Rugby rights hang on world cup outcomes
By March at the latest, but more likely by the end of this year, it should become clear what options rugby fans will have to watch future Super Rugby competitions and All Blacks tests.
Sky TV owns the New Zealand broadcasting and streaming rights to the next Super Rugby competition, which runs from January until June, and to All Blacks tests until the end of December next year.
But then its current five year-deal with the South Africa, New Zealand, Australia and Argentina Rugby unions group (Sanzaar) expires.
One of the three most likely scenarios is that Sanzaar re-awards all the New Zealand rights to Sky again. But another is that it could split the rights by awarding the satellite-broadcast rights to Sky, while selling Spark the rights to stream games online through Spark Sport.
Last, but not necessarily least, Sanzaar could award the satellite rights to Sky and the streaming rights to United States giant Amazon, which would then make the rugby available through Amazon Prime Video.
Of course, Sanzaar could cut Sky out of the equation completely in order to increase the value of the streaming rights.
But given how many fans still watch rugby the traditional way – on Sky – it appears unlikely that would make financial sense. Rumours are likely to abound in the run-up to an announcement by Sanzaar but may best be treated as fun diversions.
People can have a variety of motives for spreading reliable or unreliable information during a bidding process.
Sky spokeswoman Chris Major says she is confident there has been no leak from the company about its negotiating position, and Sky has not seen fit to make any market disclosure to the NZX in the wake of any speculation published to date.
One fact that is undeniable is that Spark could easily outbid Sky for the streaming rights, and Amazon could outbid both Sky and Spark. But it comes down to a delicate balance of risks and returns. There are good reasons why Spark would want to wait until after the Rugby World Cup before deciding how deep to dig into its pockets. If Spark suffers technical problems streaming the cup, then the company will rightly want to cut and run, and Spark Sport could yet turn into a fairly short-lived experiment. But if its service is deemed a success, then it should be game-on.
There are few reasons, other than sod’s law, to think a cup ‘‘fail’’ is particularly likely. However, the fact Spark has not released any information about the take-up of its cup passes – even in general terms when releasing its annual results last month – does suggest ‘‘early bird’’ sales were weaker than forecast.
Spark has offered cup passes as a freebie to some of its broadband customers, as another way of capitalising on its upfront investment in streaming the event.
But if it attempted the same with Super Rugby or future All Black tests then it could trouble the Commerce Commission.
The watchdog has already received an earful from 2degrees about Spark’s cup broadband deals and the impact it fears a repeat could have on competition in the telecommunications market.
Amazon snaffling the rugby was the talk of financial markets a couple of years ago and the fact that chatter has died down may be more a reflection of Amazon keeping its cards close to its chest than of that possibility having actually subsided.
A move on the rugby could make sense as and when Amazon plans to launch its Amazon Prime subscription service in New Zealand. This would offer Kiwis ‘‘free shipping’’ on items bought from Amazon for an annual subscription and Amazon would likely add Amazon Prime Video to the deal, as it has done in other markets.
Amazon will have to levy GST on items Kiwis buy from its overseas online stores from December, which will make a fulfilment centre in New Zealand and a local launch of Amazon Prime that much more appealing.
Sky has, meanwhile, better positioned itself to secure both the satellite and streaming rights to the rugby by sharpening up its own streaming proposition through the launch of Sky Sport Now in July. Its message is that it too can move with the times and serve the younger generation of sports fans.
Less confident rugby bosses may be less likely to take risks, which could be positive for Sky.
But at this point the decision looks delicately poised.