BUSINESS

IPL telecast rights up for sale at Rs 1,000 cr

By Aminah Sheikh in Mumbai
November 26, 2007 09:13 IST
The Board of Control for Cricket in India (BCCI) is expected to issue tender forms for broadcasting rights of the Indian Premier League (IPL) in the coming week. According to industry sources, the winner might have to fork out over Rs 1,000 crore (Rs 10 billion) for a five year telecast rights.

Last weekend, three broadcasters Nimbus Communications, Sony Entertainment Television and ESPN-Star Sports made their presentations to the BCCI. "The presentations basically outlined how best a particular channel intends to leverage on the property, if it won the bid," said a source.

When contacted BCCI vice-president Lalit Modi said, "The BCCI will meet November 26 and then it will be decided as to when the tender document should be made available."

In  2006, Nimbus Communications chief Harish Thawani astounded the broadcasting world by winning  the rights to cricket matches in India for an unheard of $ 612 million – about Rs 2,724 crore (Rs 27.24 billion) at  the prevailing exchange rate – for four years up to 2010.

Zee Sports had acquired the telecast rights for 25 one-day international matches involving India at neutral international venues for five-years, estimated at $200 million (about Rs 800 crore).

However, now the rights are with Nimbus Communications, after Zee accused the BCCI of favouring Nimbus Communications for all matches held in India, over Zee Sports by agreeing to reduce its five-year telecast rights fee by 15 per cent from $612 million to $520 million) following the government's "must-share" sports Bill.

The IPL that was announced to counter Subhash Chandra's Indian Cricket League (ICL) has not only been able to attract corporate interest to buy rights to own a team, broadcasters too are narrowing in on each other. While industry feels that Nimbus Communications will not be able to pull off the bid, the real competition will be between ESPN-Star Sports and Sony.

Broadcasters are not sure yet if the telecast rights will be for a period of five years or ten years. "Ten years is too long a period and channels may not be willing to block money for a ten year period," added a source.

The IPL, which will kick off in April 2008, will host 56 matches in the Twenty20 format and will have international and domestic cricketers playing in eight teams. The tournament based on the soccer event English Premier League, each team will be owned by a corporate.

The company will have to buy team ownership rights from BCCI for around $50 million. This apart, the company will have to deal separately with each cricketer it wants in its team.

The amount the company will pay for a player depends on the company's bargaining power. In turn, the BCCI will offer companies a revenue share from stadium advertising and gate money.

Aminah Sheikh in Mumbai
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