International Cricket Council (ICC) on Tuesday began meetings with broadcasters
and agencies in Dubai, marking the latest stage of its sale of media and sponsorship
rights for ICC events from late 2007 to 2015.
ICC's team of negotiators include former President Ehsan Mani, who played a key
role in securing the current agreement with the News Corp owned Global Cricket
Corporation (GCC) through News International Limited.
which began in 2000 and ends with the ICC Cricket World Cup 2007 in the West Indies
next March and April, includes two ICC Cricket World Cups and three ICC Champions
Trophy tournaments. The GCC had paid out $550 million to secure the rights after
a fierce bidding war with Subhash Chandra's Zee Telefilms. At the time of bidding
the GCC was a 50:50 JV between News Corp and World Sport Nimbus (itself a 50:50
JV between Harish Thawani's Nimbus and the UK-headquartered World Sport Group).
News Corp subsequently bought out WSN's stake in the JV.
first question that comes to mind of course is what are the numbers that will
be thrown up in this round of bidding? Before doing that, it is worth examining
how much more in terms of events are available for purchase. The number of World
Cups (two) remain the same. The "Extraa Innings" are a possible one
Champions Trophy (there were three in the previous package while this one has
at least three and maybe four tourneys), two 20/20 World Championships and two
Women's Cricket World Cups in 2009 (Australia) and 2013 (India).
there are also the Cricket World Cup qualifiers and four ICC U/19 Cricket World
Cups included in the eight-year timeframe.
told, there are a total of 18 ICC tournaments, the big ones being the two World
Cups, in Asia (2011) and Australia / New Zealand (2015) respectively, and a minimum
of three (possibly four) Champions Trophy tournaments.
is as far as the events themselves are concerned. On
the revenue front, there will be a huge difference on
the subscription side because of direct-to-home (DTH)
and the rollout of conditional access system (CAS),
as well as increasing broadband penetration.
had factored in some inflows from DTH when it made its
bid for the current property, but the delay in the launch
of DTH services put paid to that. For Sony, income from
its ICC properties has been advertisement-led (to the
tune of 65-75 per cent) rather than subscription driven.
would be safe to assume that this would get directly
reversed in terms of revenue break-up between advertising
and subscriptions by the time the next World Cup comes
around in 2011. Subscription revenue will come in principally
from digital cable (all cable-penetrated areas should
be CAS-delivered by then) and DTH. Broadband will also
offer significant revenue opportunities by then.
coming to the bidding. Even if the number of events were the same, and looking
at the valuations that would have been obtained back in 2000, this would have
been a higher value proposition because one of them is being held in India and
the other has a clear time zone advantage for Indians (Australia / New Zealand
as opposed to 2007's edition in the West Indies). So if we were to look at a like
to like comparison, the base value in 2000 would have at the very least been the
$ 650 million that Zee had bid then for the same rights.
value of this property is essentially linked to what is the bid that the India
part of it was worth. Sony paid $ 208 million for the C&S rights and the terrestrial
rights that national broadcaster Doordarshan took would be another $ 47 million
tallying up to $ 255 million. To find the base value of the India part of the
rights using the above formula would imply a 25 per cent mark up or $ 320 million
as being what they were worth then.
are the toppings to that? One Champions Trophy (if four are held) and two 20/20
events. Let's say $ 400 million is what this would have been worth to Sony in
2000. Today we believe it will go for around $ 1.2 billion. Assuming that the
India part will take up around 70 per cent of the total value of the ICC rights,
we're looking at bidding anywhere between $ 1.7 to $ 2 billion as being the range
in which the punts will be made.
has that kind of money? Star, Sony, Zee and maybe Anil Ambani's ADAG if it decides
to throw its hat in the ring. One player that is almost certain not to be in this
particular game is Harish Thawani's Nimbus. He has been taken out of the equation
by the News Corp distribution deal. So could it end up being a fight between Sony-Ten
Sports, News Corp-Nimbus and Zee Sports if Reliance doesn't enter the fray? Quite
if we were the betting sort our gut punt would be on
Sony again walking away with this one. It is the more
hungry and needs it more than News Corp. And being the
incumbent will give it a clear advantage over an at
least as hungry Zee.