Sky rejects talk of Sanzaar exit as share price hits new low
We’re very comfortable in our relationship and South Africa’s relationship with Sanzaar. Like us, they’ve signed agreements with their broadcasters through 2025 to be involved with Sanzaar.
Mark Robinson, Rugby NZ CEO (left)
Sky shares touched a new intraday low of 64c (for a market cap of $283 million) during morning trading yesterday.
The latest slump followed a Daily Mail report over the weekend that South Africa wanted to leave Sanzaar by 2024 in favour of joining Europe’s Six Nations competition. Secret talks were said to be under way.
New NZ Rugby CEO Mark Robinson played down the report, telling Radio Sport’s Jim Kayes:
“We’re very comfortable in our relationship and South Africa’s relationship with Sanzaar. Like us, they’ve signed agreements with their broadcasters through 2025 to be involved with Sanzaar. And as recently as this week we were on calls talking about the future of our competitions at Super level and international level. So Sanzaar and certainly South Africa were very engaged in those conversations.”
As did Sky comms director Chris Major, who told the Herald yesterday, “The media speculation on the weekend is nothing more than that — speculation.
“Our renewed broadcast deal is also from 2021 to 2025. We have a strong relationship with NZ Rugby and our Sanzaar partners, and we will continue to work together on ways to grow and nurture the game.”
Herald sports writer Gregor Paul also thought the Daily Mail could have the wrong end of the stick with its report of South Africa joining the Six Nations to turn it into a seven-country tournament. The timing is right — the Six Nations are about to negotiate a new TV deal — but Paul told the Herald that the 137-yearold competition is deeply conservative. It took an eternity to add Italy. It was by no means a done deal that a seventh member was being added in a hurry.
More so, Paul said that although Sanzaar has its challenges with Super Rugby, the Rugby Championship remains a strength — particularly All BlacksSpringbok games, which remain very popular and big money spinners for NZ Rugby and the South African Rugby Union.
But Paul did see the Daily Mail report as symptomatic of deeper problems in rugby.
And he does see Europe tempting South Africa — but at the club level.
He noted talk that CVC Capital — the deep-pocketed former owner of Formula One, which has already invested in domestic rugby in the UK — is planning a new, Europe-wide club competition.
Paul thought that development could draw more South African clubs to Europe, where the Cheetahs and Kings are already playing in the “Pro14” league, which also involves toptier teams from Ireland, Italy, Scotland and Wales.
“You can travel from South Africa to London and stay in the same time zone,” Paul said — a regime that’s much easier on players.
“Half the Springboks World Cup squad is playing in the UK or France already.”
Paul also noted the tumult across the Tasman, where a ratings dive means Foxtel is no longer willing to pay Rugby Australia around $60m a year — and rights seem set to go to Optus for half that amount.
Poor crowds and declining TV audiences were partly down to the fact that “Australians don’t want to see their teams being thrashed by New Zealand teams,” Paul said.
He sees a desire for a restructure that would see more clashes between Australian teams.
Paul sees more Super Rugby restructuring ahead, beyond Japan’s already-flagged departure. But between so many South African players — and possibly soon more teams — heading to Europe, and Rugby Australia’s looming financial hit from Foxtel, it was tricky to see how it would play out — beyond the fact that it could be a complete rebuild within the next five years, and quite possibly far removed from the competition that Sky and other broadcasters signed up to for 2021 to 2025 — if it even survives; a point on which he is pessimistic.
NZ Rugby holds a 5 per cent stake in Sky, which was awarded as part payment of its new five-year Sanzaar deal (which the Herald understands is worth a total $400m).
The union is locked into its stake for two years as part of its contract.
One professional investor raised the question of whether South Africa leaving Sanzaar would constitute a force majeure that would allow NZ Rugby to be released from that clause.
NZ Rugby did not immediately return a response on that point.
The weekend also saw more developments on the so-called direct-to-consumer (or “D2C”) streaming front, with English Premier League chief executive Richard Masters announcing plans to trial an in-house streaming service from 2022.
If it goes ahead, “Premflix” will form part of a nascent trend for contentmakers and sporting bodies to cut out middlemen like Sky and Spark sport to sell and stream directly to consumers.
August last year saw Sky go on the front foot in rugby streaming as it bought global player RugbyPass in a deal worth up to US$40m.
Through a deal with Sanzaar, RugbyPass has rights to Super Rugby and Tri-Nations Rugby, among other content, in 60 countries (39 of them exclusive) across Asia-Pacific and Europe.
At the time, RugbyPass founder Tim Martin told the Herald that some 25 million people per month were accessing the service’s free content, with around 20,000 stumping up US$14.99 ($23.40) per month for its paid service. Martin saw the paid figure jumping to the single-digit millions in the years ahead.