Rugby league is now in a stronger position to negotiate a billion dollar broadcast deal after the NRL, AFL and Telstra won their battle against Optus.

Rugby league's billion dollar pay-day is again within sight after the Federal Court banned Optus from broadcasting football matches online.

In the midst of negotiating a new broadcast deal hopeful of fetching $1.2 billion, the Australian Rugby League Commission strengthened its position at the bargaining table on Friday as the Federal Court upheld an appeal from the AFL, NRL and Telstra.

It overturned a previous Federal Court ruling allowing Optus customers to use the TV Now service to view matches online - with a delay of as little as two minutes.

"We have always believed there was a clear principle in play here: that the sports are entitled to control who shows their events and who profits from those events," ARLC chief executive David Gallop said.

"Companies should not be able to profit from our content without investing in the sport itself."

The ARLC is deep into negotiations on its new broadcast deal, with the first offer from current broadcasters Nine Network and Fox Sports due in the coming weeks before rival networks are permitted to make an approach.

The online rights are being negotiated separately.

ARLC officials claimed they had no idea of the financial value of the decision - having not calculated how much it would have cost had the appeal been thrown out - other than to say "it would have a significant impact on our revenue."

With the AFL's online deal with Telstra having snared $153 million over five years, the decision could tip rugby league's deal over the $1 billion mark.

"We have partners who are working with us to develop innovative new ways of experiencing the game and they are doing so in ways that benefit the fans, the players and the sport in general," Gallop said.

"It is important that we all share in the opportunities that new technology provides but this can't be at the expense of our basic commercial rights and this is an area that government needs to continue to address."

AFL chief executive Andrew Demetriou said it was a common sense decision which vindicated the strong stance taken by the leagues and Telstra.

"It is a relief for not just AFL but for all sporting codes who rely heavily on these rights and the revenue from these rights," Demetriou told reporters.

"Today's decision is a win for all sports in this country.

"I thought Optus' behaviour was unethical and inappropriate. It will be a long time before we speak with Optus."

He warned Optus, which was weighing up its options, about challenging the decision.

"They have to think very carefully about that. The three Federal Court judges were unanimous. Any appeal would be costly and take time," Demetriou said.

Federal Court judges Paul Finn, Arthur Emmett and Annabelle Bennett ruled that as the creator of the recordings, Optus was contravening copyright laws.

Its edict dismissed the earlier ruling that customers were responsible for the recordings, saying TV Now recordings were "not made by the subscriber alone".

"It was made either by Optus alone or by Optus and the subscriber," they said in the judgment.

The ruling strengthened Telstra's role as the dominant broadcaster of online sports.

"This judgment is a great result for everyone who cares about the financial health of Australian sport," a Telstra spokesman said.

V8 Supercars - which also has an internet and mobile rights partnership with Telstra - and Cricket Australia also welcomed the decision.