Who's making money from live sport?

The Seattle Seahawks may have comfortably won the on field proceedings of this year’s NFL Super Bowl, but broadcaster Fox was the real winner off the field.

Fox had the rights to the big match, and generated a national TV audience of over 111 million viewers, up 3 million from the previous year when CBS had the rights.

The result is especially impressive when you consider the way the game panned out. Seattle had the edge over Denver from the very first play, and the game looked over just seconds into the second half when Seattle’s Percy Harvin ran the opening kick-off all the way for a touchdown.

It is also worth noting that the half-time show, headlined by Bruno Mars, lacked the sort of blockbuster headliner such as Beyonce, Bruce Springsteen or Prince that the NFL has managed to procure in recent years.

The ratings performance shows that there is no bigger ticket in the United States than the NFL. Baseball, basketball and hockey may command loyal and passionate local followings, but they cannot match the national presence that every game of NFL appears to command.

During the divisional championship on Sunday I was lucky enough to be in New York. Despite both games having no representative from the Tri-State area (New England faced off against Denver in the day game, San Francisco and Seattle faced on in the evening match), the city streets were eerily quiet. However, bars and restaurants showing both games were packed to the gills with fans closely watching both games. In a pokey midtown Irish bar I caught the second half of the 49’ers-Seahawks game, and when Kapernick’s pass was intercepted in the dying seconds I saw a grown man break down a cry right next to me, with another unleashing a vicious tirade at the nine 60-inch plasma screens in the bar all broadcasting the game. You don’t see that sort of reaction from a re-run of Modern Family.

Live sport manages to defy the odds and increase both ratings and revenue. The NFL generates approximately $US7 billion ($7.9 billion) a year in TV rights across its three free-to-air broadcasters – Fox, CBS and NBC – as well as cable broadcasters ESPN, DirecTV and the NFL network. During the football season period of September-January, NFL games account for over 90 per cent of the top-rating national programming. The consumer appetite for NFL is so strong that its free-to-air broadcasters have all used it as a way of renegotiating higher retransmission fees with cable providers, using the threat of blackouts during the regular season to compel the providers to act or face customer outrage.

Australia, like the United States, has a strong appetite for live local sport. However, aside from the international cricket, Australia lacks a legitimate national code. Day two of the fifth Ashes Test in Sydney generated an average metro audience of 1.558 million for Nine, winning the day in all major markets, while 2013’s AFL Friday Night preliminary final was only live broadcast into two metro markets (Melbourne and Adelaide) and generated 840,000 viewers. On the same night, Semi Final 1 of the NRL generated 854,000 metro viewers and also was only broadcast into two markets (Sydney and Brisbane).

The AFL grand final generated a metro audience of 2.7 million and was broadcast into all five major metro markets. The following weekend the NRL grand final generated 2.17 million combined for the five major markets.

The difference between a code like the NFL and our local leagues such as the AFL and NRL is that all NFL games can be broadcast nationally and generate strong ratings in the US.

Despite this you can be sure when the AFL looks to negotiate its broadcast rights from 2017 and beyond it will be well aware of its strong position when speaking with local broadcasters. As long as the balance sheets of channels Ten, Seven and Nine remain respectable, the AFL should easily eclipse the $1.25 billion they received during the last rights negotiation by 20 per cent to 25 per cent. Let’s not forget, the AFL provides the host broadcaster with 15-20 hours per week of live sport and analysis for 27 weeks during the regular season and finals.

You wonder whether the AFL – or indeed the free-to-air broadcasters – would consider a joint deal similar to how CBS, NBC and Fox partner with the NFL, which could give each broadcaster two to three games each. A deal like this would ensure all AFL games were available to all households and would provide all three broadcasters with an element of the ‘event TV’ they all covet. Of course, this would require all three rivals to work together – something that hasn’t historically been achieved. It would also require Foxtel to sit on its hands and let it happen, which is doubtful considering how important the AFL is to Foxtel maintaining its subscriber base.

Whatever happens, the importance of live sport to Australia’s TV broadcasters – their financial performance and their share price – is undeniable. For the leagues that control these codes, the future is incredibly bright.