Anthony Costa

Cricket Australia’s next TV rights deal is tipped to top a billion dollars. But there’s a bigger story behind the bidding. The deal will help redefine the future of Foxtel and signal a major shift in Australian sports broadcasting.

The Netflix of Sports

Foxtel’s about to go all-in on sport.

We know from the Fox/Disney deal that the Murdochs are pivoting out of entertainment. Exclusive sporting rights will be their dam wall against a wave of disruptive digital media. 

Fox Sports Australia chief executive Patrick Delany recently ascended to CEO of Foxtel. It was reportedly a surprise appointment. But it could be a clue that sport will be Foxtel’s priority content once its merger with Fox Sports is approved.

In the coming eighteen months expect Foxtel to break-off sport from its entertainment bundle and launch a standalone digital streaming service. Starting at around $20 a month for a single device, the app will give total access to all sporting content. No connection fee, no contract, cancel anytime.

I believe this platform is well in development. It’s an aggressive play that will likely erode the $86 average monthly subscription fee currently forked out by Foxtel subscribers. But in a world of flat wage growth and budget streaming options Foxtel has little choice. It must shake its luxury price tag and become a stronger value proposition.

Subscriber growth and retention will be the key to Foxtel’s future as a cut-price sport streaming service. Foxtel can bank on its NRL and AFL audience. But with its customers no longer shackled to twelve-month contracts how does it stop a mass summer switch-off? The A-League hasn’t attracted a sufficient following to keep subscribers from clocking off. Recent A-League fixtures struggled to attract half the subscription audience of NRL trial matches and the televised training drill that was AFLX.

Foxtel needs more summer sporting content to keep subscriber numbers sticky. Cricket Australia wants to extend the BBL and push back against the encroachment of AFLW and AFLX. CEO James Sutherland has stated his wish for the BBL to finish “…with a bang …in mid-February or even later”. This would be difficult in the existing media market. FTA networks have expressed a reluctance to budge their ratings season schedules to fit more BBL. Foxtel has no such ratings season restrictions, but in the last round of broadcasting rights Cricket Australia was averse to hiding its product behind Foxtel’s pay wall. However a retooled, more accessible Foxtel with a higher household uptake would be the perfect partner to push Cricket Australia’s expansionary ambitions.

The coming transformation of Foxtel is partly spurred by CBS’ dramatic entry into the Australian media market. Gone is the prospect of grafting Network Ten onto Foxtel as a lucrative FTA feeder. CBS will increase competition for ad dollars and assets. Poaching Lisa Wilkinson for a purported $2 million a year signals that CBS aren’t in Australia to shave hairline profits off a low-cost corpse. They’re here to win, and with a $13 billion revenue base they have the dollars to do it.

CBS will likely want a chunk of BBL to launch its own CBS All Access streaming app in Australia. Nine will also want in. It’s still chafed that Ten snatched the top-rating BBL for a fifth of its unprofitable investment in international cricket.

Saturation point

The bottom line is that we’re about to get a lot more BBL on the box. Will a longer BBL season dilute the quality of the competition? Will fans care?

At the BBL’s onset I questioned the ability of the BBL to create fan identification. The new franchises felt slick and synthetic; blank slates that deliberately ditched any heritage that might hook existing loyalties and affections. In a condensed one-month season would they have the time to build a brand story?

What I didn’t get, though, is that the BBL isn’t about identification. It’s objective is saturation. Brands are a mental shortcut to meaning. To be effective they must matter to people. By Cricket Australia’s own admission BBL teams lack meaning.  As BBL Operations Manager Anthony Everard put it in 2015:

“... the research has indicated that while there’s a pretty strong following of the BBL not a lot of people have chosen to follow a particular team... A lot of fans, particularly in Melbourne and Sydney, where you’ve got two teams [each], are still to commit to a team”.

While the competition has been slow to create a mass of fans that identify with a particular team, the BBL has flourished. Its continuous night-after-night fixturing enables saturation FTA coverage at a time of year when there’s a paucity of quality programming options. In brand-speak, Cricket Australia has used its advantage as the leading summer sport to create a new product that outflanks rival codes and stifles their ability to gain exposure through differentiation.

It’s the same outflanking strategy you see whenever you go to the supermarket. Take toothpaste. The shelves are crammed with tubes of Colgate. Colgate has multiple toothpaste varieties, each claiming a different consumer benefit. In reality they probably all do much of a muchness. But their job isn’t to advance dental science. They exist to fill shelf space and cram out the competition. Most rivals in the ‘everyday toothpaste’ category are squeezed out to the bottom shelf, hiding under a wall of red Colgate boxes. 

BBL is Cricket Australia’s strategy to maximise its media shelf space and squeeze out its summer rivals. All day test matches blur into T20 nights. Double headers dart viewers across the country. Different formats attract different audiences. You might not watch it all, but you can’t escape it.

The big loser out of Cricket Australia’s BBL saturation strategy has been the A-League. The A-League has had a host of successes and shortcomings over the past decade. By far it biggest failure has been the inability to transition to commercial free to air TV before the BBL hit full momentum. A highly invested commercial broadcaster would help bridge the A-League to a mainstream audience. Yes there’s now a match hiding on One each Saturday night. But it’s an awkward overhang from Foxtel’s attempts to groom Ten into its FTA floozy. Because it’s as much about pushing Foxtel as it is about promoting football, Ten’s new owners have no interest in showcasing the telecast. Ten has no real skin in the game and the FFA drew no revenue from the on selling arrangement.

More sport, more money

Will more BBL reduce the quality of the comp? Maybe. But quality is subjective. Was the AFL better in the 90s? Is the A-League clearly superior to the NSL? The popularity of AFLW shows that criticism of quality doesn’t reduce interest or enjoyment if people have a good reason to watch. A drawn-out BBL season could be fatiguing. Or the increased exposure could lead to greater fan identification, giving teams more time to define who they are and what their story is.

Foxtel’s move to unbundle sport and go fully digital should increase uptake. To be viable it will have to retain top-tier content, which will help keep upwards pressure on broadcast rights. A more accessible Foxtel sporting package could renew the political push to water down Australia’s anti-siphoning laws, further increasing the broadcast kitty for the major codes. If enough households switch to Foxtel for their sport we might see attendance decline. But it could also be an opportunity for sports stranded on subscription television, like domestic football, to attract more eyeballs and engage with a whole new audience.

Follow Anthony @costasports

Cover image via Tenplay