CHRIS KEALL
Spark v Sky for sports rights
Former Sky TV boss John Fellet was happy to cede the Rugby World Cup to Spark Sport rather than pay overthe-odds. But yesterday his successor, Martin Stewart, indicated he would bid til it hurt to keep rights to key sports — then bid some more.
“If someone outbids us, they’re going to go broke,” he said.
Having just won a six-year Australian cricket rights deal — including the Boxing Day test against the Black Caps, which Spark was eyeing — Stewart says more deals are ahead.
“We dropped the ball,” Stewart said in a reference to his company’s loss of various sports rights before his arrival. “We’re not going to drop it again.”
The Sky TV boss’s line-in-the-sand comments follow the front-foot approach taken by Spark Sport head Jeff Latch this month — who indicated his company wants to go head-tohead with Sky as top-tier rugby, cricket, league and other rights come up for renewal over the next 12 to 24 months.
Latch said Spark Sport’s success would hinge on how many people stay loyal to the app beyond the RWC.
To keep them in the fold, Spark would need to land season-long competitions. It wanted A-list rugby and cricket and more, Latch said. There would also be a move into live production through a partnership with international outside broadcast player NEP (giving Spark the ability to, for example, live-broadcast Super Rugby games) and a move into studio production.
But the unstoppable Latch is going to thunder into the immovable Stewart. One will have to give.
Amid the confrontation, NZ Rugby, Sanzaar and other sports bodies could be in for a bonanza as Sky and Spark brandish their chequebooks in a battle for rights (though they’ll also have to be wary that, ultimately, part of the cost of a winning bid will be passed on to consumers).
We’re talking big bucks here. Spark is said to have paid $13 million for Rugby World Cup rights (the telco won’t confirm or deny), with $1m defrayed via its partnership with TVNZ.
And a recent Forsyth Barr research report estimates Sky spends at least
$106m a year on sports rights — around $65m on rugby, $30m on league and some $10m on netball.
The next couple of years could be something of a financial bloodbath if a Spark-Sky bidding war sees those numbers spiral.
And Stewart was happy to stoke Spark investor fears yesterday by emphasising his company has spent more than $1.5 billion on sports rights over its lifetime.
Who will blink first?
Stewart and Sky’s board (the new CEO also took Fellet’s place on the board) are in a death-glory fight.
Sky’s new slogan, “Life needs more sport” emphasises that top-tier sports rights are central to its very existence.
Spark, by contrast, has a number of fish to fry.
Stewart could be gambling that if Sky grits its teeth and pays through the nose for the next round of major rugby, cricket, netball and league rights over the next 18 months or so, Spark’s investors and board will lose their nerve and look elsewhere for growth.
More liberal approach to wholesale contracts
Historically, ISPs and telcos have howled about the terms of Sky TV’s wholesale contracts.
The details have never been made public, but comments by insiders indicate that while Sky offers a decent wholesale price (to TelstraClear for its T-Box and now Vodafone for its Vodafone TV box) it also places sharp restrictions on what rival content can be carried.
At yesterday’s briefing, Stewart (formerly with Sky in the UK) said wholesale deals were central to the industry. He was open to more, from telcos to power companies.
But will Sky open up its terms? Afterwards, the CEO indicated it would, telling the Herald, “I have no trouble sharing space with other content providers because we’ve simply got the best content. I’m very confident customers will see that and buy our service.”
He added, “If we can partner with people to get access to their customer bases, to help grow the overall footprint, then I’m delighted to do it.”
Expanded Sky Sport line-up, more streaming content
Stewart also confirmed yesterday that there will be a Sky Sport revamp during August, and a boost for its sports app.
The Sky Sport line-up will be boosted to 12 channels — all in HD — next month, with pop-ups on top of that (today Sky carries four Sky Sport channels, two ESPN channels plus two Trackside Channels and various pop-ups. The Rugby Channel was recently axed in the build-up to the revamp).
Fanpass — which is being rebranded Sky Sport Now — will carry all 12.
But, yesterday at least, there were no details on what would fill the extra channels, bar an element revealed by the Herald on Wednesday — a new daily sports news show that will be fronted by Radio Sport veteran Goran Paladin and 1 News and Campbell Live alumna Kate King.
Paladin and King’s show will form part of a new sports news channel, which will also include content from Fox Sports News Australia and Sky Sports News UK. Live coverage of press conferences is promised.
Stewart also confirmed that Sky’s Neon app and On Demand service are in for a boost — but again details are still being held close.
He did promise news by Christmas.
Stewart has already cleaned out almost every role from the company’s Fellet-era management team, and dumped a decoder upgrade scheduled for this year in favour of investing more in streaming. Yesterday, there was also apparently a new dress code, with Stewart eschewing his predecessor’s formal business attire in favour of a Steve Jobs-style black skivvy and jeans.
It was a fresh touch, if superficial. Investors will be looking for more detail on the deeper changes he’s instigating.
Sky shares were flat at $1.28 in midafternoon trading, still hovering close to their all-time low after falling 51 per cent over the past 12 months.
I have no trouble sharing space with other content providers because we’ve simply got the best content. Martin Stewart, Sky TV boss (above)