AFL facing $104m hole
Loss of TV rights cash to hit hard
THE AFL stands to lose at least $104 million in TV rights cash this year.
Negotiations between the league and its broadcast partners over a reduced arrangement for the 2020 season are continuing.
But industry figures say five fewer rounds and shortened games will slice at least 25 per cent off this year’s contracts.
The league pockets an average of $417 million a year in TV rights as part of its bumper sixyear, $2.5 billion deal with Channel 7, Foxtel and Telstra that expires at the end of 2022.
A more savage 50 per cent reduction in broadcast fees this year would equate to $208.5 million in lost revenue.
The revised deal for 2020 is expected to fall within the 50-75 per cent range of the original agreement. The AFL could choose to spread the losses over several years.
The size of the TV shortfall will be crucial in determining cash distributions to the 18 clubs and the extent of staff culls across the industry, including at head office. The
AFL is intent on slashing list sizes and football department expenditure to save costs.
Talks over a proposed twoyear extension with Seven and Foxtel have slowed as the league focuses on restarting the season.
A new NRL TV rights deal, set to be agreed between Channel 9 and Foxtel this week, involves downsizing the NRL’s digital platform.
AFL Media, the league’s inhouse digital business, could also be significantly diminished and refocused on supporting club websites.
Global tech giants Google, Facebook and Amazon are unlikely to make a play for the AFL’s broadcast rights. Broadcast money accounts for about 65 per cent of the competition’s total annual revenue.
The other financial unknowns for the AFL and clubs are how many club members will seek a refund on their 2020 payments and the ability of commercial sponsors to honour their agreements.
The AFL is pushing to redraw its collective bargaining agreement with the game’s 850 players, a move the players’ union says will require full financial transparency from AFL House.