The sports broadcast business in 2004 will be remembered for one dominant issue. The great Indian cricket rights trick. As in it had many a twist in the tale but no denouement. The story, which is still being played out even as we move into 2005, could well give the Balaji soap factory a run for its money.

And money is what the private broadcasters stand to lose big time if some clarity is not brought to bear, and soon, on the confounded confusion that is sports broadcast today.

To share or not to share? That is the question

THE major issue that cropped up in 2004 (in implication terms if not media noise), and which will probably persist in 2005, is this whole business of sharing of telecast rights with national broadcaster Doordarshan when it comes to India cricket.

Today, the reality is that in the telecast rights domain a huge question mark hangs over any tourney that features the Indian cricket team (or should one say the BCCI squad as the Indian cricket board is arguing in the Supreme Court). And if truth be told, it makes no difference whether a series involves a traditional cricket power like Australia on the opposing side or one from Timbaktoo. As long as the Indian team is playing, the tag of "event of national import" can be applied. To understand what's at stake a recap is in order.

The beginning of the year and the end of the year saw two such "events of national importance". It was in March that India embarked on a landmark and historic tour of Pakistan for which Dubai-based broadcaster Ten Sports held the exclusive telecast rights. Ten Sports was placed under an enormous amount of pressure from the government to share the terrestrial feed with DD.

The government's contention was that for an event like this, which was of such national importance, the Bukhatir owned broadcaster should rise above commercial considerations. And one valid point that the government did have in its favour was that had it not put its weight behind the series, there would have been no tour in the first place.

What was not a valid extension of that reasoning however, was the stand that DD took wherein it asserted public service broadcasting credentials in refusing to pay for terrestrial rights and also tried to make a fast buck via ad sales. When Ten agreed to give its feed for the first ODI following a Supreme Court directive, DD was quick on the draw in selling airtime and inserting its own ads into the private sports broadcaster's feed.

That is not to say that Ten had only a hard luck tale to tell. The fact that it reportedly made Rs 1.15 billion in ad sales from the historic series speaks for itself.

If at the start of the year it was Ten Sports that was complaining over being hard done by, at the end of the year it was rival ESPN Star Sports that was in moan mode.

This time it was India's visit to Bangladesh, a tour involving the lousiest Test team in world cricket, that was deemed as being of national importance (a PIL filed by an "aggrieved" party in the southern state of Kerala argued as much). And in a ruling on similar lines to one made earlier in the year by the Supreme Court in the Ten Sports Vs DD case, the Kerala High Court directed ESS to share its feed with the national broadcaster. It in fact went further and ruled that ESS should share revenues with DD in the ratio of 80:20.

Just how farcical the whole issue has become can be gauged from the fact that DD actually made a submission before the high court that a "fair" deal would comprise Rs 10 million in minimum guarantee per one-dayer (to be paid by ESS to DD) after which a 80:20 advertising revenue share, in favour of ESS, looked okay.

India Rights: Chandra versus Dalmiya

Purely in terms of media noise, however, it was the controversial manner in which the BCCI's auctioned the India rights that hogged the headlines.

Their is a whole lot of grist for the rumour mills as to what was going on behind the scenes in this regard, but what is of material import is the end result of all the shenanigans.

As we enter 2005 and with Pakistan's return visit under three months away, no one can say for certain just who will get what is really the "crown jewel" of the whole four-year India rights offering.

What is certain though is the BCCI has kissed goodbye to even the $ 260 million that was the highest bid that Subhash Chandra's Zee Telefilms had put in when the tenders were first opened. As for the $ 308 million that was Zee's final offer matching ESPN Star's increased bid, there was a question mark over it in any case, with a high possibility of litigation over the extra $ 48 million.

As for Zee, whether it will be able to welcome a new sports channel when the Pakistanis land in India is in the hands of the Supreme Court to decide on. Till then, all it has to show (or is willing to show at the moment) as regards its sports broadcast ambitions is the Zee Sports logo.

