The AFL and Channel Seven look set to reinforce one of world sport's longest-running broadcast partnerships as the two parties negotiate a potential two-year extension of the game's media rights.
Seeking some certainty amid the COVID-19 crisis that has wiped out football indefinitely, the AFL, the Seven Network and Fox Sports are exploring a new marginally reduced contract that would run until 2024.
Gillon McLachlan and the AFL and Channel Seven are negotiating a potential two-year extension of the game’s media rights.Credit:Getty Images
In a series of sensitive talks involving league chief Gillon McLachlan, his chief financial officer Ray Gunston and respective media bosses James Warburton and Patrick Delaney, the AFL is also negotiating a new 2020 rights package dependent on when and if the season resumes.
In marked contrast to the bitter fall-out between the NRL and Nine, Seven and Fox have remained publicly supportive of the AFL and McLachlan's determination to salvage something of the 2020 season.
The next financial instalment from the AFL's broadcasters is due on May 31 and the parties are negotiating a pro-rata payment dependent on the outcome of the league's intention to complete a 17-round or 153-game season, along with finals.
But the broadcasters are playing hard ball, insisting the games, should they eventuate, will be worth less due to the compromised nature of the season.
Given the certainty of lessened broadcast revenue in 2020 it is understood Seven is open to maintaining reduced, four-times-a-year instalments, easing the short-term pain for the competition by averaging the broadcast rights money over a two-year period or even longer.
The prevailing view is that the AFL is unlikely to resume the 2020 season until July and that it could start as late as the end of August and still achieve a premiership result.
The prospect of the grand final being staged outside Victoria in that event remains strong and all parties remain open to a night or twilight play-off.
Like the Nine Network, both Seven and Fox have also pointed out that this year's games have lost some value due to the absence of crowds, their reduced length and the prospect of them being played at smaller, less broadcast-friendly venues.
Seven West Media and News Corporation, which contributed the bulk of the record six-year, $2.5 billion media deal to broadcast Australian rules football until 2022, like the AFL are seeking stability along with the opportunity to make some savings over the long term.
The Age revealed last August that McLachlan had spoken with former Seven boss Tim Worner about the possibility of extending the deal by two years given the uncertainty of the changing media climate.
Those conversations have continued since Warburton replaced Worner but an extension seems contingent upon Fox Sports' involvement. Despite the financial struggles of both media companies the prevailing view is that weekly AFL games over 23 weeks of the year plus four weeks of finals remain fundamental to both businesses.
Having reduced AFL staff numbers by 80 per cent in the short term, overseen similar cost cutting across the 18 clubs, negotiated a reduced pay deal with the players for 2020 and secured a $600 million line of credit from NAB and ANZ, McLachlan must now complete the crucial media component of the puzzle in the hope that the competition can complete the remaining 144 home-and-away season games.
The AFL chief has received strong public support from News Corporation and Seven West, which has praised the competition for its decision to purchase Marvel Stadium and create a solid asset that underlined the $600 million bank loan.
McLachlan followed up last week by implementing a rescue package agreed to by the 18 clubs in which head office assumed unprecedented control over the clubs in what essentially is a receivership model.
By stark comparison Nine's chief executive Hugh Marks is attempting to significantly renegotiate down the network's NRL deal over the longer term and has attacked the code for "mismanagement over many years" for its "bloated head office completely ignoring the needs of clubs, players and officials".
The AFL's $2.5 billion deal came about following the direct intervention of Rupert Murdoch, whose News Corporation contributed $1.3 billion of the total, with Seven West $840 million in cash plus $60 million in contra.
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