This article exists as part of the online archive for HuffPost Australia, which closed in 2021.

Digital Disruption Splits Football In Two Halves

Foxtel has been a major backer of the league for 10 years as it attempted to build a suite of summer sports to fill the gap between the AFL and NRL seasons. But juiciest summer carrot gone, could Foxtel afford to prop up the A-League if viewers were too busy saying Yes to Optus?
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
Human hand holding remote control with soccer channel on the television screen.
d3sign via Getty Images
Human hand holding remote control with soccer channel on the television screen.

Australian football may very well be the first code in Australia to feel the full weight of the disruption in technology and business models sweeping across the world.

If Monday's shock announcement that Optus had fairly and squarely outbid Murdoch-backed Fox Sports for the rights to the English Premier League in Australia. Not just the digital rights, but the broadcast rights as well.

It made the content absolutely exclusive in Australia.

It's fair to say that Fox Sports customers were far from pleased with the news.

For those with the local game on the mind, they couldn't help but turn their attention to the repercussions for the local A-League.

Foxtel has been a major backer of the league for 10 years as it attempted to build a suite of summer sports to fill the gap between the AFL and NRL seasons, major drivers of eyeballs for the pay TV operator.

However, with its juiciest summer carrot gone, could Foxtel afford to prop up the A-League if viewers were too busy saying Yes to Optus to pay for Foxtel packages?

On the flip side, did it mean that Foxtel would double down on the local league and attempt to build a major code?

Would Optus bid against Foxtel during the next round of A-League broadcast negotiations?

As the possibilities played out in the realm of hypothetical -- one thing was becoming painfully clear: the A-League will become the first football code to be exposed to the full winds of digital disruption.

The latest AFL and NRL deals were more or less the same as the previous ones. A free-to-air component, a pay-TV component, and the digital going to Telstra. The amounts varied, but the deal structures were very similar than the previous deals.

However, those behemoth multi-billion dollar deals are not exactly ripe for a telco to come in and take on the broadcaster.

However, the Premier League and possibly even the A-League may be available at a price point the telcos would be interested in.

For Optus and other telcos, the rationale for sports content is pretty clear. Sport is being read as a piece of content which is 'sticky', something they can bundle in with phone or broadband subscriptions.

Optus has already achieved this with Netflix. When the U.S. streaming behemoth straddled its way Down Under in March, soon the ads offering Optus customers six months of free Netflix began. It dangled a carrot to potential customers who may have been sitting on the fence over whether to switch teams.

Telecommunications companies are now talking about being media companies. Their play is pretty simple: control the pipes, and control what's coming through the pipes.

Vertical integration 101 right there.

For broadcasters though, sport is increasingly the only way they can get the mass audience media buyers and brands love. If you want to talk to a million people are the same time, you can do worse than buying a spot during Friday Night Footy.

Once upon a time, Foxtel was immune from such thinking. It had a subscription-only model and could go ahead and build a suite of more niche titles to get people to buy subscriptions. Think Netflix.

However, as soon as it started offering advertising, it needed a vehicle from which to offer advertisers big audiences. Enter sport, and its ability to capture a big audience.

Foxtel through sales house MCN has this revamped its sales offering to include the cutting edge of programmatic advertising, something which is so in-vogue with media buyers it hurts.

However, with more and more television content being delivered through IP protocols, both free-to-air broadcasters and subscription TV players are finding telecommunciations companies are becoming their rivals in the content game. The AFL and NRL have tied down their broadcast deals recently, but the A-League still needs to re-negotiate for the seasons past 2016/17.

If telcos are bidding for EPL broadcast rights now, what happens in a year?

What's not clear is whether the new digital environment will come with the truckload of cash the Football Federation of Australia is looking for (rumoured to be $80 million a season), and much will come down to the sales job FFA does with the competing parties to justify the price tag.

The only thing that's clear in a media environment where telcos are buying up sports broadcast rights is that the FFA can expect the unexpected. Not only does the FFA have to get a handle on the legacy media players and the relationships within them, it needs to start to play nice to emerging media companies.

Close
This article exists as part of the online archive for HuffPost Australia. Certain site features have been disabled. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.