'Some big risks': Truth about Channel Nine's threat to dump NRL

The NRL shutdown has seen Channel Nine reevaluate its partnership with the game. Pic: Getty

Nine Entertainment should careful what they wish for after boss Hugh Marks threatened to walk away from rugby league this week, according to a former NRL and AFL media rights adviser.

In the midst of sensitive broadcast negotiations with the NRL and Foxtel, Marks told analysts and investors at the Macquarie Australia Conference 2020 on Tuesday that the free-to-air broadcaster could relinquish the rights to rugby league.

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Colin Smith, who is boss of Global Media and Sports and has previously advised both the NRL and AFL, said it was risky for Nine to play out broadcast negotiations publicly.

"There's an old saying, 'be careful what you wish for' and I would think any other broadcaster would love to have State of Origin or finals even if it was just for this year," Smith told AAP.

"There's some big risks for Channel Nine in what they're doing."

While Foxtel relies on live sport to sustain the subscription television model, Smith says free-to-air broadcasters also need rights to a major sport to maintain their businesses.

According to Smith, a free-to-air sports broadcaster without either the NRL or AFL risks going backwards enormously and he cited financial hardship Channel 10 faced once it lost AFL rights.

ARLC chairman Peter V'landys is negotiating with both Nine and Foxtel over a cost reduction for the 2020 NRL season and a reassessment of the value of the game.

And while Smith agrees there is a reduction in the value of sport in the pre-COVID-19 marketplace, giving up rights to a major live sport on a free-to-air network is even more costly.

He said making the broadcast negotiations public could damage the relationship for the future deals.

"It changes the relationship (between the NRL and Nine) and my personal view is when push comes to shove I'd be amazed that Channel Nine doesn't broadcast this year, I think the risk is too great for them to do that," he said.

"I'm not quite sure it's in the interests of anybody to do all of your discussions out there in the public."

‘Not a given’ that NRL is part of Nine’s future

Foxtel is reportedly preparing to forge a partnership with a rival free-to-air broadcaster to satisfy anti-siphoning laws, and could include simulcast rights for State of Origin and the NRL grand final.

It was only last week that Nine and Foxtel signed off on the NRL recommencing its restructured season later this month, but new financials were not clear.

Nine newspapers went on to report that its network is looking to deduct $28 million from the $118 million it agreed to pay the league for this season.

Marks predicted that broadcasting the game this year would run at a loss.

"It's a sad statement that if the NRL proceeds that it will be a net negative to our results," he said.

Marks went on to claim that the COVID-19 pandemic has prompted a re-evaluation of owning sports rights across the broadcasting industry.

"It's not a given that NRL has to be part of our future," Marks said.

"It has to just pay its way like all of our content does, and if it doesn't, well ... again, we are less reliant on that as a revenue source."