In all this, there were two parties (three in fact) however, that had a hearty laugh at the whole mess. Pubcaster Doordarshan ended up broadcasting the Australia and South Africa Series for a pittance after the BCCI reached a compromise with it. Last heard, the BCCI has already approached DD to bid for the Pakistan tour. The other party that gained in a big way was Ten Sports which had earlier bid a paltry $ 115 million for the rights. Ten's parent Taj Television did the production for the BCCI. Ten also strengthened its grip outside India by broadcasting the India-Australia series in Pakistan, Sri Lanka, Bangladesh, the Middle East, Europe and South East Asia. The remaining international territories were with Sony Entertainment. The end result therefore, was that the two highest bidders were left gnashing their teeth while the other three walked off with the spoils by default.

The irony in all this is that even as Dalmiya looks back on the windfall that ultimately never was, there are many who believe that the whole mess is a fallout of the clash of egos between two men used to having their way --- the BCCI supremo himself and the Zee Group CMD.

ESS still not given up on India Rights

If the Supreme Court orders the BCCI to go in for a rebid, expect ESPN Star Sports to chase the Indian Pakistan series aggressively. There are two reasons. Firstly it is already starting to face difficulties on the distribution front.

The other reason is that if Zee does get the rights, then a third player will get introduced into the sports broadcast equation. If that happens, then one can expect the cost of sports properties to shoot up even further. Speaking to Indiantelevision.com recently ESS Asia MD Rik Dovey said as much when he said, "I see the cost of sports rights continuing to spiral out of control. This is largely due to newcomers coming into the market and not really understanding the values within the business."

Uncertainty deals distribution revenues hard blow

2004 has been a tough year for both Ten Sports and ESPN Star Sports on the distribution front. Even with India-Pakistan cricket on its menu, Ten was unable to ramp up its distribution numbers beyond 2 million nationwide, industry sources say. And the situation post-June has been even worse with collections at a virtual standstill, the sources aver.

Ten would be hoping that 2005 sees a more settled picture. That, however, dependent in large measure on how soon it will be able to sew up its distribution distribution strategy which has been in virtual limbo post the parting of ways with Modi Entertainment (which happened after the Pakistan tour). As things stand there are three possible platforms that Ten may hop aboard --- Zee-Turner, SET-Discovery or ESPN Star Sports. If none of these work out, there is the option of going it alone.

It is on the advertising front that Ten is in far better shape. It holds the rights for cricket coming out of Sri Lanka, Pakistan, the West Indies, Sharjah and Morocco. All these are long term. It has the WWE which is allowing it to deliver far higher GRPs than ESS. This year Ten also strengthened its football line up by acquiring the rights for among others Brazilian, Argentinian, Italian, German and Portugese football.

And what of ESS? Well, since the beginning of last year, there has been a steady erosion of subscriber base from 6.5 million then to under 4.5 million today.

ESS is however, not letting the uncertainties of the India cricket rights prevent its moving ahead on other fronts.

The biggest and most laudable effort, which could well yield long-term benefits, is its bid to infuse fresh life into India's moribund hockey league. The Premier Hockey League initiative (PHL) for which it signed a 10-year telecast deal with the Indian Hockey Federation (IHF) is about to kick off. The broadcaster is also looking at tennis in a big way. It recently renewed deals for the Australian Open and Wimbledon Tennis. As far as football is concerned it renewed its agreement for EPL and also signed a deal with the Asian Football Confederation. Its rights to Formula One are also a solid ad sales revenue earner.

On the marketing front one major initiative from ESS was its efforts at increasing the level of interactivity. To give an example during the Asia Cup in July it did a mobile tie up. Subscribers of Airtel, Orange/ Hutch, Tata Indicom and Idea Cellular could call a unique number and express their views on the tournament. ESS also came out with innovations to connect the advertiser more closely with the viewers. For example there was the huddle of the Indian team during which viewers could see the Pepsi graphic.

The interactivity also extended to soccer. ESS tied up with Nokia for the show Goals. Through the pan Asian initiative viewers could vote for their favourite goal, save or player shown during the programme.

