The intense fight over telecast rights to 2004-08 cricket matches in India, is more for strategic reasons, rather than commercial ones, according to industry insiders and media planners. More than two weeks after bids were accepted, the Board of Control for Cricket in India (BCCI) is yet to give its verdict on who would get the rights. That, however, is not stopping number-crunchers from doing valuations of the property.
Even though an independent study had earlier estimated that the rights-holder would earn revenues worth Rs 2,000 crore from the four-year India matches, market forces are coming out with more realistic and toned down numbers now. While officials in Zee (the highest bidder at over Rs 1,200 crore) are saying “it’s too early to comment,” ESPN India managing director RC Venkateish puts the total advertising revenue from the four-year matches at Rs 560-600 crore. “Even this is an optimistic estimate,” says Mr Venkateish. ESPN, which was the second highest bidder at Rs 1,000 crore, is trying for the rights too. Zee officials, however, are quite bullish that direct-to-home (DTH) would push its sales.
Media planners are cautious. Mindshare India managing director Ashutosh Srivastava calculates ad revenues over a period of four years at around Rs 500 crore. The remaining would depend on how much revenue the rightsholder can make from the international market, he says. Mr Srivastava adds that it’s unlikely that broadcasters would be able to make a profit, or even break even from the BCCI property.
According to Madison India general manager Basab Dutta, the total revenue expected to be generated from BCCI matches is around Rs 1,000 crore. She puts the ad revenue at 60 per cent of the total — Rs 600 crore. Even as there may not be too much of a commercial upside attached to the BCCI rights, “home series always generates public interest and viewership,” she reasons. Cricket often generates more interest than soaps such as Kyunki...., she says.
“By itself, on a standalone basis, BCCI matches would not offer much in commercial terms,” according to Mr Venkateish. But the strategic significance of the rights is huge, he indicates.
Distribution figures could vary, depending on the regulatory mechanism in place, argues Mr Venkateish. “If one is doing extremely well, around Rs 60 crore a year can be expected on distribution,” he says.
When contacted, managing director of Hathway K Jayaraman said: “I’m not qualified to talk about distribution/subscription figures.” Hathway is one of the multi-system operators (MSOs) of the country.
Meanwhile, sources in the broadcasting industry have estimated that cable subscription/distribution revenues from the four-year matches would be around Rs 130 crore.
As per this estimate, ad sales have been put at around Rs 500-550 crore; international syndications at Rs 150 crore; revenues from pre and post-programming at Rs 54 crore; and alternative distribution such as direct-to-home could fetch another Rs 100 crore. On the whole, total revenues from four-year BCCI matches could come to around Rs 1,000 crore.
This is based on bid document details such as number of days of international cricket per year.
The BCCI document says that there would be 27 days of international cricket per year. Since one-day-internationals (ODIs) are more popular, this estimate has kept the number of ODIs per year at 12, and tests at 15 days a year.
Average ad rate has been kept at Rs 45,000 per 10 seconds for test matches and Rs 1.5 lakh per 10 seconds for ODIs.
In addition, there would be ad sales on Doordarshan also. On the cost side, consider the bid amount (Rs 1,200 crore for Zee and Rs 1,000 crore for ESPN). Add another Rs 200 crore as production cost for the four-year matches.