Nine to save $130m if NRL is cancelled
Channel 9 has told shareholders it will save $130 million this year with the potential cancellation of the NRL season.
It comes as The Daily Telegraph understands Channel 10 is positioning to take over the broadcast rights if Channel 9 pulls the plug.
Nine's bosses met with NRL chiefs last week to tell them it would not be making its quarterly payment due on Wednesday.
Broadcast partner Foxtel meanwhile is still in talks regarding its contract with the NRL in the hope that the season will be revived.
In a statement to the ASX, Nine Entertainment said any cancellation of the NRL season meant a saving of $130 million this calendar year.
That saving comprises a $100 million payment to the NRL and $30 million saved in production costs if the season is cancelled.
More generally Nine is also looking to save almost $70 million in operational costs, with most staff working from home during the coronavirus lockdown.
Nine CEO Hugh Marks said: "Notwithstanding an expected significant impact on our business as conditions continue to evolve, we are confident that with our enhanced audience position, our mix of assets and the commitment of the Nine team, we will emerge from this period and stronger and more competitive company."
Mr Marks and Nine's head of news and current affairs Darren Wick met NRL chief executive Todd Greenberg and chief commercial officer Andrew Abdo at Nine's Willoughby headquarters last week.
NRL chiefs are understood to have told Nine the same as they told Foxtel - that they do not want to rip up the combined $1.8 billion joint five year broadcast contract which expires at the end of the 2022 season.
But with Nine withholding payment, ghe Australian Rugby League Commission is facing a financial crunch. Yesterday it told clubs they would each receive $2.5 million to provide "certainty for the remainder of the 2020 season."
The deal was unanimously supported by all 16 NRL clubs, who still have to finalise agreements with players for salary cuts.
Chairman Peter V'landys said he is hopeful the season "will restart as quickly as possible, ideally by July 1".
The ARLC statement said: "The crisis has highlighted that the game's present cost structure is not sustainable and the ARLC will lead by example in substantially reducing its costs now and into the future."
Mr Greenberg said the new revised financial models given to the clubs and cost cutting measures being put in place would help make the game more sustainable in the future.
"We are working together to achieve the best outcome in the short, and long term. We must use this opportunity to reset the game's costs and overall structure," he said.
"These measures will put the game in the best position to rebound strongly from the pandemic."
Originally published as Nine to save $130m if NRL is cancelled