NZ Rugby tipped to accept $75m a year rights deal from Sky TV

Thursday, 16 January 2025

NZ Rugby would be better off running down the clock with Sky TV in a game of chicken, but probably doesn’t have the bottle, a source argues.

New Zealand rugby is being tipped to swallow a 33% cut in the payments it receives from Sky TV for its rugby rights.

A source with strong connections to the sport said the reduction in income would be catastrophic for the game, with the brunt of the financial impact likely to fall on provincial rugby unions.

Sky TV is understood to have offered two options to NZ Rugby in December.

One would see it pay NZ Rugby $75m a year for rugby rights without the local rights to the forthcoming Nations Championship rugby tournament that is due to kick off in 2026.

With those rights included, Sky is believed to have offered $85m a year.

NZ Rugby was leaning towards accepting the first offer in the expectation that it could negotiate more than $10m a year from another party for the additional rights, according to the source.

Sky TV, run by chief executive Sophie Moloney, has been in a stronger negotiating position since Spark Sport closed.

The Nations Championship, which is expected to be held every two years and first hosted in Qatar, will feature games between the world’s top 12 nations, from both the northern and southern hemispheres.

Forsyth Barr analyst Aaron Ibbotson said assuming the offers were as described, those outcomes would probably be viewed as “slightly positive for Sky but nothing fantastic”.

Sky TV has been paying $111m a year for rugby rights under a five-year deal that is due to expire at the end of this year.

That bumper deal was negotiated at a time when Sky TV was facing intense competition from Spark Sport for sports rights, and represented a near doubling of the previous $52m annual fee.

Spark announced two years’ ago it would withdraw from the sports rights market, strengthening Sky’s bargaining position and making a cut in the price of rugby rights inevitable.

The sports source said that given the importance of rugby rights to Sky, NZ Rugby would be better off turning down the deals on offer and instead running down the clock before Sky’s rights expire at the end of the year in what would in effect have been a game of chicken.

But NZ Rugby probably didn’t have the bottle to attempt that, he said.

The cut in income would be financially catastrophic for New Zealand Rugby when layered on top of its existing losses and dividends it needed to pay to its commercial partner, United States investor SilverLake, he said.

It posted a loss of nearly $9m in the year to June.

SilverLake will get paid, the professional players will get paid, so the losses will hit the community game, he said.

Sky TV reiterated the statement the company made at its annual meeting in November.

That was that Sky remained in confidential, constructive negotiations with NZ Rugby on an outcome that reflects “the value that our customers and shareholders place on this partnership”.

It and NZ Rugby shared the goal of engaging with as many fans as possible and growing rugby in Aotearoa New Zealand and beyond, it said.

A spokesperson for NZ Rugby said negotiations were “between a tight group on both sides”.

The broadcasting rights were not NZ Rugby’s only revenue source, he emphasised.

The strategy of its commercial arm was to grow revenue through rights deals and partnerships internationally, he said.