Sky Television says it will possibly lose the rights to broadcast the next Rugby World Cup.
The company said it has been told overnight that it was not the preferred bidder for the New Zealand broadcasting rights for next year's tournament.
It said it has been told negotiations were underway with the preferred party, and that its bid remained in play should those negotiations fail.
Sky TV said it was disappointed not to be the preferred bidder, but it was an economic reality that it could not have every match of every sport that New Zealanders like to watch.
Sky said the Rugby World Cup was an incredibly expensive six-week event that occurred every four years, and it still had the rights to broadcast Super Rugby and domestic games, as well as All Black tests.
Sky's share price dropped more than 7 percent shortly after trading on the NZX opened this morning. Its shares have now fallen by almost 40 percent in the past year.
Spark and TVNZ reportedly launched a joint bid to get the rights late last year.
It is estimated that NZ Rugby earns up to $70 million a year for its television rights.
Sky TV chief executive John Fellet, who has led the company for 27 years, announced earlier this week he would step down within a year.
However, cost-cutting led them to record a net profit of $66.7 million for the six months ended December, up from last year's $59.5m.
Last year, the Commerce Commission turned down Sky's planned merger with telecommunications company Vodafone because of concerns of market dominance. It has appealed against that decision.
The Rugby World Cup will be held over six weeks in Japan between September and November next year.