Sky NZ ponders recouping rights costs, but sensitive to domestic sport
Sky New Zealand, the pay-television broadcaster, has suggested it has options to recoup some rights costs after withdrawing its profit guidance for the year as a result of the coronavirus.
Many of the sporting competitions Sky Sports has the rights to have been postponed or cancelled amid the pandemic, and the company said it recognised the potential for further disruption.
In a statement to NZX, the New Zealand exchange, Sky said that while the company “has options to recover some costs associated with sports content rights,” it is “aware of the crucial role it plays in the sport ecosystem in New Zealand."
It added: “Decisions made now have the likelihood of impacting on the health and sustainability of New Zealand sport for some years to come.”
The broadcaster said that to reduce costs it would cut its operating expenses, deferring non-essential investments and implementing a travel and hiring freeze.
Sky holds rights to multiple domestic and international sports properties, including via a deal with New Zealand Rugby. Last October, it extended its rights deal with NZ Rugby, with the rugby union body becoming an investor in the broadcaster in the process.
Last year, the company agreed a deal with Sanzaar, reported to be worth around NZ$500 million ($283 million), to retain rights to competitions including The Rugby Championship and Super Rugby until 2025.
Sky said it was working with content providers to develop the “best possible package to deliver to customers” and had access to “an extensive library of marquee sporting events covering a range of codes and tens of thousands of hours of premium content, documentaries and original production”.
Earlier this week, Spark Sport, the New Zealand sports streaming service, announced it would open its platform for free for existing and new customers until May, after the suspension of its top three properties, English soccer's Premier League, Formula 1 and basketball's NBA.
Content that will be available includes old Premier League matches, documentaries and other repeats.
However, responding to that move, Chris Major, a spokesperson for Sky, told the Stuff.co.nz website that Spark was in a different position as not paying the Premier League or other overseas rights-holders for a month would not be harmful to sport in New Zealand.
She said: “Our challenge is much harder. The payments we make to New Zealand sport … are an important financial lifeline for may Kiwi sports—like NZ Rugby, NZ Netball, the Vodafone Warriors and NZ Rugby league, NZ cricket, the Phoenix and Football NZ, the Sky Sport Breakers, NZ Golf and the NZ Open, Tennis NZ and the ASB Classic, the NZOC, to name a few."