Rugby Australia on high alert as major broadcaster goes on 'cost-cutting measures' in sports rights

Rugby Australia has been given a scare just as negotiations for the next rights cycle start with current rights holder Foxtel announcing it will be undergoing cost-cutting to its sports budget, according to a report by the Sydney Morning Herald.

After Foxtel shelled out record-deals to secure other sports like the NRL and a ground-breaking billion dollar deal for the cricket, how much left over for rugby had been widely questioned as the code struggled for relevance and Australian teams performed poorly in the flagship Super Rugby product over the last few years.

In a market statement, ASX listed Newscorp, the parent company of Foxtel, advised investors they would be cutting spending on 'non-marquee sporting content' after a financial loss of $417 million in 2018 and the need to refinance $US1.68 billion in debt. The sports that Foxtel has shelled out megabucks for haven't driven a significant uplift in subscribers according to the Sydney Morning Herald.  

With rugby union a niche footballing code behind AFL and NRL, they could well fall under the 'non-marquee' bucket. The A-League football rights deal doesn't expire for another three years until 2022/23, putting rugby under the spotlight. It is understood that negotiations have been 'constructive' so far.

The broadcasting revenue is a significant income stream for each union and even a reduction in the previous price would have serious implications for Rugby Australia. Having the current rights holder reduce it's bid or pull out of the equation altogether could have catastrophic implications for the game. Many high-profile stars could likely to find their next asking price wanting with a seriously reduced Rugby Australia budget.

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