NEW DELHI: Zee Telefilms Ltd, which reported a 10.8 per cent growth in consolidated revenue for the quarter ended 30 June 2004, would be investing about Rs 2 billion in its proposed sports channel in the initial phase.
Speaking to indiantelevision.com yesterday, Zee Telefilms CMD Subhash Chandra said, "Investments are an ongoing process. But we do plan to pump in between Rs 150 crore and Rs 200 crore (Rs 1.5 - Rs 2 billion) initially (in the proposed sports channel)."
This is not the first time that Zee Tele has thrown its hat in the sports broadcasting arena. Some years back, a Zee affiliate, Buddha Films, had attempted to do a marketing tie-up with Indian pubcaster Doordarshan relating to cricket matches.
Asked whether the sports channel would be in collaboration with Turner Broadcasting, a Time Warner group company, Chandra said those aspects would be "looked into now" after having finally acquired the telecast rights for Indian cricket for the next four years.
Chandra believes he has got a good deal "Now that we have got the rights, we'll start the process of setting up the sports channel. There is an offer from Turner, but we'll have to look into some other aspects too before we make any announcements in this regard (relating to a possible joint venture)," said the maverick media baron, who is credited with changing the face of Indian television market by starting the country's first Hindi language entertainment channel, delivered via satellite, over a decade back.
Some time back, Turner Broadcasting Asia-Pacific had written a letter to Chandra, offering collaboration on a sports channel, the details of which are still not available with the media. At present, Turner International India and Zee Telefilms have a 26:74 distribution joint venture called Zee Turner Pvt Ltd.
Wouldn't it be logical for Zee Telefilms to extend the relationship with Turner with the sports channel and, in turn Time Warner, if it wishes to take on other global giants like News Corp (Star's parent company) and Disney (ESPN's owners)? "These are business decisions that have to be taken after considering various other aspects and cannot be disclosed to the media always," Chandra said.
Zee Telefilms has also mandated FCB-Ulka, an advertising agency, to undertake a public opinion poll on a suitable name for the proposed sports channel. "We'd have to see what the agency has to say on the name," Chandra explained when asked what could be a likely name for the sports channel.
Some of the options on the names that are available with Zee include the traditional Zee Sports and the trendy Sportz, may be with an emphasis on the alphabet `Z' to denote its parentage.
According to company sources, a final decision on the name is likely to be taken either later in the day or over the next few days after Chandra returns from Chennai. He had been camping there over the weekend to make forceful presentations to the BCCI, which ultimately swung a split verdict on the issue in the cricket board in Zee's favour early Sunday afternoon.
Chandra also maintained that Zee has managed to get the telecast rights at a good bargain at $ 308 million, plus another Rs 930 million committed for the development of domestic cricket in association with the Board of Control for Cricket in India (BCCI).
"As a businessman, I do calculations. The percentage increase in the number of days of available cricket is 33, while our bid was hiked by about 20 per cent. So, in a way, we have managed to get a product worth Rs 33 at Rs 20," Chandra, who was in a jovial mood, tried to explain the intricacies of bidding and winning.
Experts seem to agree with the Zee Telefilms logic. According to conservative estimates from the Hong Kong-based research agency Media Partners Asia (MPA), Zee's cricket coverage could potentially bring in revenues between $320 and $350 million over a four-year period against total cost estimate between $350 million and $375 million. MPA also estimates that net advertising revenues have the potential of touching approximately $160 million with distribution or subscription revenues at around $140 million, with 80 per cent generated from India.
Short-term losses bit long-term gains? MPA analyst Vivek Couto grandly explains, "Did Subhash (Chandra) and Zee overbid? Who cares? In the Mogul-ish scheme of things when Ted Turner bid for the Atlanta Braves or when Rupert Murdoch outbid Barclay Knapp at NTL to win the English Premier League in 90s, sure the bids were inflated and early losses were sizeable. But long-term returns (both tangible and intangible) were there for the taking too."
Isn't Subhash Chandra also sometimes referred to as the Asian Rupert Murdoch?
