We've written so many times about the coming end for Australia's free-to-air broadcasters, and they've just received another nail in their coffin.
In previous articles we suggested that without sports or news programming, the three free-to-air (FTA) broadcasters, Seven West Media Ltd (ASX: SWM), Nine Entertainment Co Holdings Ltd (ASX: NEC) and Ten Network Holdings Ltd (ASX: TEN) would struggle to retain viewers and as a result, lose advertisers.
The Daily Telegraph is reporting that News Corp (ASX: NWS) has announced that every National Rugby League (NRL) game will be shown live on its Fox Sports channel, in a deal estimated to be worth $1.7 billion. The soon-to-be-announced deal will see broadcast rights from 2018 to 2022 go to Fox Sports. The pay-TV broadcaster already covers all Australian Football League (AFL) games live.
State of Origin will reportedly remain on free-to-air, apparently because it is more valuable than even the NRL Grand Final. Nine will reportedly keep 3 NRL games a week, with Channel 10 possibly getting one game. That appears to be the NRL's wish to get the bigger audience available on free-to-air TV. Only 30% of Australians currently have pay TV (Foxtel).
Essentially, this is just another step towards major sporting events being broadcast by non-FTA channels, be it streaming over the net or via pay TV. I still think that there's not enough room for three broadcasters, and one of them will disappear in the not too distant future.
Despite my dire predictions for the three FTA broadcasters, I could actually see them diversifying so they become much more than just broadcasters. But they will need to do it soon, or struggle for years like News Corp and Fairfax Media Limited (ASX: FXJ) have found with their newspaper businesses.
