Sep 13, 2008

Business - ESPN-Star on a strong wicket in cricket broadcasting business

Leading sports broadcaster ESPN Star Sports, a joint venture between Disney and Rupert Murdoch's Star, has overshadowed its rivals in terms of the number of cricket matches it has grabbed for the next few years.

Estimates and bid amounts available in the public domain show that ESPN Star Sports is now sitting on nearly 1,400 days of international cricket matches over the next ten years for which it has paid nearly Rs 9,380 crore. In other words, the broadcaster will offer viewers roughly 140 days of cricket every year. And it has acquired each match-day at an average cost of Rs 7 crore, which the industry says is cost-effective.

Most of the these rights fall between 2007 and 2018.


SportsBroadcaster Rights Year of rights Amount Paid (In Rs crore) No. of Days

ESPN ICC 2007-15 4700 700
ESPN Champions League 2008-18 4387 250
ESPN England 2007-12 300 200-plus
ESPN Australia 2007-12 450 200-plus
Sony IPL/NZ 2008-18 4314 750
Nimbus BCCI + Non-ICC 2006-10 2191 171
Ten Sports* West Indies 2008-13 300-400 225
Source: Industry Estimates,*Ten Sports held rights for Pakistan, and Sri Lanka, both of which have to be rexviewed.According to industry estimates, the per-match cost for Nimbus works out to Rs 12.8 crore (2006-2010) since it paid the Board of Control for Cricket in India (BCCI) Rs 2,191 crore for rights to all the international matches to be held in India from 2006 to 2010. Nimbus is offering about 37 days of cricket every year. The broadcaster has also lined up the tours of England and Australia to India.
Sony, which bought the rights for the Indian Premier League's Twenty-20 League for Rs 4,104 crore, is paying Rs 7.4 crore for 10-year rights for IPL matches (2008-2018). It also paid around Rs 200 crore for international matches in New Zealand for 2007 to 2011.
However, the channel will offer about 75 days of cricket annually for its viewers and the average cost per match for Sony is much lower than ESPN at around Rs 5.6 crore. But all the big matches and tournaments have been cornered by ESPN.
The telecast rights held by Ten Sports and Zee Sports for countries like Pakistan, Sri Lanka and others are up for renewal now. However, Ten Sports has the five-year telecast rights for all international cricket played in the West Indies, and sources said its per-match cost works out to less than Rs 2 crore.
A senior media planner handling large auto and banking clients said ESPN will be able to more than recover its acquisition cost if viewers can be attracted to watch cricket consistently over the next three years and these matches deliver ratings of 3-5 per cent.
"If the 10-second spot rates for IPL are any indication of things to come, then sports broadcasters will just need to sell their spots at Rs 3-4 lakh in addition to roping in five or six fixed sponsors," said a senior executive of a Gurgaon-based media buying agency.
"The per-match cost of some of these sports broadcasters is in the region of Rs 8-9 crore, 13-15 per cent higher than ESPN's per-match cost. It will be interesting to see where the advertisers now put their money," an analyst of a leading sports marketing firm said.
Commenting on the cost-benefit analysis of having paid $975 million for Champions League telecast rights for 10 years, RC Venkateish, managing director, ESPN Software India Ltd, said ESPN-Star expected to break even from the first year. “We expect to be able to price our advertising at a 25-30 per cent premium over what advertisers paid for the IPL because the international format will be more popular,” he said.
Venkateish added that since the broadcasting rights are global, the combine expects to generate 50-60 per cent of its advertising revenues from India and the rest from other participating countries.

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