Telstra has increased the pressure on both News Ltd and the National Rugby League in its dispute over “new media” rights — and its hardball approach seems to be working.
Telstra is suing News Limited alleging News is using extensive NRL footage on its websites, undermining Telstra’s six-year, $90 million contract for “new media” rights and naming-rights sponsorship of the NRL.
The NRL, half-owned by News, has been effectively forced to side with Telstra, but that has not stopped Telstra putting very direct pressure on the NRL as well. Last week, the NRL launched court action against Telstra, which is refusing to pay the first instalment of its agreement with the NRL. The cash component is reportedly $10 million a year, and that is $10 million the NRL desperately needs.
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The timing is something of an embarrassment for the NRL, which meets tomorrow with players and club delegates to outline the league’s finances.
It is little wonder that NRL CEO David Gallop has been working overtime trying to secure a resolution in talks with News and Telstra. Today there are reports it may be “resolved” as soon as tomorrow — convenient timing given that tomorrow David Gallop will be “opening the books” of the NRL to clubs and players.
If the dispute is not resolved, then the burden of the $10 million in lost revenue will fall on News and the Australian Rugby League, which take $8 million each out of the profits of the NRL.
While the NRL finances have always been a reasonably guarded secret, we know from Phil “Gus” Gould that there is no spare cash around. Recently he was given access to the NRL financial records, and what surprised him most was that there were little or no cash reserves.
When that issue is resolved, David Gallop needs to get serious with Fox Sports about the problems caused by transferring NRL matches to the new Fox Sports Three channel. The simple fact is that not every hotel/motel/club has the Fox Sports Three channel, as David Gallop himself has found on his travels to regional centres. And now it seems that not all Austar customers have it — unless they are prepared to pay extra for it.
Rugby league is the most watched program on pay television, full-stop. The logic of denying it to every customer by putting it on the least available of the sports channels is bewildering — unless, of course, it’s about getting clubs and pubs to pay the extra for the new channel!