The ITM Cup, despite its obvious challenges in bringing fans to the stadium, remains a jewel in the broadcast crown and is thought to have fetched a record price now the rights have been conditionally renewed.
Sky have signed a conditional agreement to continue owning the broadcast rights for Super Rugby, All Blacks and ITM Cup from 2016 and the latter is understood to have been a critical component in getting that deal over the line.
While the competition might appear to be fading in terms of its ability to command the nation's attention and interest, its importance to domestic and international broadcasters is possibly greater than ever.
Subscription TV is not the easiest business to understand but, in the broadest terms, Sky, having built in excess of 850,000 customers in New Zealand, are conscious of becoming a victim of what the industry calls 'churn'.
They don't want to see customers buy packages for just Super Rugby or just the All Blacks and then opt out. What the ITM Cup does is give them depth of content offering to ensure there's continuous rugby available from mid-February to late November. As a broadcast proposition, the ITM Cup is expensive to cover but worth every cent as it provides Sky with a means to retain their audience for the year.
How much that is worth to Sky will shortly become apparent. They have agreed to buy the rights, but the final price has not yet been announced.
What Sky have bought are the coverage rights for Super Rugby and Rugby Championship. Included in that five-year package are the rights to screen the All Blacks' June tests and ITM Cup.
While the latter two are lumped in with the Sanzar competitions, Sky will have to put a price on the June tests and ITM Cup. The way the deal works is that the Sanzar partners split -- as per secretly-agreed ratios -- the income they collectively receive for Super Rugby and the Rugby Championship.
But the money attributed to the June tests and ITM Cup will be New Zealand's alone. In practice, that means if Sky offer $100m for the total package and then value the June tests and ITM Cup at $30m, which the New Zealand Rugby Union keep, then $70m will be split between the Sanzar partners.
Sky, as the existing rights holder, had first refusal to buy the next contract and, to avoid it going out to open tender, are believed to have put an extraordinarily good offer on the table.
That presents the NZRU with a dichotomy. They need the revenue but, in taking it, will have to continue scheduling ITM Cup games mid-week and at night to suit the broadcaster.
While some of this year's games have been entertaining, most provinces are suffering from low turnouts and lack of local interest.
The stadium experience is clearly not one many are finding hard to resist. Provinces have worked hard to cut their cost base in recent seasons but their revenue is being just as severely challenged and, with dwindling crowds, gate revenue and sponsorship, are going to continue to drop as well.
The format isn't likely to change under the new deal, which means the onus is going to be on the NZRU and unions to find new ways of engaging fans and getting them into grounds.
- By Gregor Paul of the Herald on Sunday
