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Streaming service Stan will create a bespoke sports channel after beating Foxtel to the rugby union broadcast rights, with an expansion into other sporting events expected in the near future.
Nine Entertainment Co, which owns Stan, is expected to announce the creation of Stan Sport on Monday. Multiple industry sources, who spoke on the condition of anonymity because the plans are confidential, said the launch will come as Nine and Stan confirm a multi-year contract with Rugby Australia worth an estimated $30 million annually.
Rugby union will become part of a broader play for Stan.Credit:Getty
Nine's announcement will mark a pivotal moment for Stan as it attempts to compete with global streaming platforms such as Netflix and Amazon Prime by offering a wider range of content. It will also officially end a two-decade long relationship between News Corporation's Foxtel and Rugby Australia. Nine and Foxtel declined to comment.
Nine (owner of this masthead) is expected to air Wallabies Tests, the Rugby Championship and one game a week of Super Rugby on its television network under the new deal. All other Super Rugby games, the Shute Shield and Hospital Cup will sit behind a paywall on Stan.
Industry sources said Stan is already working on developing the technology required to broadcast live sport. It is also trying to secure a range of other broadcast deals to attract more subscribers and reduce its reliance on rugby. Stan currently charges between $10 and $19 for television shows and films, but it is unclear whether it will cost more for sports content.
Key rugby states have already been informed about Monday's announcement and the broadcaster has started speaking to prospective commentators.
Rugby sources said Drew Mitchell is part of Nine's plans but it is unclear whether any of the current Fox Sports commentators will join the recently retired Wallabies star. Former Wallabies Phil Kearns, Rod Kafer, George Gregan, Tim Horan and caller Greg Clark have become synonymous with rugby in Australia but Nine may opt to take a fresh talent path.
Former Fox Sports host Nick McCardle – who was one of several rugby staff cut by the network in recent years – would be a suitable host if the broadcaster do not wish to add to host James Bracey's current workload.
Industry sources said Foxtel was informed late last week it was the unsuccessful bidder and that RA would officially cut ties early next year. It is unclear how Foxtel will spend the money it will save from losing the broadcast rights, but it is will inevitably free up some much-needed cash for the pay TV company which has suffered revenue decline due to people cancelling subscriptions and social distancing restrictions caused by the coronavirus pandemic which caused pubs and clubs to close.
The unsuccessful bid may surprise some viewers as Foxtel has an extensive history with the code and has been affiliated with Super Rugby since its 1996. However the relationship between Foxtel and RA soured late last year when it offered a small sum to broadcast matches from 2021 onwards. The talks ended so badly that Foxtel initially walked away from a deal altogether. The company returned to the negotiating table in September and made several changes to its bid, which included an offer to air a game a week in front of sports streaming service Kayo’s paywall.
Major shareholder News Corporation said on Friday that Foxtel's Kayo had 644,000 paying subscribers. Foxtel had 3.29 million paying subscribers as of September 30, but social distancing restrictions put in place because of COVID-19 has meant that many pubs and clubs cancelled subscriptions. News Corp, which owns 65 per cent of Foxtel, reported a revenue fall of US$18 million to US$496 million for subscribers in the first quarter. Telstra owns 35 per cent.
Foxtel said in 2019 it would cut its spending on “non-marquee sporting content” as it tried to refinance its large debt pile. The pandemic allowed Foxtel to renegotiate rights fees in an attempt to rework its cost base. It renegotiated deals with the AFL, NRL and Football Federation Australia as well as axed a large number of jobs. Stan's foray into sport, if successful, would put pressure on Foxtel, which is heavily dependent on sport for subscribers. However, sources familiar with Stan's strategy said it does not intend to create a one-stop-shop service like Foxtel's Kayo.
News Corp chief executive Robert Thomson said on Friday that he did not see a need to inject the pay TV operator with more cash.
"In the context of the COVID restrictions on pubs and clubs and the impact on advertising, we're very pleased with the rapid growth of the streaming business at Foxtel," Mr Thomson said. "We foresee no need to bolster Foxtel with with extra investment, which shows that the business is on a particularly positive trajectory."
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