Analysis:
Rugby rights a long game Missing out on the world cup might not be a huge loss for Sky, writes Tom Pullar-Strecker.
Sky TV has failed to convert the dominant possession it holds over sport rights and has missed out on becoming the preferred bidder to broadcast the 2019 Rugby World Cup.
Spark and Television New Zealand have not confirmed whether they are the preferred joint bidder for the rights to the six-week tournament in Japan.
In fact, they haven’t even confirmed the open secret that they did put in a joint bid last year.
But it is probably safe to assume they have it in the bag.
Rugby fans should not get too excited that a Spark/TVNZ deal would see all – or even more games than usual – go free-to-air.
It would have cost the companies to outbid Sky, and Spark, rather than state-owned broadcaster TVNZ, is likely to have agreed to foot most of the bill.
Spark would want to get a return for that spend, while TVNZ could be expected take on the freeto-air role usually filled by Prime.
But it should at least be easier for Spark, as a pure internet TV provider, to offer more flexible paid options to watch the cup than Sky has previously offered.
It could, for example, offer all games streamed live for a fixedprice subscription, or individual matches on a pay-per-view basis.
Sky shareholders let out a collective groan when Sky announced it had kicked short of the crossbar, and shares immediately fell 8 per cent.
In itself, missing out on the Rugby World Cup need not be a huge loss to Sky.
Ironically, departing chief executive John Fellet has a point when he argues the premier rugby event may not be a big drawcard for Sky Sports.
Most major games need to be shown free-to-air anyway, and the pool-play matches Sky can keep behind its paywall may largely appeal to more committed fans.
First NZ Capital research head Arie Dekker believes the loss is ‘‘largely irrelevant to Sky’’.
No competitor could build a rival platform to Sky Sport on a six-week long block of content, he says.
‘‘There will have been a price that Sky will have been willing to pay in return for additional advertising revenues and the subscriptions to Sky Sport they would have got for a period of time,’’ he says.
‘‘But they won’t lose sleep over the fact that somebody has six weeks of content.’’
The latter is a fair point, but it is also one that won’t have been been lost on Spark and TVNZ when they decided to put in a joint bid.
It is not clear they see the Rugby World Cup as a one-off.
Fellet acknowledges that Sky is also vulnerable to being outbid on All Blacks end-of-season tours.
Sources suggest Sky got close to losing the rights for the 2015 Rugby World Cup and that pressure from NZ Rugby was instrumental in ensuring that did not happen.
If NZ Rugby decided this time to sit on the sidelines, that may be a separate worry for Sky.
As one threat to Sky Sport grows, another is perhaps receding.
Speculation that Amazon might snaffle up rights to Super Rugby for its Amazon Prime Video service is looking a bit overblown. It turns out that its documentary on the All Blacks is just one of a series it is producing on successful sports teams around the world.
Certainly, Fellet doesn’t appear to see signs that Amazon is about to pounce, pointing out that Amazon is not producing weekly content anywhere in the world.
All up, the timing of the Rugby World Cup loss couldn’t seem much worse for Sky.
It comes just two days after Fellet announced he intended to hang up his boots, and as investors wait nervously to see the impact of the price cut to Sky Basic.
The loss will inevitably heighten the growing sense of crisis.
But whether it will materially contribute to that crisis depends on decisions that may not yet have been made – by Spark and by NZ Rugby and others and, yes, perhaps still by Amazon.