A quarterly installment believed to be around $900,000 is due to each of the 11 clubs next month but with the league locked down by the coronavirus, rights holders Fox Sports aren’t expected to sign any cheques for non-existent content.
Colin Smith, head of the consultancy Global Media & Sports, fears the beginning of the end of Fox Sports’ $57.6 million annual commitment to football may be imminent, with the sport unable to deliver on its contractual obligations and now technically in breach after Tuesday’s suspension by FFA.
“In normal circumstances Fox Sports would not want to shoot down football when the A-League is facing its toughest scenario,” said Smith.
“But the reality is that this is as tough for Fox Sports as well since they’re about to lose most of their Kayo subscribers because there’s literally no content, both locally and internationally.
“They’ll be looking to make savings and won’t be paying rights fees to any sport (NRL and AFL included) while there’s no content.
“In terms of the A-League, I would suggest firstly they won’t get any new payments and secondly, I understand, Fox Sports have the right to withdraw altogether (from the final three years of the six-year $346 million deal).
“They might not embark on that course right now – but I think they’ll be keeping their options open to say ‘thank you, we won’t continue to broadcast … feel free to go with anybody you want to’.
“I would imagine they have Force Majeure clauses and everybody will be going back to read the fine print.”
Fox Sports’ relationship with the A-League has been souring for some time amid nose-diving ratings, even though the numbers are skewed with fans now following the game across multiple platforms.
Regardless, Fox Sports have trimmed the resources they direct at the competition and club bosses have reportedly become increasingly resigned to the prospect of life without them at the expiration of the deal in 2022.
The extraordinary lengths they went to to remain active during the coronavirus outbreak was allegedly aimed at providing Fox Sports with no excuse to tear up the existing deal.
The coronavirus may, though, have brought matters to a head.
Smith warned that whether Fox Sports stay or go, the A-League must prepare itself for drastically reduced remuneration from future TV deals.
“It’s clear Fox Sports is in cost-cutting mode – and if they were to walk away from football, in the current circumstances you would fully understand it,” he added.
“I think the A-League will need to plan not only for a life without Fox Sports but for a significantly lower rights fee, whomever they deal with (in the future).
“In that scenario, the sustainability of the clubs will depend more then ever on the wealth of their owners, who may be suffering big financial losses themselves (in their own businesses).”
The A-League might find a future home on Optus Sport, speculates Smith, with the telco already securing the English Premier League, UEFA Champions League and J.League.
“The A-League, I think, would be on their radar,” he said. “But they wouldn’t make the numbers work (on the same magnitude of the current A-League deal).
“You have to remember that Optus will also be hurting. The money being taken out of the economic system might lead to people cancelling subscriptions, and that will hit Optus’ bottom line.
“There are already one million people out of work in Australia since the coronavirus hit and that figure could double by the end of next week.”
Anticipating the carnage, Optus has already flagged plans to refund or suspend accounts free of charge for all customers who pay for its sports streaming service.
“Across the board, I feel this is a tipping point and the nexus between player salaries and rights fees will have to break,” added Smith.
“Rights fees will plateau – if not reduce significantly. You can see in the next 12 to 18 months there are going to be some massive re-negotiations to recover the position of both the broadcaster and the sports themselves.
“I can’t envisage anywhere now where rights fees will go up.
“But there’s still a hunger for sport and viewers will come back once sport is up and running again.
“But leagues will be challenged and there will be clubs – across all codes – that will no longer be viable.”