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  • ESPN, Star JV waiting to end

    Submitted by ITV Production on May 05
    indiantelevision.com Team

    MUMBAI: Rupert Murdoch-controlled News Corp and The Walt Disney Company are deciding on how to end their 16-year-old sports broadcasting joint venture in India.

    The stumbling block in a final settlement is that both Star and ESPN want to buy out their partner?s stake. Both realise that the JV has outlived its time and can?t serve the individual commercial interests of either Star or ESPN in a market where News Corp and Disney have made massive investments and are at different growth cycles.

    Star Group has offered to buy out ESPN?s stake in the equal joint venture so that it gets independent control to expand its sports broadcasting business in India at a time when acquisition costs have climbed to astronomical heights. Star?s ability to take risks and aggressively mop up cricket rights would be higher as it can leverage the sports property with its highly popular entertainment channels in India.

    "Star is very keen on buying out ESPN?s 50 per cent stake in India. The JV is under severe strain and the individual business interests of the two companies can no longer be served by it," a source familiar with the development said.

    Star TV, for example, scooped up media rights to international cricket played in India from the BCCI for a whopping Rs 38.51 billion from 2012 through to 2018. The JV was not agreeable to bid so high as it has other cricketing properties where it has bet big like the ICC ($1.1 billion for eight years from 2007-15) and the Champions League Twenty20 ($975 million for 10 years) to ensure that it stays as the top sports broadcasting network in India.

    "Star was ready to pay so high as it served its business interests. It wanted to deny Sony (which bid Rs 37 billion) the rights as, along with the IPL, it would have become a formidable network. The entertainment channels have already started delivering for Sony. Star could bid that amount because of its overall India strategy," the source said.

    The problem is that neither Star nor Disney want to sell out. ESPN has also expressed interest to buy out Star?s stake in India, the source said.

    "It could have been easier if it would have been any other multinational media company like Turner International. Disney has also made huge investments in the Indian market. It has bought out UTV Software Communications and has delisted it. It has got an aggressive person in Ronnie Screwvala to head its India operations. While having a presence in kids, niche entertainment channels and movies, it is missing in the Hindi GEC (general entertainment channel) space which is massive in India. It also wants to have full control of sports broadcasting," the source added.

    For any partner to sell the India business would mean that it would be locked out of sports for a few years due to a non-compete clause.

    "Neither Disney nor Star want to be out of this lucrative business for a few years as there would be a non-compete clause. Besides, there are few cricket rights available and they are all locked long term," the source said.

    Cricket is the only sporting property that people watch at a mass level with passion across the country. It has got both advertising and pay revenue pull. In 2011, sports broadcasters raked in advertising revenue of Rs 20 billion, led by the IPL that took home Rs 9 billion.

    Digitisation also throws open a wide pay revenue potential, unlocking leakages from the last mile of the cable networks that is controlled by local cable operators who under-report their subscriber base. The government has fixed 30 June as the deadline for cable TV digitisation in the four metros of Delhi, Mumbai, Kolkata and Chennai. India needs to make the complete switchover from analogue to digital by 31 December 2014.

    The complexity of the issue is obvious as the web of the JV spreads across Asia. The talks for a split started a year back and even discussed about the possibility of News Corp letting go rest of Asia to ESPN. "FIC (Fox International Channels) runs a business worth over $1 billion in rest of Asia and does not want to let go of sports. That is not possible," the source said.

    Splitting the properties that the JV holds is also not feasible. "The only way they can terminate the joint venture is by somebody selling out. This will also make the task of valuing the assets easier," the source said.

    Star holds an upper hand at this stage as it has got the BCCI rights. It has sub-licensed the rights to ESPN Software India, the joint venture company which runs ESPN Star Sports? India operations. "The weight of the Rs 38.51 billion property is hanging overhead. The JV will be given the task of monetising it so long as the partnership lasts," the source said.

    The BCCI property also leaves Star with another option to explore. In the worst case scenario if it decides to sell out to ESPN, it can build a sports broadcasting business with the BCCI rights as the starting pillar, much like Sony did with the Indian Premier League (IPL) or Nimbus did with BCCI (though Neo couldn?t hold on and had to forego the BCCI rights).

    "Star would ideally like to buy out ESPN?s stake in the JV to get full control of India before the first series (from the BCCI rights) kicks off between India and New Zealand in August," a media observer said.

    Disney may decide to first focus on consolidating its UTV investments and building the Hindi GEC vertical as well before it goes all out on sports. At least that is what Star would like Disney to do.

    The cricketing rights are spread among the four broadcasting companies. The ESPN-Star JV has rights to ICC, Champions League Twenty20, England and Australia cricket boards. Ten Sports, owned by Zee Group, has rights to the five boards - Pakistan, Sri Lanka, West Indies, South Africa and Zimbabwe. It recently renewed Cricket South Africa (CSA) rights for $180 million and Zimbabwe for $20 million (both for eight years). Sony has New Zealand and IPL while Neo has Bangladesh.

    India may not be the only market where News Corp will be wrestling against ESPN. Media reports indicate that News Corp will be launching a national sports network on cable television to take on ESPN in the US. News Corp has snapped up various sports rights, prominent among them being the US TV rights to Fifa World Cup in 2018 and 2022, beating ESPN in the race. It has also secured rights to the Pac-12 Conference and Big-12 Conference games and is in the running to secure an exclusive deal with Los Angeles Dodgers.

    "ESPN Star Sports will telecast the New Zealand series. Star will sub-license the BCCI rights to the JV as long as the divorce does not take place," the source said.

    Image
    Rupert Murdoch
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  • Life OK?s new fiction show to expose reality of reality TV

    Submitted by ITV Production on Apr 18
    indiantelevision.com Team

    MUMBAI: Life OK, the Hindi general entertainment channel from Star India stable, is launching a new fiction ?Aasman Se Aagey? on 23 April.

    The show will air every Monday to Friday at 10.30 pm.

    The show is an effort to lift the veil of glamour of talent shows and to reveal the cut throat competition in the reality TV world. It will show the pressure and the hastened mental metamorphosis of contestants from toddlers to adolescents to adults, the channel said.

    Life OK GM Ajit Thakur said, "Aasmaan Se Aagey gives you a front row seat to the behind-the-curtains world of talent shows to see and determine for yourselves what?s important in life, fame or dignity? Nothing could?ve come closer to conveying our philosophy than this show. It?ll for sure leave you contemplating about the good things that surround in life without our having to look for it: for example, our family."

    Aasmaan Se Aagey brings forth the ?reality of reality show? through the journey of a young girl, Meenaxi. A dancer by profession she dreams big and comes to Mumbai to participate in a reality show.

    Image
    Life OK
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