Telstra in the big league with its $100m NRL deal
The deal signals its continuing strategy of expanding its media assets as it loses its old copper network.
The five-year deal will give Telstra the right to stream eight games a week, plus special events such as state of origin, the finals series and Test matches over the internet and to tablets and mobiles. But the News Ltd-owned Fox Sports still has the right to broadcast five games a week to tablets and internet-enabled television under an early agreement signed with the league, a spokesman confirmed.
"Australians have embraced smartphones and tablet devices, and this partnership provides for us to make the app and its live coverage available to all NRL fans where and when they want it," Telstra's chief executive David Thodey said at a press conference in Sydney.
Telstra will make NRL content available to fans on any mobile network, but will charge non-Telstra customers an extra fee. Telstra declined to comment on the monetary value of the deal. But the Australian Rugby League Commission's chairman, John Grant, indicated that the new five-year deal with Telstra would be worth more than $100 million and "double" the value of the previous deal.
The new deal with the NRL follows Telstra's $153 million agreement last year with the Australian Football League to stream matches live over the internet from 2012 to 2016. Telstra's move underscores its strategy of becoming more than just a telecommunications infrastructure provider.
Industry analysts say companies such as Telstra and Optus are re-orienting their services provision towards more media-centric platform.
"They are moving up the supply chain, not just to be the means by which this information is delivered but also the provider of this information," said Craig Schulman, a senior industry analyst from IBISWorld. Telstra consolidated its media assets into a single division in 2012 to increase focus on content delivery business.
With NBN Co taking control of the nation's fixed communications network, Telstra is focusing on mobile communications.
In this space it competes against Optus, owned by Singapore Telecommunications, and Vodafone Hutchison Australia.
The NRL deal will give Telstra the naming rights to the premiership and Sunday football as well as a host of other marketing rights.
In August the NRL signed a $1.025 billion, five-year deal with Channel Nine and Fox Sports.
Frequently Asked Questions about this Article…
Telstra sealed a five-year mobile broadcasting and sponsorship deal with the National Rugby League that was reported to be worth about $100 million. Telstra declined to comment on the exact monetary value, but the Australian Rugby League Commission chairman indicated the new deal would be worth more than $100 million and about double the value of the previous arrangement.
Under the five-year deal Telstra has the right to stream eight NRL games a week and key events—such as State of Origin, the finals series and Test matches—over the internet to tablets and mobile devices. The agreement also gives Telstra naming rights to the premiership and Sunday football plus a range of other marketing rights.
Fox Sports (News Ltd-owned) still retains rights to broadcast five games a week to tablets and internet-enabled television under an earlier agreement with the league. Separately, the NRL signed a $1.025 billion five-year deal with Channel Nine and Fox Sports in August, so Telstra’s rights focus on mobile streaming and sponsorship rather than replacing those broadcast contracts.
Yes. Telstra will make NRL content available to fans on any mobile network, but the company plans to charge non-Telstra customers an extra fee for access through its streaming service.
The deal underscores Telstra’s shift toward expanding media assets and content delivery as it transitions away from its old copper fixed network. Telstra consolidated media assets into a single division in 2012 and, with NBN Co taking control of fixed infrastructure, the company is focusing on mobile communications and media-centric services—an important strategic pivot investors may want to monitor.
Last year Telstra reached a $153 million agreement with the Australian Football League to stream matches live from 2012 to 2016. The NRL deal is reported at about $100 million but league officials suggested it would exceed $100 million and be roughly double the value of the previous NRL contract, signaling growth in Telstra’s sports content investments.
The article names Optus (owned by Singapore Telecommunications) and Vodafone Hutchison Australia as Telstra’s primary competitors in the mobile communications and content delivery space.
The deal highlights Telstra’s move to generate revenue from media and content delivery in addition to traditional telecom services. Industry analysts quoted in the article note that companies like Telstra are moving up the supply chain to provide content as well as delivery, which could diversify revenue streams—an item investors may consider when assessing Telstra’s long-term strategy.
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