EXCLUSIVE: Foxtel Boss tells Aussie Sports Codes - Cut Costs or we will Cut Coverage
Foxtel has provided a stern warning to sports governing bodies that the pay-tv provider is ready to start cutting niche sports from the service unless costs come down.
Speaking to the TV Blackbox podcast this week, Foxtel's CEO, Patrick Delany stated it was time sports governing bodies "got realistic about the value of rights generally and the utility of them because the market's no longer rising, it's contracting."
The dire warning came after a week of complaints from die-hard sports fans after no Australian broadcaster secured broadcast rights for the World Swimming Championships in South Korea.
Despite being a critical lead-up event to the 2020 Olympics, Free-To-Air networks and Foxtel opted against broadcasting the World Championships. Once a rating's powerhouse, in recent years TV audiences for LIVE swimming in Australia has dwindled.
"It was FINA being unrealistic about the value of the rights, and locally, while they have been big headlines, it costs a lot of money to broadcast something. And, I don't know how many people would've watched Mack Horton's 400 metres.”
Swimming is not the only world event to go missing from local TV screens; TV Blackbox understands no Australian free-to-air broadcaster will provide coverage of the World Athletic Championships taking place this September in Qatar. The athletic tournament will, however, receive LIVE coverage via Foxtel's EuroSport channel.
The warning from Foxtel comes at a time when Super Rugby has only one year to run on its current deal. Components of the current A-League contract are also set to be renegotiated after a two-year FTA deal recently expired.
The commitment from Foxtel to reduce "non-marquee sporting content" comes after the business posted a $417 million loss last year.
"Our sports costs have doubled in the last five years,”
stated Delany during the podcast interview.
"We pay in rights fees alone, $200million to each of them (AFL and NRL)," "And then we've got to produce them all. I mean, producing every game at the stadiums and then doing all the shows. There are 450 people in our sports division."
"So very big costs and it's going to be a matter of being very brutal in terms of what is really needed for our subscribers and what's not."
"I think these days the metric that we use is going to have to be a little bit harsher on what stays and what goes and that applies to all genres, not just sport."
The move by Foxtel to cut costs will likely see more marquee sports codes take up the option of producing their own match-day coverage, and supplying the vision to local broadcasters, a move already embraced by the National Basketball League who supply vision to Fox Sports and NINE.
“We had a red hot go on that, and we found, while Larry Kestelman is doing a fantastic job, - they're getting full stadiums, it's going to take a while for viewership to build. So that's something that we couldn't continue with, but I'm glad it's still on the (Foxtel) platform.”
While looking to cut costs around under-performing sports, the pay-tv broadcaster is increasing its commitment in other areas such as 4K broadcasts of AFL, NRL and Cricket.
"We've got every Formula 1 race in 4K. We're about to do the whole of the Rugby World Cup in 4K."
"It's very expensive for us to do because on the games we cover locally, we've got to have a second set of trucks that do the 4K pictures. Then we've got to get the 4K pictures back to Foxtel."
"If you think about a normal broadcast, the way it works is we send a truck that puts the cameras at the stadium and then we have dark fibre that pushes all of the cameras feeds back to a hub. That's not possible with 4K because 4K is four times bigger than HD.
“What we've got to do is mix it at the field and get the 4K picture back. Then it's compressed and goes up on the satellite; You can't do it over the internet, not a live picture like that."
The pay-tv broadcaster also has high hopes for its cricket coverage this summer, as suspended stars Steve Smith, and David Warner return.
“We think the ratings will be bigger this year."
"It'll be great for reducing the number of people that seasonally leave Foxtel. This year, for summer, we won't just be focusing on cricket, we'll be focusing on all the other genres as well. But of course, the investment in cricket has also helped us create the Kayo service. And Kayo, being a streaming service, really is driven by events."
Along with live sports coverage, Fox Sports has worked to keep viewers more engaged between matches by developing dedicated channels focused on the big marquee sports of AFL, NRL and Cricket.
"There are 28 shows every week that we produce."
"We've developed the craziness of things like The Beep Test and Bounce in Melbourne."
"And in Sydney, Brisbane, for the NRL, the Matty Johns Show is, I think probably the phenomenon of the 2000s. If the Footy Show was big on Nine pre-2000, this thing's just massive."
The full interview with FOXTEL CEO, Patrick Delany can be listened to in this weeks TV Blackbox podcast.