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NZ Rugby takes Sky stake as Sanzaar rights deal finalised

Sevu Reece of New Zealand runs with the ball to score his side's seventh try during the Rugby World Cup 2019 Group B game against Namibia (by Hannah Peters/Getty Images)

Pay-television broadcaster Sky New Zealand has extended its rights deal with New Zealand Rugby, with the “revolutionary” new contract involving the sport’s national governing body becoming an investor in Sky.

The five-year deal announced today (Monday) extends Sky’s existing broadcast rights to competitions organised by Sanzaar, rugby union’s regional governing body comprising the unions of South Africa, New Zealand, Australia and Argentina, to 2025.

The contract running from 2021 to 2025 includes exclusive coverage of all Rugby Championship national team matches, the Steinlager Series featuring the All Blacks, the Super Rugby and Mitre 10 Cup club tournaments and all New Zealand’s other domestic competitions, including women’s competitions like the Farah Palmer Cup.

Sky currently holds the rights in a contract spanning from 2016 to 2020 and had been seeking a further five-year extension from 2021 onwards, stating last month that failing to secure the contract would represent a “significant threat to shareholder value”. Financial terms of the new deal were not disclosed, but it is reported to be worth as much as NZ$400m (€228.7m/$252m). Sky said in a statement to investors that the rights have “materially increased” from its current arrangements.

Sky said the five-per-cent equity stake to be taken by NZR recognises the “increased alignment and strengthened relationship” between the two parties, their mutual support for one another and shared commitment to develop and promote the game.

New Zealand Rugby chairman Brent Impey has denied the stake agreement presents any potential issues in terms of conflict of interest, telling the New Zealand Herald newspaper that the governing body would not prevent Sky from bidding for other rugby rights.

Sky has served as NZR’s rights-holding broadcaster for the past 25 years and Impey said the new agreement was reached at the end of an exclusive negotiating period between the pair that was due to close on Sunday night.

Sky is currently in the midst of a battle in the domestic market with telco Spark. The latter company is currently broadcasting the Rugby World Cup and its streaming service has come in for criticism. Impey stated the “so-called technical glitches” of Spark had nothing to do with NZR awarding the rights to Sky, but admitted that reaching rural New Zealand was a “critical part” of the discussions.

Today’s announcement marks the latest in a flurry of high profile sports rights deals in New Zealand. Spark recently landed another blow in its ongoing battle with Sky by replacing the broadcaster as New Zealand Cricket’s domestic rights-holder in its latest tie-up with public broadcaster TVNZ.

Later in the week, Sky extended an exclusive agreement with the International Cricket Council to continue delivering coverage of its events for the next four years. The NZC agreement, which took the rights away from Sky, led to the broadcaster’s share price plummeting to an all-time low.

Today’s news has led to the price on the NZX rise by 19.1 per cent to reach NZ$1.06 by 9.20am GMT.

Commenting on the deal, Sky chief executive Martin Stewart said: “Our commitment is to deliver rugby to all New Zealanders in ways that work for them, including streaming, broadcast over our satellite and free-to-air on Prime.”

NZR chief executive Steve Tew added: “This is a great result for NZR – we not only have a vastly experienced broadcast partner, but we have a partner prepared to work and invest with us in initiatives that will help grow the game over a prolonged period of time. For rugby in New Zealand, this is a hugely significant agreement that secures the long-term financial health of our game.”

Sky holds its AGM on Thursday, where it will seek formal approval from shareholders to complete the NZR deal.