Why it’s still not clear where you can watch the rugby next year

Saturday, 15 March 2025

When it comes to rugby rights, Sky TV always seems to come out of the maul with ball in hand.

ANALYSIS: In an increasingly uncertain world, there are few things Kiwis can usually rely on.

Even a random pie will at least be edible, there will always be a space to sleep at a standard DOC hut on a weekday, and you can put on Sky Sport and watch the rugby.

Until now at least.

Sky has faced a brief tussle for rugby broadcasts rights before of course, when former Spark boss Simon Moutter made a big but ultimately ill-fated tilt for the streaming sports market in 2019.

The natural order of things appeared to be restored after Spark Sports closed in 2023, but it has left an awkward hangover.

New Zealand Rugby was able to capitalise on the brief period of competition between Sky and Spark to bid up the price of rugby rights to $111 million a year.

That deal with Sky is due to expire at the end of this year.

Sky, naturally enough, wants to bring the price back down significantly and its shareholders probably wouldn’t accept anything less.

Late last year Sky is understood to have presented an offer of $85m a year for five years for the rugby, or $75m if the local rights to the forthcoming Nations Championship rugby tournament that is due to kick off in 2026 were excluded and sold elsewhere.

But the rugby union has got used to the higher income and has other troubles after global chemicals company INEOS abruptly pulled its sponsorship of the All Blacks.

Worse, it is staring down the barrel of a steady long-term decline in the relative popularity of rugby, driven by demographics and a growing interest in a plethora of often more inclusive sports.

New Zealand Rugby has every incentive to talk up its discussions with streaming sports service DAZN, but Sky will be making its own call on the threat.

In short, it is not clear if NZR believes Sky’s offer is one it can afford to swallow.

The Rugby Union has begun parallel talks with British-based sports streamer DAZN, which acquired Foxtel, Sky TV’s equivalent in Australia, in December.

There has been speculation DAZN might consider a takeover of Sky TV as well.

And in that context, it wouldn’t be surprising for it to kick the tyres on what has historically been one of Sky’s biggest assets — the rugby rights.

It is hard to assess whether there is really much chance of DAZN instead seeking to pick up from a standing stand in New Zealand where Spark Sport left off and trying to go it alone with rugby.

DAZN has been dubbed the “Netflix of sports” and it would be in the interests of NZR to talk up its discussions with the privately owned firm.

But it is probably fair to say DAZN has yet to prove its very big and bold business model, after in January reporting an increased annual loss of US$1.4 billion (NZ$2.5 billion) on revenues of US$2.8b in the 2023 calendar year.

That is a lot of red ink to be carrying into an increasing uncertain global economic environment for a company that already seems to have its hands quite full.

The most likely scenario may be that Sky and NZR continue to lock horns without much thought, on Sky’s part at least, to any feint.

But an agreement won’t come easy.

Sky and the rugby union are believed to have never left it so close to the expiry of the broadcasting rights to strike a deal.

Even when Sky and Spark were facing off for a rights deal, NZRU plumped for Sky a good 14 months ahead of the existing rights expiring.

Mark Robinson says suing Sir Jim Ratcliffe's company was the best step NZ Rugby could have taken in their sponsorship row.

Yet NZR’s commercial arm, NZRC, has had a board meeting since Sky presented its offer late last year and its broadcasting subcommittee has been meeting regularly without, it seems, choosing to accept it.

So the assumption must be they are currently entering a game of chicken.

There is chatter that the rugby union could seek to let out its rights on a shorter-term basis, say from year to year, to hedge it bets.

This is not understood to appeal to Sky.

Sky has made clear that it is open to sharing rugby rights in some way with another party.

But there is little reason to think the rugby union would squeeze more value out of its rights by dividing them up.

Which would suggest it’s either an all-encompassing five-year deal, or nothing.

Rugby is still very important to Sky, and Sky’s cash may be vital to the rugby union.

But it is an irony of negotiations that they can be harder to conclude the larger the overlap is between what two parties would ultimately be prepared to accept.

The difficulty that can lead to in dividing up the spoils was illustrated by the “failure of negotiation” that nearly saw the Tiwai Point aluminium smelter close in 2021, even though it was clearly in the interests of both the smelter’s owners and the power companies it was negotiating with to keep it open.

Most likely a deal on the rugby will be done by August, but it can’t be completely ruled out that over-confidence by one or other party could result in the risk of rugby going off-air while Sky and NZR continued an arm wrestle into next year.

One source in the rugby world is confident that if that were ever to happen, Sky would feel “the most pain first” because its investors are forward-looking.

They also point to the fact that Sky is in a better position financially than it was when it last negotiated the rights in 2018, and that it is hiking the price of Spark Sport by 12%, to $47 a month, from May.

The implication is Sky will budge and increase its offer.

But that be underestimating the limited room for manoeuvre Sky’s management and board might have if they wanted to avoid a backlash from investors for caving-in under what they might assess was no proven pressure from a credible rival bid.

Forsyth Barr analyst Aaron Ibbotson said a $75m-year rights deal excluding the Nations Championship would probably be viewed as “slightly positive for Sky but nothing fantastic”, suggesting the market probably sees its existing offer as basically fair.

The NZR might also be in danger of underestimating the degree to which Sky might calculate it could build-up loyalty and interest in other sports that weren’t such a financial drain and drama, if it assessed it was in its long-term interests to let rugby slip more into the shadows.

Out of sight, out of mind, after all.