Nine (ASX.NEC) has renewed the National Rugby League, or NRL, free-to-air rights for the 2028 to 2034 seasons. The deal equates to a net annual average cost of $150 million, including $15 million in contra deals, and covers three weekly live games, plus Grand Final and State of Origin exclusivity.

Why it matters: The 15% lift on the current deal, on an annual average basis, may be less than consensus had feared. But we anticipate no incremental revenue, a common travesty inflicted on traditional broadcasters around the world by premium sports organizations.

  • In the end, Nine had no choice, even though the new rights will lift NRL’s share of its TV costs to 20% before related production and staff expenses, from 16%. A failure to renew would have punched a big hole in Nine’s dominant 43% share of the total TV advertising market.
  • It is a scenario too dire to contemplate and one the NRL ably exploited. One only needs to witness the fall in relevance for Ten Network when it lost the Australian Football League rights in 2012. Its revenue share immediately crashed from 30% to 21% and has drifted downward ever since.

The bottom line: We cut our fair value estimate by 9% to $2.00, reflecting an average 8% downgrade to our EBITDA forecasts from fiscal 2029, the first full year of the deal. Worse than no incremental revenue, we cut our longer-term revenue assumptions on the linear broadcast front.

  • The traditional twin benefits of marquee sports on traditional free-to-air TV (mass audience aggregation, promotional platform for the rest of the schedule) are wearing thin. We do not expect the anticipated revenue shortfall to be offset by advertising dollars from 9Now streaming.
  • Nevertheless, shares in no-moat Nine are trading at just 4 times our forecast fiscal 2027 EBITDA. At such a depressed multiple, it only takes stabilization in the advertising market for earnings and sentiment to rebound, especially with $160 million in costs targeted to be cut by fiscal 2027.

Nine renews National Rugby League TV rights

Amid economic uncertainties, we are encouraged by Nine Entertainment’s progress on factors within its control. The balance sheet is in good shape, even after the $850 million acquisition of QMS Media. TV ratings, advertising market shares, and pricing are strong than ever. Critically, management is still restructuring the cost base and improving operating efficiency.

Through Nine Network, Nine offers exposure to the $3.2-billion Australian free-to-air television advertising market. This media segment has remained flat during the past decade, after enjoying growth of around 6% in the preceding decade. The slowing growth has been caused by proliferating digital media alternatives, rapidly changing entertainment consumption habits, and broadband usage. Indeed, the structural headwinds have been such that the free-to-air TV industry’s share of the Australian advertising pie has slumped from more than 35% in the mid-2000s to just 20% currently, as advertisers follow viewers to digital media platforms.

The key investment consideration comes down to Nine Network’s EBITDA margin outlook. This is important in the face of increasing competition for viewers and for content (from digital upstarts and incumbent television broadcasters).

In March 2026, Nine completed the acquisition of outdoor advertising entity QMS Media for $850 million, while it is in the process of selling its radio unit for $56 million and its regional TV unit for $15 million. We fundamentally support the strategic shift away from legacy assets (TV and radio), and toward structurally sounder segments (outdoor). But it is outlaying net $818 million, or 6.5 times forward EBITDA (inclusive of $20 million synergies), for an outdoor business from private equity ownership, with opaque financials, track record and management, at least to public investors and analysts.

Bulls say

  • Nine Entertainment commands a strong position in the Australian free-to-air television industry, with number-two ratings and revenue share positions.
  • The company generates solid free cash flow and boasts a strong balance sheet, key attributes that allow management the flexibility to invest in programming while engaging in capital-management initiatives.

Bears say

  • Nine Entertainment’s recent increase in ratings and revenue share has come at the expense of Ten Network. There is a risk of mean-reversion as Ten Network recovers from its current all-time low position.
  • The free-to-air television industry is structurally challenged, with proliferating entertainment choices for consumers.

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