However the initiative that took sports marketing in India to the next level was what ESS did in May to get viewers into the Euro spirit. The broadcaster painted the metros and the trams of Kolkata with Euro images, posters, movie halls etc. Euro 2004 was positioned as 'The biggest soccer battle'. The result was that even without including the finals, the matches reached a cumulative audience of 182 million. By comparison Euro 2000 had a cumulative audience of only 27.8 million. What also helped ESS penetrate the Hindi heartland was the fact that it introduced dual feeds in English and Hindi for key tournaments like Euro and Asia Cup. This year ESS Asia announced that it had managed a 25 per cent year on year increase in advertising revenues across the network from 1999. It attributed the achievement to the four O's strategy which combine on air, off air, on ground and online benefits.

DD failed to market and sell Olympics

All this is not to say that one needs to do tons of marketing to get the ratings. The bigger the event the less the effort required. Former Max business head Rajat Jain admitted as much in an interview when he referred to Ten's lack of marketing for the India Pakistan series other than the print medium. Despite that the broadcaster got excellent ratings.

But a clear case of how lack of marketing and mundane promotional activities killed a potential killer application was the national broadcaster Doordarshan as regards The Olympics.

Some facts first: When the biggest sporting spectacle aired in August DD Sports was able to more than triple its reach compared to the Sydney games in 2000. Tam data c&s 4+ showed that across the six metros the pubcaster was able to reach 18.8 million homes. In 2000, the figure stood at 5.6 million.

No wonder Mudra's Amit Ray which handles media planning for Reliance gushed, "Not only did we get huge visibility in non c&s homes, the average rating of Olympics were higher than tennis (both Wimbledon & US Open) even in C&S homes. Going by the above facts it proved beneficial to be on Olympics.

"While on cricket though the popularity is beyond question we must not forget that though the 10 second price of a normal match has reached the sky it's only one match - India vs. Pakistan which justifies that. But unfortunately people are so blinded that a similar price is being paid for matches involving teams like Bangladesh & Kenya in the disguise of a tournament!"

One can understand why Ray would be pleased. If you get the kind of numbers that the Olympics delivered at a bargain basement price who wouldn't be thrilled. That well sums up the story of the Olympics as far as DD's sell strategy was concerned.

Even though DD paid a pittance (relative to the rest of the world) in acquisition costs of Rs 240 million for the Olympics, it netted just Rs 80 million from the games. That's a Rs 120 million loss for an event that is universally acknowledged as the greatest sporting spectacle on the planet.

As far as other sports news was concerned sports marketing firm Total Sports Asia launched in India in September. It is the WWE's Asian representative in terms of television rights and merchandise sale. It also organises events on behalf of the WWE. One could see the WWE come down to India next year.

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There are some lessons the government needs to take from all this. While it is all very well to continue hand holding DD on the issue of sports telecast rights, there has to be a line drawn somewhere as to what constitutes "must provide" to the state broadcaster.

It is for the government to spell out clearly the terms under which rights issues are to be dealt with. Sports broadcast is a high investment business the world over. If broadcasters are not given guarantees that protect their investments then its a dead loss proposition. And ultimately it will be Indian sport that is the loser.

A case in point is the Premier Hockey League (PHL) initiative. It took three years of detailing and ground work to get the whole thing going and is a long term investment that has very little scope for returns any time soon. But it is initiatives like this that can infuse life into Indian sport. For that to happen it is Big Daddy cricket that will perforce have to bankroll such efforts.

And that will not happen if even tours like the one that India just concluded in Bangladesh are brought into the "of national importance ambit".

The only way out of what is at present a dead end game is to use the formula that is employed vis-a-vis the ICC Cricket World Cup. This would mean that DD is guaranteed terrestrial rights for all India cricket. But only if it pays a competitive price for it. That price could be determined by the broadcast regulator if negotiations fail to throw up a reasonable resolution.

Secondly ALL cricket outside the country should be made offlimits for DD. Unless it is willing to enter into competitive bidding with private broadcasters for the rights that is. That would of course mean that DD would have to work towards getting returns on investments made.

We return to the point about DD making a Rs 120 million loss (after paying just just Rs 240 million) out of an event as big as the Olympics. When you consider that this is an event that runs for over a month, it becomes even more incomprehensible.