Any thoughts that the days of record TV sport deals were over have just been blown out of the water.
There was a time, not so long ago, when it seemed that Australian sport's TV deals had reached the end of days.
But the new deal the AFL has struck with Foxtel and the Seven Network, worth $4.5 billion over seven years, has created a new paradigm.
This at a time when free-to-air TV audiences are declining and viewers on the myriad of streaming services have more choices than ever.
In 2015, the AFL announced they'd sold their TV rights to Seven and Foxtel for the seasons spanning from 2017 to 2022 for what the league itself described as a "colossal" $2.5 billion.
The thinking amongst media commentators then was that it was never going to get better than this – that media companies had been paying too much for sport and surely now the price was going to drop.
"We've been the leader of that camp," Steve Allen, director of strategy and research at Pearman Media, said.
"We've been saying for too long that sports rights generally — AFL in particular, but also NRL — have peaked out, that telecasters can't afford to pay any more, but yet again we've been proven wrong."
It seems the AFL is a league of its own – "the greatest game in the world," according to chief executive Gillon McLachlan — and his broadcast partners seem to agree.
So while the Seven Network has taken legal action against Cricket Australia to terminate its $450 million TV rights deal, because it felt it was paying over the odds for a sub-standard Big Bash League, it's happy to keep paying big money for the AFL.
The 2015 AFL deal continued a steady increase in AFL rights which were worth just $6 million per year from 1987 to 1992, then continued to increase by at least 50 per cent every time a new agreement was signed.
Even when COVID-19 disrupted the AFL in 2020 and 2021 and the broadcasters managed to get a discount for a couple of years, the contract was renegotiated for even more money for the 2023 and 2024 seasons.
And here we are now, $4.5 billion later.
So what's going on?
For one, the AFL has been courting many broadcasters to bid up the price, including Paramount Global — the owner of the Ten Network and Paramount + in Australia — as well as Channel Nine and Stan.
The numbers suggest the amount of viewers watching the AFL on TV is growing.
This year, the average number of viewers watching each one of the 198 home and away AFL matches was 537,000, according to figures compiled by the Sports Industry AU website, based on Oztam ratings.
In 2019 (the best comparison year prior to the two COVID-disrupted years), the figure was an average of 461,000 per game, according to the AFL's annual report.
The big change between 2019 and 2022 was the proportion of people watching the AFL on subscription TV via Foxtel or its streaming platform, Kayo.
In 2019, subscriptions accounted for 37 per cent of viewers — this year, it's 54 per cent.
The number of free-to-air viewers watching on Seven declined from 290,000 per match in 2019 to 278,000 this year, despite the overall increase in viewing numbers.
The decline in free-to-air viewers confirms what we all know: TV as we used to know it has been steadily falling and the demographic is getting older.
"The market's fragmenting at an increasing rate," Allen said.
"The main channels are down about 18 per cent."
And the kids don't watch free-to-air TV at all, they're either playing games or streaming.
So free-to-air numbers are declining for Seven, but Foxtel also has more competition on its hands from the likes of Stan, Binge, Amazon Prime, Disney+, Apple and YouTube, not to mention the free-to-air broadcaster's video-on-demand services like the ABC's iview.
With that much competition in the market, how is it that the price for AFL rights keeps going up?
Allen has several theories.
"Telecasters who are happy with their ratings and their performance of various sports are very unwilling to let them go," he said.
The AFL was able to eke out the last $50 million, Allen says, despite the rival bids from Nine and Paramount Plus because Seven and Foxtel simply didn't want to let go.
The AFL ratings remain very good, particularly for Thursday, Friday and Saturday nights.
The other devil in the detail that the AFL is yet to reveal is how exactly that $4.5 billion will be broken down.
Allen believes Seven's proportion of the total rights deal may have gone down, which in part explains why it can afford to keep paying for a product despite declining viewing numbers.
Moreover, it's been guaranteed a high rating slot on Thursday nights for 15 matches every season.
The downside is that the new deal means for the first eight rounds of every season, Saturday matches will be played exclusively on Foxtel and Kayo and those footy fans who can't afford to pay for a subscription aren't going to be happy.
"I think you're going to get a bit of hostility, you're going to get a bit of pushback," Allen said.
The AFL will have to find a way to placate those viewers and it remains to be seen whether extra Thursday night games will be enough.
AFL fans outside Victoria will be able to watch their local teams on a Saturday on free-to-air TV, but the matches will be delayed by two hours.
And the AFL is promising that 10 per cent of all its revenue will go to grass-roots football from next season.
The AFL is also promising a minimum of 30 AFLW games will be broadcast on free-to-air TV.
As for Foxtel, Allen said the AFL was a loss leader for the subscription service and for very good reasons.
"You can imagine if they lost the AFL, that would put a very big hole in Kayo, it would put a very big hole in their overall programming and ratings."
Media commentator Peter Cox says the broadcasters "are trying to grab what they think can be the cornerstone for their network".
Cox calls them "tentpoles" – a product that supports the broadcast's other offerings, even if it in itself runs at a loss.
"Aussie Rules football, firstly it's national, which they like … from a network's point of view, it's the one sport that's doing well," Cox said.
The sport's doing well, alright — and the AFL's now got an extra $4.5 billion to prove it.
