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Cricket has no losers in 2009

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MUMBAI: The Indian Premier League (IPL) emerged as a clear winner in 2009, but fortunately for sports broadcasters cricket had no losers. The three formats – Twenty20, ODIs and Tests – continued to have their relevance, particularly when the game engaged India.

In a year hit by severe slowdown, sports broadcasters posted growth and raked in an advertising revenue of Rs 11 billion. The heavy load of sporting events in 2010, including T20 World Cup, the soccer World Cup and the Commonwealth Games, holds out more hope for sports broadcasters in India.

Multi Screen Media (formerly Sony Entertainment Television) collected close to Rs 4.5 billion from the IPL telecast, setting the ball rolling for the tourney to emerge bigger. The company is already targeting an advertising revenue of Rs 7 billion this year, an almost 50 per cent jump from the second edition of the IPL.

The IPL saga, in tune with the BCCI‘s (Board of Control for Cricket in India) propensity to extract the maximum value from its properties, had many twists and turns during the course of the year. MSM had to get back the broadcast rights from the cricket board after settling to pay more. The deal, running through till 2017, was signed for $1.6 billion and includes World Sport Group‘s global and other media rights.

The IPL also had to seek temporary shelter in South Africa as the tournament window coincided with the general elections in India. Though this involved more costs, the brand got an international exposure. TV ratings stayed high with Max, the telecasting channel, enjoying a TVR of 4.2 from the event.

Says Lintas Media Group Planning Sciences director Atrayuee Chakraborthy, "IPL2 in the first 20 days had captured a significant 82 million viewers as compared to 85 million in the year-ago period. TVRs had dropped because of reduced time spent as quite a few matches were scheduled on weekdays and in off-prime time. But, as per our estimates, a significant 26 per cent watched IPL2 matches out of home, which can‘t get reflected in TV household panel ratings of Tam."

The IPL will get more exposure in 2010 with Dubai-based Dar Capital picking up the theatrical rights. The third edition of the tournament will be screened in cinema theatres across the country.

While the IPL has done well, the Twenty20 format does not always work. A case in point is the Champions Twenty20 League. ESPN Star Sports, which had paid $975 million for the rights, would not be happy with the ratings that the first edition got. Luckily for ESS, the Twenty20 World Cup did better with a rating of 3 although India exited early. Even the Champions Trophy did not do too badly with a rating of 1.6.

Essel Group‘s Indian Cricket League (ICL), IPL’s poor rival, disappeared from the act. In 2009, the ICC denied the ICL official recognition. The ICC said the Board went through the application carefully, including assessing it against the criteria within the ICC regulations for approving such events. It also maintained that the event did not meet its criteria for approving as ‘unofficial cricket’.

The BCCI, which had been waiting all along for this decision, then allowed ICL players back into its fold if they severed ties with the rebel league. Several months later, ICL responded by sending a legal notice to the ICC, BCCI and the English Cricket Board. If the ICC is toeing the BCCI‘s line, then one cannot put too much blame on them as over 80 per cent of the game‘s revenue comes from India. Financial reasons were behind the English Cricket Board’s decision to scrap plans for P20. Australia, New Zealand and South Africa are, however, looking at a joint league from 2011.

Meanwhile the ODI and Test Cricket formats are holding their ground, at least when it comes to bilateral series featuring India.

As far as television rights are concerned, Nimbus protected its turf by renewing its deal with the BCCI for another four years. The new deal is said to be worth Rs 20 billion but the rights do not include mobile and the Internet. The broadcaster also has to submit a bond by January 2010.

ESS, meanwhile, renewed its rights for the English Premier League. Also, Ten Sports extended its deal for the Uefa Champions League for three more years.



New channel launches

On the back of the IPL, MSM is planning to launch a sports channel. With major cricket properties being locked up for the long term, it remains to be seen how MSM can build a channel with the IPL and New Zealand cricket rights.

The sports broadcasting genre could get at least a couple of new entrants in 2010. ESPN Star Sports is waiting for permission to launch a sports news channel. Taj Television, meanwhile, has sought permission for three more channels including a Golf channel.

Overdose of cricket can have negative impact

Cricket’s organising bodies like the BCCI will have to decide on how much cricket is healthy and where to draw the line. An overdose can kill the golden goose.

Advertisers are preferring bilateral rather than tri-series as the ratings are more consistent in such tournaments. Says Chakraborthy, "Test cricket is still effective in building brand saliency among the hard core cricket fans. However, the Twenty20 format allows you to target a far wider audience including the family. As the IPL gets bigger, it will suck out more money from sports advertising. Companies who spend the most on cricket come on the IPL. So while the number of categories that invest in cricket has grown over the past couple of years, other tournaments could find it hard to get in similar big outlays from other companies who do not spend as much on cricket."

A case in point is what happened with the BCCI team sponsorship rights. The board was forced to extend its deal with Sahara for another six months after the tender that it floated failed to get a single bid. The BCCI was looking at a price of Rs 30 million per match while Sahara is currently shelling out Rs 20 million a match.

Some analysts say that the board went overboard in the price it was asking for. But with so much cricket happening, sponsors‘ budgets are getting cleaned out quickly and there is small space to make substantial investments in other properties.

So what are the challenges that the bat-and-ball game faces in its aim to get in more ad revenues? Chakraborthy says that simple FCT consumption and logo exposures in cricket may not help in the long run. "Brand message integration and audience engagement are the other aspects that the game needs to crack to garner ad revenue as they move forward," she adds.

And what about other sports? The biggest beneficiary seems to be soccer as the appeal is spreading beyond just Goa, Kerala and West Bengal. Viewership of this sport in the metros is on the rise and it is becoming an effective medium to reach the upper class male particularly for events like the English Premier League and the Uefa Champions League. However sports like tennis and Golf are still niche in nature.

The Piracy Menace

Another issue that is concerning stakeholders is that of piracy. The BCCI, along with the other boards, has set up a consortium to fight against it. The areas that need to be addressed are trade mark infringement, Internet piracy and footage violation.

Sports broadcasters, in particular, have a grouse against news channels who they feel repackage footage beyond what should be allowed. The cricket boards are also looking to work with the Sports Rights Owners Coalition (SROC) to form a legal framework for the different boards.

2010 will see the unveiling of cricket‘s next six-year plan of fixtures, crucial to the survival of formats like Test cricket.

 

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