News Corporation’s NWSA Australian division has sealed a five-year broadcast deal with the National Rugby League (NRL) for the seasons 2018-2022. The value of the deal, which stands at 1.8 billion Australian dollars (or US $1.3 billion), is one of the largest sports contracts signed in Australia.
Fox Sports, a subsidiary of New Corp. Australia, will also broadcast every match live and ad-free in 2016 and will also launch an NRL channel in 2017.
Per the company’s SEC filing, the deal also includes media company Nine Entertainment as well as Australian telecommunications firm Telstra. Telstra extended its 17-year partnership with NRL by retaining the naming rights to the NRL premiership. Telstra also provides fans with the option to watch the matches live on its mobile network. On the other hand, from 2016, Nine Entertainment will telecast live free-to-air matches on Thursday and Friday nights and Sunday afternoons.
Peter Tonagh, News Corp. Australia Chief Executive said: "This is a truly outstanding deal that will, for the first time in the history of the game, give fans live coverage of every game each round. It's a big win for the fans, and a big win for the clubs, and News is delighted to be a part of it.”
We believe this deal will drive the company’s revenue higher in the coming years. However, higher sports programming rights costs may lower the profitability if the company fails to raise subscriber and carriage fees and advertising rates to offset the same.
Zacks Rank
News Corporation currently has a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in this sector include MSG Networks Inc. MSGN, RR Media Ltd. RRM and Twenty-First Century Fox, Inc. FOX. All three stocks hold a Zacks Rank #2 (Buy).
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