SPORTS BROAD­CAST­ERS TO MAKE MOST OF THEIR VIC­TORY

Mint ST - - CORPORATE - OR­DI­NARY POST SHUCHI BANSAL mint

broad­cast in­dus­try to pri­vate firms, the value of me­dia rights of sports prop­er­ties has been ris­ing. Clearly then, the value of a sports event is de­ter­mined by mar­ket forces and is a func­tion of the pop­u­lar­ity of the game and the en­ti­ties com­pet­ing for it. For in­stance, glob­ally, rights to sports such as foot­ball in the UK, rugby in Aus­tralia, cricket in In­dia, Amer­i­can foot­ball, bas­ket­ball and base­ball in the US are ex­pen­sive. These rights are cycli­cal in na­ture and are granted by sport­ing or­ga­ni­za­tions for a fi­nite pe­riod, be­tween 3 and 10 years, to a broad­caster that pays the high­est value for them.

In­ter­est­ingly, in In­dia, events of “na­tional im­por­tance” are no­ti­fied by the in­for­ma­tion and broad­cast­ing min­istry. Any event that the min­istry deems fit is con­sid­ered to be of na­tional im­por­tance and the list in­cludes var­i­ous crick­et­ing events, ten­nis, hockey, and foot­ball matches as well as the Olympics and Com­mon­wealth Games, among oth­ers.

While Prasar Bharati has had a great run till now, ben­e­fit­ing from the manda­tory shar­ing of these events, it’s now the turn of the pri­vate sports broad­cast­ers to make the most of the de­vel­op­ment. The re­cent judge­ment will bump up rev­enue and profit for sports broad­cast­ers. It gives a huge fil­lip to Sony and Star—the two broad­cast­ers which cur­rently en­joy rights to im­por­tant sport­ing prop­er­ties. The two me­dia or­ga­ni­za­tions will get a bet­ter value for their money. They will be able to mon­e­tize their prop­er­ties bet­ter as both their sub­scrip­tion and ad­ver­tis­ing rev­enue will go up. How­ever, there are some con­cerns raised by dis­tri­bu­tion net­works (ca­ble and DTH) which feel that they will lose their ne­go­ti­at­ing power with the broad­cast­ers who may end up be­ing a little high-handed since they will have a mo­nop­oly over sports events in ca­ble and DTH homes un­like ear­lier when the matches were avail­able on DD as well.

To be sure, though, the sports broad­cast­ers may not be able to in­crease the chan­nel prices im­me­di­ately as cur­rently the prices of TV chan­nels in­clud­ing the sports chan­nels in In­dia are reg­u­lated by the Tele­com Reg­u­la­tory Author­ity of In­dia (Trai) and the max­i­mum re­tail prices of TV chan­nels in­clud­ing sports chan­nels is capped at Rs19 per sub­scriber per month.

But Star has chal­lenged the author­ity and ju­ris­dic­tion of Trai to fix the price of TV chan­nels and the mat­ter is pend­ing in the Madras high court. If the court quashes the pric­ing reg­u­la­tions, the story of sports chan­nels in In­dia could change.

For now, the judge­ment pro­tects the rights of the broad­cast­ers and the con­sumers. Broad­cast­ers who pay big sums to buy ex­clu­sive sports con­tent are pro­tected as they are in a much bet­ter po­si­tion to re­cover their money. And con­sumers who don’t have ac­cess to pay TV can en­joy this con­tent on Free Dish or DD’S ter­res­trial net­work. It’s a win-win for all.

Shuchi Bansal is Mint’s me­dia, mar­ket­ing and ad­ver­tis­ing edi­tor. Or­di­nary Post will look at press­ing issues re­lated to all three. Or just fun stuff.

COL­UMN

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