Sky TV secures rugby rights, but profits drop 58%

Friday, 22 August 2025

Sky made its rugby rights announcement on the same day as releasing its results for the year to the end of June.

Sky Television has struck a comprehensive deal with New Zealand Rugby to continue broadcasting rugby after arduous negotiations over what is assumed to be a much reduced offer price.

The company made the announcement at the same time as reporting a 58% drop in its profits for the year to June, which fell to $21 million. Its revenues fell 2.1% to $751m.

Chief executive Sophie Moloney told The Post that Sky had yet to see strong evidence of an economic recovery or a change in attitude from consumers towards spending.

“Sadly, no, we're not seeing a big shift. Right now we're thinking the rest of this calendar year looks pretty challenging. We'd be hopeful, as always, that things might shift at the start of next year.”

The deal with New Zealand Rugby and its international partners will run for five years and was only finalised at about 7.30am, she said.

Last year Sky is believed 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 next year were excluded and sold elsewhere.

Sophie Moloney says the deal with New Zealand Rugby was nailed down at about 7.30am, 1½ hours before it latest annual result was released on the NZX.

Negotiations over the terms of an agreement continued for long after that, however a sports industry source said the new deal including the Nations Championship was agreed at $85m a year, with Sky not budging on price.

Sky is understood to have agreed to have paid $111m a year for its rugby rights under its current five-year deal, which is due to expire at the end of the year, and which was negotiated at a time when the pay-TV firm was facing intense competition from Spark Sport.

NZ Rugby advised today that price was renegotiated in the wake of Covid, though a source said the fee-drop was only a few million dollars. The rugby body has been approached for further comment on that.

The heat came off competition for the rights after Spark Sport folded in 2023.

The new deal covers all All Blacks matches played in New Zealand and NZ Rugby’s partner countries, including the Bledisloe Cup and The Rugby Championship and new tours between the Springboks and the All Blacks, the Nations Championship and the 2029 British & Irish Lions tour.

The domestic rights include Super Rugby Pacific, Super Rugby Aupiki, Super W and provincial matches.

However, New Zealand Rugby has reserved the right to play up to five All Blacks and Black Ferns matches respectively overseas over the five-year term, outside of the scheduled competitions, to “support its efforts to increase its revenue base”.

167,000 customers are now using Sky’s latest Sky Box, and Moloney says they have a greater tendency to stick with its service.

Local rights to broadcast those matches would be negotiated on a “match-by-match basis”, Sky said.

In another concession understood to have been secured by NZ Rugby, the sports body and Sky will sub-license a selection of domestic matches for free broadcast by TVNZ. Those will include all NPC matches and “a selection of Heartland and Farah Palmer Cup matches”, but with the games also available on Sky.

NZ Rugby chairperson David Kirk indicated no disappointment with what had been negotiated saying it was “delighted to confirm this new agreement”, which he said would see Sky “remain the home of rugby in New Zealand”.

Moloney said that while the terms were confidential, Sky was confident it had reached a position that was “sustainable for Sky over the five-year term and … also supports the long-term health of rugby in New Zealand”.

The deal will be subject to a vote by Sky shareholders in November, because of the relative value of the transaction.

Sky shares were up 6.4% at $3.17 in lunchtime trading on the NZX, in the wake of the announcements.

Commenting on the company’s financial performance for the year, Moloney described it as a solid result in the context of a “challenging economic environment and a complex satellite migration” and which also saw it complete important projects, including its preparations to acquire TV3-owner Discovery NZ, which is now owned by Sky.

“We've had good growth in Sky Sport Now, broadband and advertising, but it wasn't strong enough to offset the Sky Box decline,” Moloney said.

“Our stand-out performer is Sky Sport Now, but that said, there are also some green shoots in terms of our box business.”

The take-up of its latest Sky Box, which offers a Netflix-like user interface, has reached 167,000 and “the ‘churn profile’ of those customers is hugely improved, so we know we are on the right path”, she said.

The company has increased its total dividend payout to 22 cents a share, from 19c last year, though its operating profit and dividend appear a little lower than some analysts’ expectations.

Its net profit was reduced by one-off costs associated with it needing to switch to a new satellite, and a change in the way it accounts for the book value of the programming rights it owns for its Neon streaming television service.

Sky is continuing to forecast a dividend of at least 30c a share next year, which represents no change to its previous guidance.