Tuesday, May 03, 2011

Billion dollar dreams

ABC Offsiders discussed interesting views of the $1b AFL deal.

Foxtel's objective is to invest in AFL to increase its household coverage from 34% to over 50% and to head towards 60%. There is a view that sports fans will not baulk at the $720 to $1,200 per year for all AFL games each week. However, the current patchwork economy is likely to have had some impact on paytv growth.

The AFL deal opens up a whole new business case for fans. It will be interesting to watch Foxtel's pricing strategy as the cost/revenue mix pans out.

The argument in favour of the A-League is that 1 million additional sports viewers will kick along soccer. However, A-League viewer numbers per game have been falling, and it is not clear that the AFL will transfer to a higher price for FFA in 2013. There is also some concern that that the AFL growth will mean that pre-season interest will completely wipe out the interest in the A-League finals.

The key factor is Channel 7's AFL gamble to push up the AFL package price. The 7 objective is to retain their no 1 ratings spot. However, if Foxtel's strategy works, it may be at 7's cost.

The Commonwealth's syphoning rules have hit soccer the hardest. Taking off the table any bargaining for key Socceroo games - that must now be shown on free to air. SBS's failure to create for the 2010 World Cup demonstrates how unfortunate it is that only soccer, union and cricket have any real national sport interest.

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