In the Darwinian world of sport, if players kept racking up heavy losses the way sports broadcasts do they'd be moved on pretty quickly.
Retired, traded, whatever, a new game plan would be drawn up.
TV can be a brutal game, but where big ticket sport is concerned it is fairly forgiving.
These "losers" maintain their spots at the top of programming schedules year after year.
The bottom line statistic of whether sport broadcasts make money or not appears to be less important than the more nebulous, unmeasurable idea of the cachet they bring to the razzle-dazzle world of TV.
Will anyone win?
The Nine Network was immediately cast as the big loser in Cricket Australia switching allegiances to Foxtel and Seven.
After 40 years Nine was finally out, trudging dolefully back to the pavilion and thinking about re-tooling its game for tennis.
Over at Seven, bringing cricketers in to replace the departing tennis players has been seen as one of TV's great recruiting coups.
Seven desperately needed a summer sport, having lost its 40-year-old Australian tennis franchise to Nine.
Just who will come out of the swap on top won't be known for years. Maybe neither given the current dire situation in TV.
Free-to-air (FTA) TV is fuelled by advertising dollars and the giant global digital players — such as Google and Facebook — are draining the limited Australian advertising pool at an alarming rate.
The big investment bank Morgan Stanley says this trend won't change and traditional media is becoming increasingly irrelevant to investors, who are looking for growth in the likes of internet plays such as Seek, REA and Carsales.
"For context, back in 2004, internet accounted for only around 5 per cent of the estimated asset value amongst our stocks. The other 95 per cent of asset value sat in traditional media — TV/newspapers/radio," Morgan Stanley's media analyst Andrew McLeod wrote in a research note earlier this year.
"But that has changed dramatically. Today, 80 per cent plus of the value is now ascribed to internet/digital/technology assets," Mr McLeod said.
So it is not just viewers switching off, the financiers are too.
PHOTO: Morgan Stanley estimates of Australia's advertising spend by platform.
Nine will lose less money on tennis, but still lose
Nine may have been given its marching orders, but it can take some sort of solace that it won't be losing as much with tennis as it was with cricket.
"The tennis was already loss-making for Seven with advertising revenues not covering the total costs, and we estimate that Nine will make an annual loss of $20-to-$30 million on the tennis," Citi's media analyst David Kaynes said.
"This is a much better outcome than the around $50 million annual loss it had on the cricket previously."
Unlike cricketers, Nine may well have been happy to walk. Keeping contracted Australian players in the lifestyles they have become accustomed to is not cheap.
Seven's Tim Worner was only too pleased to canvas the relative merits of tennis and cricket from a broadcaster's perspective.
Winners are not supposed to gloat in sport, but hey, this is TV sport. Whack Nine, whack tennis, uncork the champers and spray it around.
"Financially this is a much better deal for Seven West Media than tennis," Mr Worner told a media conference.
"You just have got to look at how many hours [we will broadcast] — daytime hours and you get to charge prime-time rates for it."
While it is debatable just how much reflected glory the current shambles of the men's test team casts on its commercial partners, Mr Worner was looking at the bigger picture for the small screen struggling with declining viewer numbers.
"This deal is about certainty, it gives us 400 hours of premium sport. With tennis we had, say 14 nights versus 70 days and nights [with cricket]," Mr Worner said.
The "Halo Effect"
So how big is the kitty Seven, Nine and Ten are fighting over.
Investment bank Morgan Stanley puts the total Australian advertising pool at around $14 billion a year, with the FTA-TV spend flat-lining at $4 billion.
The FTA ad revenue in January over recent years was estimated to be around $200 million, with Seven nabbing around 42 per cent, Nine a bit less and Ten a lot less.
In money terms, it is not a big month but the interminable promotions pumped out early can set a network up for the year.
Tennis is an intense ratings winner over two weeks. If an Australian player or two can somehow scramble into the final week, that is a bonus.
Cricket is a slower burner over summer, but the advent of the fast-paced Twenty20 Big Bash has reinvigorated the economics of the game.
"Nine will find it difficult to recoup the entire tennis investment via a corresponding ad revenue take," Deutsche Bank analyst Entcho Raykovski wrote in a research note after Nine picked up the tennis rights.
Nine has the potential to sell some of the rights to pay-TV or streaming platforms which would offset some of the costs, but once again it is more about giving the network a winning glow rather that a profitable commodity.
"The tennis broadcast also provides a solid platform for the launch of Nine's programming schedule from 2020 onwards, but this halo effect can be notoriously difficult to quantify," Mr Raykovski said.
That is borne out in the startling divergence in sporting rights' price inflation compared to the stagnant pool of free-to-air TV revenues and profitability.
The various big sporting codes have seen their value of their sporting rights soar. If it was property or equity markets, there would probably be dire warnings in the media of impending bubbles waiting to burst.
But in the sporting board rooms and change rooms, it high fives all around as the cash flows in.
A bubble?
Forking out for broadcast rights is just the start. Then there is the heavy cost of running the outside broadcasts, lugging the gear and associated retinue around the country.
Add to that the healthy sinecures paid to the hosts and former players for a couple of months' work and it is easy to see why sport on TV loses money.
Is it sustainable?
So how are the TV stations paying for their largesse?
Out of booming profits? Nope, they're about as patchy and unreliable as the Australian XI's top order.
Steadily growing and sustainable revenues from the advertisers? No, they are grinding lower.
FTA revenues shrinking while profitability is drying up
Revenue and net profit of Seven and Nine networks over past five years
The picture is not so rosy at Foxtel either. With its merger with Fox Sports imminent, its owners News Corporation (65 per cent shareholder) and Telstra (35 per cent) will be delighted to snag another glittering trophy before its likely spin-off.
Foxtel's financials are not the most transparent on the planet, but last year's revenue stream fell by a lazy $100 million to $3.2 billion.
News Corp wrote down the value of its investment by $290 million.
Foxtel's contribution to Telstra fell by about a third to $123 million, and is fairly small beer in a total profit of nearly $4 billion.
Foxtel's boss Patrick Delany pointed to the digital rights and the potential for streaming matches as the big game-changer in the deal.
"I don't think you can assume the reach will be the same, the reach will change," Mr Delany said.
And that is a blessing and a curse for FTA-TV. The ability to sell streaming rights mitigates the rising costs of sporting rights to some extent, but it accelerates the time-shift away from traditional "appointment" TV.
So are Australian TV rights some sort of "magic pudding" that will keep growing as the the big sports codes keep taking bigger and and bigger serves?
Falling sales revenues and profitability and costs rising by 50-to-150 per cent every five years or so, suggest it is not sustainable.
It was telling that Ten, now owned by US giant CBS and arguably the best capitalised broadcaster with the deepest pockets, didn't make a meaningful bid in the recent auction frenzy.
For the foreseeable future, FTA-TV will continue to treat sport as retailers would a "loss leader" to drag the punters in.
However, if the losses keep mounting the intangible "halo effect" won't pay the bills.
The bigger question is how will sport satisfy its insatiable appetite for more money if the networks not only won't, but can't pay any more.
This article was published and provided by the Australian Broadcasting Corporation.
http://www.abc.net.au/news/2018-04-15/the-economics-of-tv-sport/9654004