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The AFL's broadcasting rights could be worth $1.6b in 2016

The AFL TV rights deal may go up to $1.6 billion in 2016.

The AFL TV rights deal may go up to $1.6 billion in 2016. Photo: Phil Carrick

A leading media analyst predicts the next AFL broadcast rights contract will be worth up to $1.6 billion, as the league moved to beef up its intricate knowledge of the media by appointing former News Corp chief Kim Williams to its board.

Williams, a Port Adelaide supporter, has replaced Rio Tinto boss Chris Lynch, who is based in London, on the nine-member board.

The current $1.25 billion, five-year broadcast rights deal with Seven West Media (Channel Seven), Foxtel and Telstra does not expire until after the 2016 season but talks are likely to accelerate later this year.

The AFL had already strengthened its broadcasting knowledge, securing former Foxtel executive Peter Campbell last year to head its AFL Media division.

Williams was in charge at News Corp when Foxtel brokered its most recent deal with the AFL. He had previously been chief executive of Foxtel for a decade.

Roger Colman, an experienced research analyst with CCZ Stratton Equities, would not rule out a new broadcasting deal reaching $2 billion but said it was more likely to fall short. ''I gave 5 per cent per annum on $1.25 billion, I got to between $1.5 billion and $1.6 billion. That's what I think it's worth even at a premium inflation rate compared with expected TV advertising growth,'' he said.

''[It includes] a premium inflation rate with sports rights, with a certainty of ratings and cross-promotional benefits and the fact it is 'tentpole' stuff that networks need relative to general advertising and product revenue availability.''

What could inflate the contract is if networks Nine and Ten join the bidding. Nine was not involved in discussions in 2011, while Ten initially wanted to retain the rights it had held since 2002 (initially with Nine and Foxtel) but pulled out because of financial problems.

However, with the value of live sport escalating, in part because it cannot be illegally downloaded, there are suggestions Ten, also buoyed by its ratings for the Big Bash League and the Sochi Winter Olympics, could be involved in a bid.

''We will look at any significant sport rights contract, as long as it makes economic sense for our business,'' Neil Shoebridge, Ten's director of corporate affairs, said on Monday.

Williams said on Monday that developments in the digital side of the business would be ''incredibly interesting''. His nomination was recommended by a sub-committee of Collingwood president Eddie McGuire, West Coast chairman Alan Cransberg, commissioner Linda Dessau and AFL chairman Mike Fitzpatrick.

The Australian Financial Review reported on Monday that Williams' appointment had an even deeper meaning, and was linked to the fierce behind-the-scenes battle between the AFL and the reporting of the Essendon supplements scandal by News Corp newspapers, the Herald Sun and The Australian.

''News Corp is perceived to have taken the side of suspended Essendon coach James Hird. After Mr Williams lost his reform battle at News against senior editorial executives Peter Blunden and Chris Mitchell, his appointment as an AFL commissioner is being seen as payback by AFL chief executive Andrew Demetriou,'' AFR columnist Joe Aston wrote.

Fitzpatrick and Williams, however, denied the claims.

''I'm quite perplexed by that,'' Williams said. ''I could actually construct it in quite a different way and say it arguably links the organisations through an intimate understanding on both sides.''

Fitzpatrick said ''Andrew had nothing to do with this appointment''.

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