All Blacks, Amazon and the American Dollar

Despite rugby struggling to gain a foothold in the US – deep-pocketed US companies, sensing an opportunity, have New Zealand Rugby on speed dial.

According to a Herald report last week Amazon is a fan of the All Blacks and has been in discussion for months with NZR to put its branding on the front of their jersey.

The deal, if done, would mean the biggest jersey sponsorship in rugby history – the likely price worth upwards of $20 million annually – and would go some way to extract NZ Rugby from its financial difficulties. 

NZR reported a $34 million dollar loss in 2020, a result NZR blamed largely on the impact of Covid.

But it’s not just Amazon that’s looking down under for investment opportunities.

In April NZR approved a deal with Silver Lake, the Silicon Valley-based private equity firm that has more than $83 billion USD in assets.

Both the South African Rugby Union and Rugby Australia are also considering raising capital through private equity. 

The NZR deal would see the US firm take a 12.5 per cent stake in its commercial operations. Standing in the way of the deal is the New Zealand Rugby Players Association who also have to agree, and have put forward an alternative, locally funded, proposal.

The Herald reports that Amazon will most likely use the jersey to promote its Climate Pledge initiative which was established in 2019 and represents Amazon’s commitment to be net-zero carbon across its business by 2040 (Amazon is actively seeking other companies to sign onto the pledge to decarbonise their operations).

The sports lure

Clearly, our international “clean, green” standing is part of the attraction for Amazon but there’s also a suspicion that the move signals more than a spot of brand greenwashing, and that Amazon may have a long term plan to secure the All Black’s broadcast rights (at the moment Sky TV is the existing rights holder paying an estimated $100m a year between 2021 and 2025.)

Amazon has had rugby on its radar for a while now. 

Its annual All or Nothing sport doco featured the All Blacks in 2018 and it bought the rights to 2020’s Autumn Nation’s Cup, an extended Six Nations tournament that also featured Fiji and Georgia.

Amazon has also been talking to New Zealand Cricket. Last year it acquired exclusive Indian territory rights to live stream New Zealand’s home international cricket matches until 2027.

The reason for the cash splash is to shore up content for its Prime Video streaming service. The company belatedly recognises the importance of targeting local markets.

“We always start with the country or the territory,” Marie Donoghue, Amazon’s vice president of global sports video, told SportsPro in December. 

“We figure out what are the most attractive sports offerings for those audiences? Where is there an opportunity? Why should we come in? Is it a good thing for us to come in and serve these customers for them? Will they find it addictive? Sports are largely inherently local. No matter how much we talk about the global appeal of sports, which they have, ultimately the most passion is often local.”

The tactic is to lure subscribers with sport offerings and expose them to broader Prime Video entertainment offerings and membership benefits.

If Amazon picked up the rights to the All Blacks game here Prime Video’s NZ subscription numbers – which probably aren’t that fantastic – would blossom overnight.

Over the last few years Amazon has been incrementally increasing its relations with New Zealand – negotiating a deal with the government – and receiving a hefty tax rebate over filming the LOTR TV series; this month, it opened up its Australian site to NZ shoppers and businesses.

Amazon shopping for rights

With many sporting codes and broadcasters struggling for cash as a result of the pandemic, Amazon has got out its chequebook.

In May it paid $8.45 billion USD for MGM studios, acquiring the James Bond and Rocky franchises.

But the holy grail for the world’s second-largest streaming company is securing live sport broadcast rights.

The company just announced that it will live-stream 16 regular WNBA games this year. Prime Video also streams New York Yankees games, ATP tour events, the US Open and the Premier League as well as providing live sports coverage through its Channels feature, which gives subscribers access (with an added cost) to out-of-market packages such as NBA League Pass and MLB.tv. through the one service.

This month Amazon announced it was buying the rights to France’s Ligue 1 football competition making it France’s main football broadcaster.

One of the biggest gets in the US (and available to NZ viewers) was securing the exclusive right to air NFL’s Thursday night game starting next year, a $13.5 billion USD deal which put the major US networks on notice that the retail giant was serious about the sports media sector. 

While getting your sports from one provider is convenient for fans Jeff Shulman, a marketing professor at Washington University’s Foster School of Business, told Politico that Amazon’s power raises other questions.

“After Amazon expands within sports, the delivery of sports will be re-imagined. The downside is that competing companies will struggle, and people will become more and more reliant on Amazon.” 

Amazon’s gone from squashing Mum’n’Dad stores to crushing corporate broadcasters. 

In New Zealand, the sports rights battle has been between Sky Sport and Spark. 

While Sky has locked down the All Blacks, Spark nabbed the Cricket rights from them in 2019. Last month Spark Sport secured the Uefa Champions League and Europa League for the next three seasons and announced that it had also secured the rights to this year’s Rugby League World Cup (Sky currently hold the NRL rights until the end of the 2027 season). Sky has the major golf coverage while Spark is big on motorsport.

The imminent arrival of Amazon to the local sports landscape will have both companies on their toes, even if that impact is a few years away.

Sports fans may be loyal to their teams but they’ll go wherever the games are, especially with Amazon Prime charging, at present, just $8 NZD a month (Amazon Prime delivery isn’t yet available in NZ, but it can’t be far away.)

For Amazon, a logo on the All Black’s jersey is, one suspects, just the first step to a long association with the premier team in world rugby.

If a whale like Amazon did, at some point, jump into the local broadcast rights pool, Sky and Spark would soon be calling for the lifeguards.

Meanwhile, NZR will be hoping like hell nothing gets in the way of the avalanche of US dollars heading to its long-suffering bank account.

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