Lol.
Sky low-balled the rugby rights from $111 million per year to NZR for the 2021-2025 cycle, down to $85 million per year for the 2026-2030 cycle. This was based off the state of the economy, softer demand for their product and the non competitive domestic market. Now NZR is talking to DAZN about acquiring the rugby rights! So if Sky loses rugby, which are essentially their crown jewels, then honestly what is the point of anyone having sky?
And here I was thinking we were living in an age of sports rights that were shooting to the moon?! Well at least that's what we get told when they jack up the price eh? 🤡🤡🤡
Article from the NZH
Call it a game of cat and mouse, or maybe it’s a corporate version of chicken, but whatever label is applied, there is no lack of drama building between Sky TV and New Zealand Rugby with the latter now believed to be courting British disruptor DAZN about making an 11th-hour play to snatch media rights to the national game.
Talks between Sky and New Zealand Rugby (NZR) have been ongoing for several months, but the two parties have failed to reach an agreement after, as the Herald understands it, the incumbent rights holder offered NZR $85 million a year to renew the agreement.
That price represents a significant drop from the $111m-a-year deal that was agreed for the current 2021-2025 cycle, and has prompted NZR to seek alternative buyers. It is now believed to be talking to DAZN, the British streaming company that is in the process of buying Australia’s Foxtel.
While NZR has long been braced for a reduced offer, given the state of the economy and Sky’s long-signalled view that it would use the collapse of Spark Sport and the non-competitive domestic market to snap up sports rights at lower costs, it’s not willing to sign off on an offer which it doesn’t feel gets close enough to reflecting the value of the content slate being sold.
The 2026-2030 cycle will include a six-week tour of South Africa by the All Blacks, the 2027 World Cup, a British and Irish Lions tour of New Zealand in 2029 and then a reciprocal six-week visit by the Springboks in 2030.
The stalemate that has arisen is believed to be frustrating Sky, as it had signalled to shareholders late last year that a deal was close but then had to provide a less-than-positive update last week when it unveiled its half-year results.
Sky’s chairman Philip Bowman made specific reference to the ongoing negotiation with NZR in the company’s interim report.
He wrote: “The second key priority for Sophie [Moloney, Sky CEO] and her team that I mentioned at the annual shareholder meeting was the negotiation of a new rights agreement with New Zealand Rugby and Sanzaar.
“It is disappointing that I have no substantive news on this to report, but we acknowledge that governance changes at NZR, including the appointment of a new board with effect from 1 February, have necessarily slowed down the process.
“Whilst the agenda for the new NZR board is doubtless wide-ranging, we will continue to discuss renewal options in good faith, against the backdrop that the financial terms of any renewal must make economic sense for our customers and our shareholders.”
Sky is aware that NZR is talking to DAZN – the exclusive window to renegotiate as the current rights holder expired late last year – but sources say it is unperturbed by the development as it is not convinced that an acquisition of standalone rugby rights in New Zealand aligns with the strategic aims of the new owner of Foxtel.
DAZN, which has genuine and realistic aspirations to build the world’s best sports content portfolio – it is bankrolled by Ukrainian billionaire Len Blavatnik, with additional money now coming from Saudi Arabia’s sovereign wealth fund – recently snapped up the rights to France’s top professional football league.
But the acquisition has failed to deliver subscribers, highlighting that it remains difficult for streaming platforms to reach profitability when only offering a singular product.
DAZN has cash at hand, but most analysts believe that if it is going to make a play in New Zealand, it would be more likely to try to buy the undervalued Sky rather than rugby rights.
This view has been strengthened by its decision to buy Foxtel – a traditional satellite broadcaster – as it signals that DAZN may be conscious that some fan bases remain wedded to older technology.
This point was made recently by Sky independent director Mike Darcey on Linkedin, where he said: “Some reports have argued that this deal was all about DAZN buying Kayo, the successful sports streamer in Australia, how this is a shortcut to taking control of rights deals that would take five or 10 years to win in the market, and emphasised the other streaming angles in Binge and Hubbl.
“But it’s hard to ignore that DAZN has also bought into a large, set-top-box-based, traditional linear distribution business.
“Perhaps there is a radical plan here to shut it all down and force-migrate everyone over to streaming solutions. But I doubt it. More likely, DAZN will continue to discover just how sticky some of that traditional linear base tends to be and become more deeply enmeshed in a hybrid world.”
And it’s this same argument around New Zealand’s readiness to fully embrace streaming as its only means to consume rugby that is leading Sky to believe NZR won’t do a deal with DAZN.
Sky’s aging infrastructure has been in the news in recent weeks for failing to deliver, but paradoxically, its technology, however dated it may seem, is its trump card in the chase for rugby rights.
Rugby’s core audience remains older and rural, based in areas with patchy and slow Wi-Fi, and NZR would be taking an enormous risk to partner with a streaming platform with little brand recognition.
