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September 4, 2012

The Rule Book: 4 key steps to negotiating a deal with broadcasters

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Significant new broadcast deals are on the horizon for Football Federation Australia and Cricket Australia. Eugenie Buckley of Suiko Consulting worked on the inaugural broadcast rights deal for the A-League and deals for the Socceroos on both free to air and pay television stations, including negotiation of rights from the AFC. In addition, she negotiated and finalised the eight year global broadcast and media rights deals for the International Cricket Council. In this piece she looks at the essential ingredients of a successful rights negotiation.

 The sale of broadcast and media rights provide professional and major sports with their largest source of revenue. This revenue is crucial for re-investment to promote and grow the game from grassroots through to national leagues and national teams.  Consequently sport needs to maximise the value of these rights.  At the same time, sport has a custodian role and it needs to protect its integrity and its future. This article provides insights into managing this careful balancing act.

 

1. Choose your sales strategy: ‘Sell the farm’ or ‘slice and dice’

 At law, there are no proprietary rights in a spectacle or sporting event and so no-one actually owns the right to broadcast an event.  What a media institution actually buys is a bundle of rights that will enable it to broadcast the event.

 Exclusivity is a given. That bundle of broadcast rights can be broken down into various categories, platforms and delivery mechanisms, including by:

  •  Time – live, deferred, delayed, highlights;
  •  Territory –Australia, +New Zealand, +Asia, worldwide;
  • Platform – television, audio, internet, mobile and emerging new medias;
  •  Content type.

From a platform perspective, there are essentially three sales strategies.

 With continual advances in technology (including web-streaming, WAP, 3G/4G, DVHB, IPTV and mobile TV) there is a technology convergence and so often broadcast rights are sold on a platform neutral basis.  That is, the rights holder has the right to transmit over any and all platforms, including television, radio, website and mobile. If this strategy is pursued, the reserved rights discussed below become more crucial to ensure a broad and substantial customer reach.

 Another option is to ‘slice and dice’, that is separate and sell the bundle of rights to different media institutions, including broadcast and radio networks and mobile and telecommunications providers. Rights need to be very clearly defined under this option to ensure there is no overlap between rights granted to different parties.  It is also possible to place some restrictions around the number of minutes of live match footage that can be broadcast on mobiles or on the internet.

 The final and often the best option is a mixture of both. A sport could sell its premium content on an exclusive and platform neutral basis and standard content on a non-exclusive basis. This maximises customer reach – and is likely to keep the ACCC happy too!

 2. Reserve rights to promote the sport

 A sport needs to ensure that it can maximise customer reach. Regardless of the sales strategy, a sport should retain sufficient control and rights to enable it to promote itself both during and after the broadcast agreement.

The following reserved rights should be considered in negotiations. To protect the investment of rights holders, these rights will have negotiated limitations such as number of permissible minutes of footage able to be used and at what time after the conclusion of the match or event they may be transmitted:

  •  Clip rights – clips may be used by the sport itself and its sponsors;
  • News access rights – specified maximum number of seconds/minutes of footage that may be incorporated within a national news program.  (This is in addition to the fair dealing for the reporting of news exemption under copyright laws which ensures the general public has the right to be informed of the news coverage of sport – although the envelope is regularly pushed on this!);
  • Still images – photographs;
  • Fixed media rights – DVDs, CD-Roms, VCDs, memory sticks and other storage devices so that sport may sell DVDs of matches for sale to general public; non-commercial coaching and education purposes; internal reporting and archive purposes;
  • Interactive Game Distribution Rights – such as audio visual or other electronic games;
  • Public Screening Rights – match footage on live sites and in designated fan zones;
  • Closed circuit rights – such as CCTV within any venue to the sport’s hospitality boxes and functions; and
  • Non-Match rights – footage from player interviews, player diaries and warm up and training sessions (with a possible cap on duration of continuous coverage).

 3. Protect Your Sport’s Integrity

 A sport needs to retain ownership of any footage, especially for historical and archival purposes.

 A television audience can number into the millions, which means the spectacle is very important and needs to be of the highest quality. Sports content must be broadcast live and on main channels. Rights holders and sports need to agree minimum broadcast obligations (and corresponding monetary spend) and technical specifications. These are quite sports specific, but should all specify minimum numbers and types of cameras used and their respective locations as well as dynamic graphics packages. A sport would be wise to obligate its right holders to continually innovate and always use the latest state of art technology, such as the HSSM (High Super Slow Motion) cameras recently used at the London Olympics.

 4. Never forget your fans!

 As well as fan friendly scheduling, fans should be able to easily access sports content wherever they may be and whenever they desire. This includes innovations in web streaming, apps and twitter feeds. A sport (and its rights holders) should be supportive of new technologies that support this, subject to necessary safeguards.

Image: Fairfax


One Comment


  1. Great read Eugenie

    I believe for the A league to truly grow over the next 5 years they MUST secure free to air coverage for at least 2 games a week. The strictly fox sports is hurting the A league. This also includes Socceroos games.



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