The problem is the A-League is not the best of the best and football is a hard proposition for free-to-air broadcasters who rely on advertising revenue as their source of income. There are hardly any game breaks to sell ads; throw in the costs of production and the fact a network could air something else that would get more ads at a lower cost and it simply doesn't make financial sense.

For sports such as AFL, NRL, cricket and tennis, the costs are high, but there are more ad breaks to help monetise the deals – although the sports remain loss leaders.

But, importantly, because these sports see the best players in the world, there is a more reliable audience, which firstly helps sell ads, but secondly helps cross promote the slate of other content those networks have.

The NRL and AFL seasons, which run on Nine and Seven respectively, help both of those networks promote potentially five different shows across the year, helping draw viewers into programming outside sport, which broadcasters can then sell ads for.

For the Australian Open and cricket, again Nine and Seven respectively, they provide a summer platform to bring viewers and in promote shows ahead of the beginning of the ratings years.

Even then, the dynamic has changed. In the world of on-demand viewing, broadcasters can no longer guarantee the millions that tune in to watch sport will come in and watch the TV show before the event or stay with the network after it finishes.

This is all without taking into account the reach and publicity free-to-air broadcasters can give sports, including outside the broadcast of a game – think The Today Show at the Australian Open on Nine, or Sunrise hosts talking about the AFL on Seven.


Perhaps the biggest difference coming is the position of Foxtel. In years gone by, Foxtel was a licence to print money, but now Murdoch's money machine is battling the changing landscape as well.

"All the price inflation has been driven by Foxtel and they’re seemingly changing strategy around sports rights," Martin Currie Australia research analyst Patrick Potts, whose portfolio holds Nine and Seven, says. "You expect that inflation will be taken out, which will be positive for broadcasters in that the cost of sports rights should, if not diminish, not show the same level of inflation."

Foxtel, which has been the kingmaker of record sports deals, is no longer in the financial position to keep pushing rights costs up. A cost base of $2.56 billion, borrowings of $US1.33 billion ($1.93 billion), which it hasn't been able to refinance and has another $US150 million debt placement that expires this week, mean Foxtel won't be writing bigger cheques at the next round of negotiations.

Sports that have relied primarily on Foxtel may be facing a reckoning. Rugby, the rights of which expire at the end of the 2020 season, will be the canary in the coal mine which almost all sporting codes will be watching. While it is less reliant on the Australian market than other sports – the deal is done by the code's governing body SANZAR (South Africa, New Zealand and Australia Rugby) and sees big contributions from South Africa and Europe, Foxtel is unlikely to have an appetite to pay more.

Cricket and tennis are now locked up until 2024. But, AFL and NRL, the current deals of which are worth $2.5 billion and $1.8 billion respectively, both run to 2022 and the sporting bodies are likely exploring what their next contracts will look like.

Optus has jumped into sports rights with the English Premier League, World Cup and other European football tournaments, but it has signalled its next content acquisitions, if any, will be entertainment rather than local sport. Telstra, which owns 35 per cent of Foxtel, has mobile rights for sports such as AFL and NRL, but has stressed it won't be competing with Foxtel.

In this environment, it's no surprise AFL executives travelled to the US to meet with Facebook, Amazon, Google and Twitter ahead of its next rights deal to drum up potential competition. While Facebook and Twitter have signed sports deals in Australia, they have been largely for highlights and both have signalled they aren't likely to stump up and take rights from free-to-air and pay TV broadcasters with multibillion-dollar deals.

"The rhetoric seems to be around doing sharing deals with broadcasters rather than taking over rights. We’ll see if that’s true or not," Deloitte media partner Leora Nevezie says.

"My impression is they go after global sports where they can monetise in lots of markets. Australian-centric sports in a smaller market probably fall way down the list."