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Champions League T20 spells threat for GECs, other cricket forms and overall media costs

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Champions League T20 spells threat for GECs, other cricket forms and overall media costs

When ESPN-STAR Sports secured the 10-year global commercial rights for the Champions League Twenty20 on September 11 with a bid of $975 million, it surely made its place in the history of cricket rights’ acquisition. This makes the Champions League Twenty20 the highest value cricket tournament on a per-game basis. However, media observers are concerned about the impact that this acquisition cost would have on the overall media environment.

Media observers see T20 as a format hit other forms of cricket like test matches and one-day internationals (ODIs). The year gone by has proved that the crisp T20 format has worked well with the viewers – the T20 World Cup, Indian Premier League and other T20 matches. TAM Media Research shows that for the C&S 15+ in the all-India market, the Idea Cup threw 4-plus ratings for Ten Sports, where T20 World Cup and IPL matches rated 6-plus and 7-plus, respectively, on an average. To add to this, there are quite a few T20 matches lined up that might take away the advertisers’ focus from the test matches and ODIs.

Sam Balsara, Chairman, Madison World, explained, “Too much of a good thing is also bad. I haven’t figured out what ESPN paid per day, per match, but I believe that it is higher than what Sony had paid. This is going to drive not only cricket rates but also overall advertising rates higher. There would also be immense pressure on existing rights owners of test series and one-day matches owners, who would in turn put pressure on organisers to convert these series also into T20.”

The second area that would be affected is other genre. During both the T20 World Cup and the IPL season one, the games had eaten into the viewership shares of other genres, including that of news and Hindi general entertainment channels. Industry leaders are expecting similar trends in December 2008 as well. Balsara said, “The T20 ruling the roost, cricket would also eat into other genres, especially the general entertainment genre. Earlier in the IPL, it was only a few hours’ overlap, but now it is bang on. There is too much T20 though. We have hardly finished the IPL, when there is ICL coming up, and then the Champions League, and then IPL again.”

Jasmin Sohrabji, MD, OMD India, observed, “The fact is that every time there is a big cricketing event, clients, especially the ones that look at sports closely, take money out to put on cricket. This money comes from other properties and genres. It could be any non-news property, but the general entertainment genre would be hit the most as that consumes a large portion of media budgets. So, there is money there to pull out.”

The most significant impact of an acquisition deal like this is the high cost that it would mean to the advertisers. Shashi Sinha, CEO, Lodestar Universal, explained, “There is no doubt that a deal like this would further drive up the costs. The World Cup saw Rs 250 crore to Rs 300 crore at one time, and now we are looking at Rs 400 crore per year, and that is not a simple amount. The moot question is whether people would pay or not, but there is madness in the market. On the one hand, people talk about CPRPs (cost per ratings points), and on the other hand, they want to be on premium properties.”

However, there is space for such properties, at least on the sponsorship level. Big advertisers want to be associated with cricket as sponsors and the fact that only one per category can be a sponsor leaves the field open for other properties to nab the advertisers who are left. ESPN-STAR Sports made hay during the T20 World Cup and they are clear they want cricket on their channel. The hike in ad rates that was about 60-70 per cent on the final matches has given the media entity enough confidence to pay such a high acquisition amount for the Champions League Twenty20. Media observers agree that the basic advertisers would come on board. But cricket is an unpredictable game. The fate of the leftover inventory would be decided on which way the pitch turns.


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