Overseas TV deals allow Tennis Australia to focus on audience, not dollars, at home
By Simon Ward
The organisers of the Australian Open insist that viewership rather than money will be the priority as they look to secure a new domestic broadcasting rights deal for the grand slam tournament because the event makes a much larger proportion of its income from international markets.
Commercial free-to-air broadcaster Seven Network’s deal to show the Melbourne showpiece expires after next year’s tournament, and the company and Tennis Australia are presently engaged in an exclusive negotiating period discussing a renewal.
Richard Heaselgrave, the federation’s chief revenue officer, says it is keeping an open mind on how the event will be shown in Australia in the future, but, in light of the lucrative deals in place in other parts of the world, does not feel the need to sacrifice audiences for cash.
The current deal with long-time partner Seven, which was signed in 2013, is worth A$40 million ($31.3 million) per annum over five years.
In an interview with Sportcal, Heaselgrave (pictured) said: “We’re in an exclusive period with Seven until mid-March, and we’ll talk to others if we don’t have a deal by then. The pure dollar for our domestic market is not going to make a material difference to our business.
“We want as many people as possible to watch the Australian Open. That’s more important than if we’re putting A$10 million on top. We’re very different from other grand slams in that we get three times as much from our overseas media rights as domestic.”
Heaselgrave acknowledged that the demand will be impacted by the simultaneous negotiations taking place between Cricket Australia and broadcasters over rights in that sport's next cycle starting in 2018-19.
Live coverage of Australian cricket is presently shared by free-to-air broadcasters Nine Network, which shows Australia home matches, and Ten Network, the home of the Big Bash League, the popular Twenty20 competition, but there has been talk that some coverage could pass to the merging Foxtel-Fox Sports pay-television operation.
He said: “It’s an interesting time, with the two main summer sports. But all the main broadcasters are going to be talking to us. If we can grow our audience over the next few years, that will be our priority rather than a small spike in a small part of our business.”
Tennis Australia did come in for criticism and was subject to an investigation by the Australian Securities and Investment Commission over its decision to sell the Australian Open rights to Seven five years ago without a competitive bidding process, with some claims, denied by the governing body, that it could have raised an extra A$50 million by going to the open market.
Asked whether it felt under pressure to adopt a different approach this time, Heaselgrave claimed this was inevitable anyway, saying: “Our process with Seven has been very open. The media landscape has changed very much in the last five years, and it’s going to change in the next five years. We need to make sure we remain a major part of the Australian summer.”
Despite clashes with Australia-England cricket matches and the BBL, along with the early exits of some leading male players, Seven again enjoyed strong television viewing figures for the Australian Open, with a cumulative broadcast audience of 10 million for the first 10 days, up 6 per cent on 2017.
The network pulled in an average audience of 2.3 million for Roger Federer’s five-set defeat of Marin Cilic in the men’s singles final, which earned the Swiss player a historic 20th grand slam title.
However, some of Seven’s most impressive figures were for the digital coverage, with 71.5 million minutes viewed in the first 10 days, nearly double the figure of the previous year.
This will have prompted Tennis Australia to review the way rights are sold going forward, with multiple partners and the carving-out of digital rights among the options.
Heaselgrave said: “Channel Seven is a kitchen sink deal [includes everything]. But that is highly unlikely for the deals in the future.”
He added: “It could be that a free-to-air broadcast partner has a series of games that they want to put on a new channel.
“We don’t rule out anything. We are very interested to see how the next few years pan out. There has been a decline of free-to-air audiences, but the Australian Open has held its share.”
International market Given the importance of international broadcast rights, Tennis Australia will be pleased to have concluded multi-year renewals with SuperSport in sub-Saharan Africa, Fox Sports Asia in Southeast Asia and BeIN Sports in the Middle East and North Africa in recent months.
The latter deal, which runs to 2024, was announced after this year’s Australian Open and particularly welcomed by Heaselgrave who said: “BeIN was really crucial as they’re a long-term partner and it’s important to stay close to them as such a dynamic partner.”
The organisers would also have been encouraged by the high audiences for Fox Sports Asia, with the broadcaster attracting 14 million viewers for its coverage, a 20-per-cent increase on 2017, helped by Chung Hyeon’s achievement in becoming the first Korean grand slam semi-finalist.
In addition, there is now widespread coverage in China via the likes of CCTV, Beijing TV and Guangdong TV, which is of increased significance given that is now a commercial target market, with new sponsors including water brand Ganten.
The success of its international rights strategy is demonstrated by the fact that Tennis Australia’s media rights revenues have risen from A$54 million in 2014 to over A$120 million this year.
The federation has used agencies in the past, but now conducts sales in-house, with dedicated offices in Belgium, Hong Kong and Shanghai, and its mandate includes the Laver Cup, the new international men's team competition between Europe and the rest of the world.
Heaselgrave does not rule out using agencies in particular markets, if necessary, but claims this has not proved necessary of late, saying: “I think it’s fair to say that we’re a different company from what we were before. We didn’t do host broadcast, we didn’t do media distribution ourselves.”
There has been similar growth in sponsorship, from A$35 million to more than A$100 million, and this is set to rise further with Kia, the main sponsor of the Australian Open, having now renewed for a further five years, in a deal reported to be worth A$17 million per annum, and Rolex committed for a further 10 years.
Meanwhile, income from ticketing and hospitality has climbed from A$68 million to more than A$100 million in the space of five years, with record attendance of 743,667 at Melbourne Park this year.
Tennis Australia revenues, which include the Australian Open, but also warm-up events in Adelaide, Brisbane, Hobart, Perth and Sydney, are set to exceed A$350 million this year compared to A$170 million in 2014.
Heaselgrave said: “We’re targeting growth year on year. There’s no doubt we’re in a period of growth we don’t see slowing soon. We can see our attendance growing and our partners growing.”
The next priority for the governing body is to develop its digital products as it seeks to appeal to a non-sports audience both domestically and overseas, a commitment already demonstrated by the supporting music, entertainment and culinary events it already holds around the Australian Open, on a site twice the size of that of Wimbledon.
Heaselgrave cited the online stir caused by the interview of Federer by US comedy actor Will Ferrell as an example of the crossover potenial, adding: "I say that very earnestly we want to be the biggest sports entertainment product, not just a tennis tournament. A lot of sports are moving in that direction, but I don’t think all the federations have grasped the nettle.”
He added: “When we look at our media content, we’ve only been distributing the tennis product, but from next year we’ll be distributing specific programming, with music, kids, food.
“With the digital platforms that we run and our ability as host broadcaster, we only needed to look outside the box. Every sport needs to be properly treating the entertainment side of the business, and we think that is the future of global sports events.”