THE cumulative sighs of relief from Channel Nine employees last week after the network was saved from receivership would have knocked Jonathan Brown off his feet. Almost as relieved were the executives of those sports dependent on Nine's rights-holding cash.
The obvious benefactors are Nine's flagship products, cricket and rugby league, both of which had hundreds of millions of reasons to be grateful that - for now - the cheques will be in the mail. However, it is not as though sports administrators were oblivious to Nine's problems, or the changing landscape of the electronic media.
The NRL had asked for the first $90 million of its new media rights deal upfront. That was meant to ensure the NRL had time to tip-toe its way through the legal minefield and perhaps find an alternative broadcaster if Nine - or what remained of it - could not fulfil its obligations. Which would have been a prescient move, had Nine not tangoed with the insolvency experts before that cash had been paid and the rights deal activated.
Still, as it turns out, Nine is - if you will excuse the excruciating pun - still the one. But it was a worrying week in which Cricket Australia launched its season with a lavish lunch, while its broadcast partner scurried from one meeting to the next trying to save its skin. An ordeal that will have sharpened the reflexes of sports administrators, particularly those at CA whose seven-year deal with Nine expires in March.
Already, some are looking beyond their present agreements and considering a future that will almost certainly not include the type of bidding wars between established networks that have inflated the price of the various football codes, in particular, beyond their market worth.
As Channel Seven's rivals have been at pains to point out, even the high-rating AFL is a loss-leader for the network. Seven pays more than cost price on what has been, given a prosperous period, the reasonable assumption that the cross-promotional and brand value is worth the vast sums it pays for the rights and production costs. But that assumption depends on the type of savvy programming and promotion that has allowed Seven to capitalise on the prestige the AFL provides.
However, as the advertising dollar is split between various electronic platforms, the time is coming when the formula behind that strategy no longer adds up. The possible outcome for sports administrators is to accept less from the networks, maximise pay TV revenue (somewhat problematic despite relaxed anti-siphoning laws) or cut out the middle man and take their product directly to the consumer.
Typically, the AFL is leading the way in studying the possibility of producing and distributing its games, having carefully studied how sports overseas such as the US National Football League maximise revenue from in-house production. Already, AFL Films has been incorporated in AFL Media - the propaganda unit the AFL somewhat ludicrously claims to be an independent new service. It is now possible that the AFL will be selling fully packaged games to the networks in four years' time.
In the second case, the debate is whether a direct-sale model where you preach largely to the converted provides a sport the same exposure as broader network coverage. The counter-argument is that, as the media rapidly fragments, the old one-stop network days are gone. The sports that are nimble enough to spread themselves across various platforms will prosper.
An interesting small-scale model is the National Basketball League, which recently became the first Australian sport to sell live streams of all its games for computers, phones and tablets. For $79 a season, fans can watch every game on NBL.TV. No doubt, other sports will monitor the results.
As for Nine's experience, as we wrote recently, one of the factual errors in docudrama Howzat! Kerry Packer's War was that World Series Cricket did not, as the program suggested, put Nine at risk of bankruptcy. Media rights were a drop in the bucket then. Now they add significantly to the costs that could tip networks over the edge.