Advertisers refuse to fund sports rights inflation

The Financial Review reports that Australias leading advertising agencies are baulking at having to pay more to cover the cost of the ever increasing hikes in tv rights across the major sports codes.

“The AFL, NRL and Cricket Australia are getting to the point that if they don’t moderate their aggression for increased valuation on their rights they are going to implode,” said IPG Mediabrands global CEO, Henry Tajer, who also serves as chairman of IPG Mediabrands’ Australian unit.

He added: “There is a serious misalignment in the comparative costs of sports in other markets around the world and Australia. Australia is way overpriced given its population of just over 22 million people.”

Comments were echoed by Simon Ryan

The sports rights are simply getting out of control and becoming increasingly difficult for media and advertisers to afford while supporting other business initiatives,” Mr Ryan said. “The free-to-air networks are under cost pressures as it is and to add to it, the increasing costs of broadcasting rights to lift overall ratings is getting beyond what they can afford. There is a rebalance due.”