Super Rugby games are attracting fewer viewers than they did last decade. Photo / Getty Images
COMMENT:
Australian rugby is weaker than it has been for decades.
But it's not only on the paddock that rugby is in trouble – it is also struggling as an enterprise.
The domestic broadcasting rights for Australian rugby for the next five years after this season are up for grabs and it looks as if Rugby Australia won't be able to drive much of a deal at all.
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• Foxtel set to lose Australian Rugby rights to Optus
Negotiations with the current host broadcaster Fox Sports, which has broadcast rugby in Australia for the past quarter century, have broken down.
When Fox Sports offered RA only A$20 million ($20.8m) a year (A$37m a year less than the current deal), RA CEO Raelene Castle decided to take the broadcast rights to the open market, according to a report in the Guardian Australia.
The paltry offer from Fox is also a reflection of the broadcaster's own woes.
On Friday we learned that Kayo - Fox's streaming platform on which it was pinning all its growth hopes - lost 32,000 subscribers over the past three months. Foxtel itself is also shedding subscribers and revenue fell by over 10 per cent or US$61m ($95.2m) in the three months.
But it's not all Foxtel.
Australian Rugby has slid a long way since Australia's two World Cup titles last millennium.
Super Rugby and Rugby Championship games which drew ratings of 180,000 in 2004, now attract only 33,000.
Rugby Australia is in talks with telco Optus about the broadcast rights, with Optus' interest presumably driven by a desire to draw more customers to the company with a packaged telco and rugby offering.
But the sporting body isn't negotiating from a position of strength. What incentive would Optus have to offer much more than the A$20m a year than Fox did?
New Zealand and South Africa have already completed negotiations with domestic broadcasters for 2021 to 2026 and are now closely watching events unfold in Australia.
They know that the less Rugby Australia earns, the less it will be able to pay its best players, who instead will take lucrative offers from Europe and Japan.
The New Zealand Rugby Union may as well bolt the Bledisloe Cup in place.
It's unclear how much coronavirus will hurt Australian businesses or the economy.
But one immediate casualty is James Packer's deal to sell 10 per cent of his Crown Resorts casino and hotel company for A$880m.
Late on Thursday night Hong Kong gambling giant Melco Resorts said it was scrapping its deal to purchase the stake in Crown so it could direct all its resources to its casinos in Macau, which the local government has shut down for at least a month.
Packer followed by announcing he had agreed to terminate the sale to Melco, which is run by his friend and former business partner Lawrence Ho.
The reclusive billionaire, who for several has shunned his hometown of Sydney and now lives variously between Aspen, Los Angeles and Argentina, has already trousered A$900m from the earlier sale of a 10 per cent stake in the company to Ho. The A$880m was to have been the second tranche of the deal, to take Ho's stake to 19.9 per cent - just short of the 20 per cent holding that would require him to launch a full takeover bid for Crown.
While near billion dollar hit looks like bad news for Packer, in reality it is only a temporary setback and may ultimately turn out to be to Packer's benefit.
In all likelihood, Packer won't be too concerned by the termination of the deal, which leaves him holding 36 per cent of the casino company. Melco was very clear in its statement that it does not "currently" intend to increase its shareholding.
It's clear that the Chinese casino operator will be back and that Packer will realise his ambition to step back even further from the limelight.
(Its departure might also help it avoid – at least for the time being – a messy inquiry into its probity by the NSW government.)
Even if Melco doesn't come back, there are other buyers waiting in the wings.
In April we learned that Packer had been in talks to sell what was at the time his 47 per cent stake in Crown Resorts to US casino giant Wynn Resorts, which would have netted him A$4.7 billion. Wynn retreated after news of the discussions leaked to the media, but Crown remains at attractive asset, so there is no reason why Wynn wouldn't come back.
Packer's deal with Melco was set at A$13 per share, compared the A$14.75 a share that is believed to have been the focus on the discussions with Wynn.
Crown shares were languishing at around A$11.61 on Friday as they were hit by concerns about coronavirus, so there is a lot of potential upside.
As for what could spark that gain, look no further than Crown's A$2b casino development at waterfront Barangaroo in Sydney, which will open in December.
If it performs well, Crown will by the end of the year have three high-quality casinos in the attractive and stable market in Australia.
It's the sort of asset any significant casino group bent on expansion would want to get its hands on.