Australian Cord Cutting Puts Long Term A-League Future At Risk

Australian Cord Cutting Puts Long Term A-League Future At Risk
Like so many other leagues around the world, Australia’s premier domestic competition has had to undertake an enforced period of hibernation and with its 2020 edition reaching the business end of the season, plans regarding a conclusion are still in the discussion phase.

While although any hiatus in activity, will no doubt put a financial strain on each of the A-League’s 11 member clubs, there is a wider external threat that looms large and one that could threaten the very existence of the top level football within the country.

With so many people around the world being impacted by coronavirus, budgets within the home have undoubtedly constricted and with that being the case, a curtailing of outgoings becomes a necessity.

One outgoing for so many is cable television and with Australian consumers opting to cancel their subscription (a term otherwise known as cord-cutting) due to a lack of competitive action, platforms such as Fox Sport are seriously feeling the pinch.

The relationship between Foxtel (Fox’s parent company) and Football Federation Australia (the A-League’s governing body) is already one that can be considered frosty and with the threat of legal action being taken out by the latter, it was only avoided by a delayed rights payment of $12m AUD.

With Foxtel losing its customer base at an almost alarming rate and already trying to service a debt of $2 Billion AUD, they are now undertaking the unenviable task of balancing the books and it is their once healthy sport portfolio, which seems to be in the closest line of fire.

When the A-League and Foxtel partnered up three years ago, it was a deal that was heralded as one that would see the competition, if not go from strength to strength, then at least create a sturdy platform to build upon.

With the two parties embarking on a six-year deal worth $48m AUD a year, the future did look bright for the likes of Sydney FC and Melbourne Victory. However, with both domestic and international broadcasters now looking to cut their cloth accordingly, the picture does not look as rosy.

After looking at the current value of the A-League, Foxtel now want to scale down their payments to just $28m AUD a year, for the remaining three years which are still left on the deal and the prospect of 41.6% annual decrease, has not been well received by those within the FFA board room.

With coronavirus putting a shuddering halt on most global leagues, Australia’s offering can hardly bargain from a position of strength and it is that weakness, which has sent shockwaves through a burgeoning football community.

With the FFA already having to lay off 70% of its workforce in this current crisis, they possess very few bargaining chips and with no other forthcoming networks in a rush to screen the league either, Foxtel might just be looking to play their killer pass at a crucial time.

Quite simply if any of Australia’s major sporting disciplines cannot fill their venues once action restarts, there will be little in the way of return on investment, as far as rights fees go and when you consider football is the least attended of the ball based codes, a tv blackout could be on the cards.

That is if they don’t agree to a scaling back of the six-year deal that was previously signed and now the FFA find themselves in something of a bind, because as much as the game in Australia needs exposure, it also needs it at a fair price.

A fair price that Foxtel will be doing their absolute best to now lower and with the long-term future of the A-League within their hands, the football revolution in Australia might not be televised after all.

 

Written by Dan Tracey

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