Sky Network Television, New Zealand's dominant pay-TV company, has signed a conditional contract to renew its five-year deal with the New Zealand Rugby Union and the SANZAR unions for an undisclosed amount. The shares rose to a two-week high.
Auckland-based Sky is set to renew the rugby rights from 2016, it said in a statement. It didn't disclose any terms or conditions of the agreement. The current rugby union contract which expires in 2015 awards exclusive broadcast rights across technology platforms, including internet viewing.
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Like other pay-TV companies around the world, Sky has gained a foothold in the New Zealand market by chasing the rights to the country's most popular sport and currently counts almost half of New Zealand households as customers. The company is facing increasing rivalry from local internet-based services such as sports-focused Coliseum and entertainment-focused offerings from Spark New Zealand, formerly Telecom, as well as overseas services from the likes of Netflix, Quickflix and Ezyflix.
Shares in Sky rose 2.4 percent to $6.07.
Sky's previous investment in broadcast equipment means it is the only entity able to offer comprehensive coverage of New Zealand rugby, including everything from international tests to school sports, according to people familiar with the industry.
"This will provide a platform to showcase our game at all levels and further secures the future of rugby in this country," New Zealand Rugby Union chief executive Steve Tew said in a statement. The NZRU will comment further once SANZAR has concluded rights agreements across all territories, he said.
The rugby union gets almost three quarters of its income from commercial contracts, including broadcast and sponsorship deals.