Speaking with Radio Sport this morning, Key said there was no reason a state broadcaster couldn't air big matches, but the question was where the money would come from.
"Anything's doable but the issue's always been, if you go out there and say it's free-to-air then the question is, does the state broadcaster pay the same amount of money as Sky TV," he said.
Key said it was important that expensive events, such as the Olympics, were able to make money off television rights to cover costs.
"It's always about replacement funding," he said.
"Look at the number of All Blacks that are thinking about going to Europe and thinking about going to France quite a lot earlier than they otherwise would."
"Some of our most famous stars might end up cutting their All Black careers short, and if we have less money in the pot, how does that help?"
Sky TV and other companies were simply willing to pay more than a state broadcaster, he said.