MUMBAI: With Sony Pictures Network India (SPNI), official broadcaster of the Indian Premier League, having submitted a letter expressing interest in bidding again, the battle for determining the network that will host world cricket's biggest television property for the next cycle has well and truly been joined.
What is out in the public domain is that the BCCI has given SPNI 60 days to submit a new offer. The advantages SPNI has in retaining what has proved to be its Golden Goose from Day 1, is that as per its existing contract, Sony not only has the right of first refusal, but also has the right to match any higher counter-offer that might be made during the course of the bidding.
The ground rules therefore are well laid out. Now what is of material interest are only two matters. The contenders for the rights and the price points that are in play.
The Contenders
And they are not just usual suspects SPNI and Star India. There is the Discovery-owned Eurosport, which is being steered by old India hand Peter Hutton (he was part of the leadership team that launched Ten Sports and also headed it before moving on).
Discovery's intent to have a sports play in India was confirmed recently by Arthur Bastings, president and managing director, Discovery Networks Asia-Pacific. He has been on record as stating: "India is a top-priority market for us. It is an investment destination. I see enormous potential in terms of growth in the existing products we have.
"Infotainment, however, is not something we will be exclusively focusing our attention on in India. We will broaden our horizons and look at areas such as general entertainment, sports, regional entertainment etc. I expect to be doing more things in India from an inorganic point of view, going forward."
And there is a fourth player as well SportzPower has been told. Qatar's AL Jazeera owned beIN SPORTS (finances) in partnership with the Harish Thawani-controlled Neo Sports Broadcast (market understanding). What SportzPower knows for a fact is that beIN SPORTS will not enter any market unless it has a big bang property under its umbrella and it doesn't get bigger than IPL as far as India is concerned.
What is worth noting here is that this will be beIN SPORTS' second attempt at acquiring a big ticket cricket property. In October 2014, Thawani had partnered beIN in bidding for the ICC rights which was ultimately retained by Star. What is not so widely known in these ICC rights bidding is that it was the beIN-Neo tag team that had put in the second highest bid price after Star.
The Price
Taking the Rs82 billion that Sony committed over nine years for trhe IPL rights as the reference point, what BCCI expects as a "base price offer" from Sony is a doubling of value. The math that works out here is that Rs18.222 billion is the per year minimum payout the Indian cricket board would expect.
“MSM has a right to refusal and it also has the right to match the offer. Over the next 60 days, the company will come up with a new offer. We are expecting the amount to be double of what it was in the last contract. We have conducted our own market research and if we are not convinced with the offer made by Sony, we will call for a fresh tender. And if any company bids higher than what Sony offers, then they will either have to match that price or the board will offer the new contract to the highest bidder,” a top BCCI official told Indian Express recently.
Since BCCI officials have indicated that the rights tenure for this cycle will be for five years, Rs91.111 billion would be BCCI's "base expectation" for these rights. How much above this figure could the bidding go is the multi-billion rupee question. Seen fromSportzPower's perch however, we do not see any crazy bidding that comes with the "loss leader" justification tag coming into play here. If it does, we would be both surprised and disappointed. Because anything that is economically unjustifiable is bad for business. And by extension, the industry.
SPNI has broadcast the IPL on its network channels since the inception of the league in 2008. In 2009, SPNI — then known as Multi Screen Media — had bought the broadcasting rights for $1.6 billion (the deal had dollar exchange rate fixed at Rs40-odd so real rights value remained Rs82 billion) for the following nine editions.