Starry starry rights from BCCI

03 Apr,2012

By Rishi Vora

 

Star India’s winning the rights to broadcast Indian cricket for six years – from 2012 to 2018 – is a significant development in the Indian sports arena where cricket is the only celebrated sport, and the one that attracts the maximum moolah.

 

Though Star has won the rights much to the joy of the senior management team, the fact is that it has come at a staggering cost of Rs 3,851 crore for 96 matches.

 

What this means is – for every single match played in India till 2018, Star will pay BCCI Rs 40 crore as part of the contract. The contract also says that Star will also have the rights for internet and mobile besides TV.

 

Mr Uday Shankar, CEO, Star India said in a prepared statement, “BCCI is a great property and we are overjoyed to have an opportunity to develop it further. It was decided amongst ESPN Star Sports, ESPN and Star that Star would bid for the rights and if Star were to win the rights it would be exploited in collaboration with ESS.”

 

So while it is great news for Star India for it augments its position as a network, there are some murmurs within the industry on whether it is a viable deal as far as profitability is concerned, especially when Indian cricket has seen one of its worst ever phases of late.

 

A broadcaster of a sports channel who requested anonymity said, “It’s a move from Star to dissuade MSM from its cricketing interests. MSM already have the Indian Premier League which is one of India’s biggest properties, so the BCCI rights would have put them in a superior position in the industry. Hence it’s a setback of sorts for them, especially when they’ve been in the news on launching a sports channel.”

 

He further said, “The price Star is paying is on the higher side. But it’s not very surprising that they’ve won it for the price they have, as they have the strength and the clout to pull off a high-value deal such as this one.” MSM came second to Star with a bid of Rs 3,700 crore.

 

T Gangadhar, Managing Director, MEC India commented on the development: “Sports is a rights-driven genre and channels compete on that basis. As faras exploiting rights is concerned, Star India has announced they will collaborate with ESPN-Star Sports, an already established player. To that extent, life is as usual. However, going by the size of the winning bid, it is clear that Star is betting big on digitisation and increasing subscription revenue therefrom.”

 

With the BCCI deal, ESS has now become a significant player in Cricket. They’re the official broadcasters of ICC matches, plus Australian and England cricket. Ten Cricket – the channel from the Zee stable airs matches played in South Africa, Sri Lanka, West Indies.

 

Neo banked on World Series Hockey after having lost the rights for Indian Cricket. They however continue to own Bangladesh rights – the Asia Cup which was recently concluded was aired on Neo Cricket.

 

Neelkamal Sharma, COO – Buying, Madison Media Group said, “For sports as well as for Star, it is really a big news – Star TV acquiring the rights for Indian Cricket for next six years. Since rights are with Star TV and not ESS, there could possibly be some more development on the way forward and time will tell what will those developments be.

 

He further added, “There will be some consolidation of sports companies in the near future to leverage this opportunity. I will not be surprised if Star becomes a dominant player in sports as and fiction”

 

According to Mr Mahesh Ranka, it will take some time before the investments could be recovered. “I can say that by the end of six years, Star will make money out of this deal on the back of subscription plus advertising revenues. It’s just not the Indian market. There are a lot of viewers who follow Indian cricket in other countries. Plus they have the mobile and the internet rights too. So it seems to me that it’s a good win for Star.”

 

On what it means to other players in the sporting arena, Mr Ranka said, “Sadly cricket is the biggest game in India and quite clearly, other players such as Neo and Ten Sports would face a bit of a setback. They’ll survive, but that’s not the big question. The big question is whether they will be able to grow and build from where they’re now.”

 

Advertising revenue may not be much in the first few years, and experts predict price points to range from 2 lakh to 3 lakh per 10-second spot. Profitability will be an issue.

 

Star Network is poised to gain more strength. But will the Star shine yet again?

 

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