting over 380,000 subscribers without impacting traditional Foxtel package subscribers substantially. Kayo has now begun to broadcast niche sports that wouldn’t usually get airtime on free-to-air or pay television, such as hockey and baseball.

“Foxtel have always been at that 30% penetration mark of the Australian population. It hasn’t really changed that much in the last few years. They’re not growing but they’re not really falling off either,” Perry says.

The pioneer of sports streaming in Australia was Optus, who purchased the English Premier League rights in Australia in 2015. Optus experienced plenty of difficulties, none more prevalent than their struggles during the 2018 FIFA World Cup, but now appear to be moving in the right direction according to Perry.

“The World Cup was a huge marketing disaster for the business, and it was a real bad moment that cost them financially and reputation-wise. They’re clawing their way back after that,” he says.

“If you talk to real dedicated fans of the Premier League you don’t hear that many complaints anymore. The main complaint from football fans these days is that they have to make that decision to go with Optus for the Premier League or go with Foxtel to watch the domestic A-League.

“The organisation that’s been hurt the most by Optus is the A-League as they’re not on the same platform as other leagues anymore.”

After experiencing a boom at the start of the decade, the A-League now almost exclusively rates under 100k viewers as consumers of sport turn their eyes elsewhere. The likes of AFLW, Suncorp Super Netball and WBBL cricket are now being shown regularly on free-to-air and pay television, showcasing the growth and marking a special period of time for women’s sport in Australia.

“Female sport has huge potential, there’s a large audience there willing to embrace it but it has to be packaged right and has to be timed right so as not to oversaturate the market and manage that growth. If they manage that growth right, there’s huge sponsorship potential there. Marketers would love to get behind a woman’s sport that was rating well.”

While these leagues fetch very little in TV rights and advertising revenue (in some cases the league even pays the broadcaster to show the sport), the rapid growth has seen some surprise ratings results. In November 2019, a regular season WBBL match on Channel 7 drew more viewers than the International T20 match between Australian and Pakistan on Foxtel that the same day.

The last cricket TV rights deal saw one-day and T20 internationals become Foxtel exclusive, despite their place on the anti-siphoning list. Perry says the decision proves just how redundant the legislation has become.

“The anti-siphoning list is ridiculous legislation that should be gotten rid of. There is so many loopholes in it. Foxtel has to abide by the legislation but Kayo, owned by Foxtel, does not. That’s how silly it is. You’ve just got to get rid of legislation like that and let the marketplace work,” he says.

“Cricket Australia knew they were giving up audience when they did that deal. Did they realise they were giving up so much audience? It’s hard to know. It was an incredible amount of money, so it was hard for them to say no to.

“It’s definitely hurt the sport long term and probably knocked some of the momentum out of the Big Bash as well.”

The decision between long-term growth and money is one that isn’t exclusive to cricket, Perry says.

“If you look at the Supercars. In the last rights deal they made the big push into Pay TV. That earns them good money, but it has hurt them from an audience point of view and now if you talk to their teams, they’re very keen for the next rights deal to get back on free-to-air. They’re willing to take a cut in TV rights just because they’re desperate to get back on free-to-air television and start attracting sponsors again.”

It’s an interesting time for sports broadcasting.

Will the “big three” consume the whole TV rights pie, leaving the rest to fight it out for the scraps? Will streaming become the norm for sports as families replace their television sets with tablets?

One thing’s for sure; Australia won’t lose any of its passion for sport. There are peaks and troughs but no matter how many changes the seemingly useless anti-siphoning list undertakes, Australians gathering to watch sport will always be an important ritual.

So, in the words of cricket tragic and netball legend Sharon Strezlecki; crack open the Tia Maria and pop on some footy franks. The bounce is in 10 minutes.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s