Acting local only chance of HAL FTA success

by Mark van Aken on Jun 07, 2012

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There are plenty of forces working for and against football in Australia, and more specifically the A-League.

Let’s look at the positive aspect of football being — relatively speaking — equally popular across most markets in Australia. By this I mean, roughly the percentage of people in Perth that have a genuine interest in football and are the existing or potential market for the A-League is roughly the same as in Sydney or Melbourne.

This theory is intertwined in the PFA’s masterpiece document Australian Premier League For the Fans which outlined the players’ union’s vision for the new national competition that became the A-League.

That document is nearly a decade old, but it is still intrinsically a relevant and guiding document for the game. Many of its points were picked up in the formulation of the new league, many were not, but I digress.

There are frequent and vocal calls for the A-League to be shown on free-to-air television. The theory is sound; without access to all Australian households (versus the roughly one-third that subscribe to Foxtel, Austar etc) football, or more specifically the A-League will fail to grow.

There really is no hole in this theory, but the stone cold commercial truth is that the A-League and its parent, FFA, are reliant on the dollars from Fox Sports who pay over the odds for exclusivity. That exclusivity must be absolute for it to deliver value for Fox.

It’s pretty simple, while the A-League has foreseeably grown into a product that might spike at least some interest from FTA networks, it hasn’t done so to a point where channels 7, 9 or 10 will pay handsomely for it. What’s more, if you throw a game or two each week on FTA then Fox will likely take its bat and ball and go home, leaving the TV rights cupboard decidedly bare.

It’s a pretty simple business model. Buy up TV rights to people’s favourite sport then sell the sport to them. If they don’t pay, they don’t get. In my opinion the reason that Foxtel has enjoyed traditionally greater penetration in NSW and QLD is because of rugby league’s skinny FTA presence and rugby union’s almost non-presence versus AFL. This may slowly change in 2012 and beyond with half of the AFL’s matches disappearing behind Fox’s pay-wall.

The existing deal between FFA and the A-League is worth in the vicinity of $120-million over seven years. That’s $17-million annually and change, and includes the golden goose that is Socceroos matches.

It’s chicken and egg stuff, but the reality is FFA simply has no choice but to cosy up to Fox Sports as the current deal expires over the next year.

Sure if the Socceroos moved to FTA, FFA could make up some lost TV dollars from increased sponsorship that the foreseen greater exposure brings, but it’s a risk, and short term at least, it’s unlikely to net same-same returns.

Remember a good audience on pay TV — and the Socceroos delivered the biggest ever audience for pay-TV at 431,000 in 2009 — is relatively small potatoes on FTA. For example channel 7’s Friday night AFL coverage (which have historically not even been live) draws in an average audience of 800,000 – with big games bringing in another 500,000 on top of that while Nine’s equivalent NRL broadcasts draw in similar figures.

That said, it’s anyone’s guess what the Socceroos might pull if unleashed on FTA.

Back to my original point. While football has an even spread across the board, it’s coming from a long way back. Let’s say, for the sake of argument, 20% of people in all cities are the existing audience for the A-League. The flip side here is that 80% aren’t interested and this is why it’s difficult to make the league a FTA product.

And my tip here is that the interest of those 20% dips dramatically when the home team for any given market isn’t playing. What I’m saying here is that an Essendon fan probably has more interest in a Geelong vs Hawthorn game than a Victory fan has in Adelaide United vs Brisbane Roar. I could be wrong.

So on to the point that many fans throw up – which is getting one game a week on FTA. But how would this actually work? If it’s a random game of the week scenario this is surely doomed to fail on the commercial networks anytime the game features a pair of out of market teams. By this I mean how many people are watching Perth vs Brisbane in Adelaide or Sydney on Nine or its digital channel Gem?

So the next logical step would be to structure a deal where the solo game on FTA in any given market always features a home team. Eg Nine/Gem in Adelaide show the Reds EVERY round… Nine/Gem in Melbourne show the Victory or Heart EVERY round and so on. This might work and deliver something towards the critical mass the FTA folks need.

The problem with this however, as Fox would be Usain Bolt-like to point out, is thus: If you can see YOUR team on TV for free every week, then are most punters likely to be lured to Foxtel to watch the rest of the comp? The answer would invariably be no, and your chances of Fox paying anything near the $17-million, or the $30-million plus FFA would be preying for in its next deal, would be similar to Robbie Kruse winning Mr Universe.

So what’s the answer? In my humble opinion FFA has little choice but to continue robbing Peter to pay Paul and remain the exclusive property of Fox Sports. They can then only hope that the next period sees enough growth in the sport that it can one day poke its head on to FTA.

Ironically if Fox is successful with its AFL push in the southern states and the new NRL TV deal delivers, as expected, more live and exclusive action, it’s football’s rivals that may help grow Fox’s subscription base and by association the audience for the round-ball’s flagship local league.

What do you think?