24 November 2017 last updated at 14:36 GMT
 
After failed IPL bid, Sony to focus on international cricket
Thursday 07 September 2017

After losing the rights to its money spinning sports property—the Indian Premier League (IPL)—to Star India Pvt. Ltd, Sony Pictures Networks (SPN) will turn its focus to international cricket and other sports, a senior executive said.

Upcoming cricket series include India’s tour of South Africa, which starts in January. The network will continue to focus on other sports like football, WWE, golf and tennis.

 

On Monday, Star India won television, digital, Indian and global media rights to the IPL for the next five seasons with a consolidated bid of Rs16,347.50 crore, which exceeded the Rs15,819.51 crore sum of the top individual bids across categories.

 

“Nothing changes just because we have lost the bid; we are still focused on cricket, we have five international cricket boards—South Africa, Sri Lanka, Pakistan, West Indies and Zimbabwe—as part of the network. From a sports perspective, our revenue is safe,” said Rohit Gupta, president, network sales and international business, SPN.

SPN, which operates 11 sports channels, including Sony ESPN and Sony Six, made the highest bid for the television rights for India at Rs11,050 crore.

 

“We bid what we believe was the right price,” said Gupta. “We didn’t participate in the global bid for IPL because we didn’t have the bandwidth and distribution network for the international markets; we played to our strengths which was the India television rights piece. For the global bid we would have to be reliant on other partners.”

Sports marketing experts say the South Africa tour could be profitable for the network, but it would bring nowhere close to the Rs1,200 crore in ad revenue the channel made from the last season of IPL.

 

“It really depends on where the games are being played since time zones are crucial here. England and South Africa tend to do well simply because it’s prime time for us. So the South Africa series might bring in stronger revenues for them. However, in terms of revenue, the BCCI matches played by India are a far more lucrative proposition,” said Harish Krishnamachar, founding partner, Sportoid Sports Solutions, which manages sponsorships, player contracts and events.

 

Gupta said Earlier this year, SPN acquired sports network TEN Sports from Zee Entertainment in an all-cash deal worth $385 million, adding seven sports channels to its portfolio. It also rebranded the TEN sports channels to Sony TEN.

 

The company has invested in bringing UFC (Ultimate Fighting Championship, a marquee martial arts championship) to the Indian market and got the exclusive rights to air the National Basketball Association league apart from investing in European football tournaments like La Liga and UEFA competitions, as well as FIFA tournaments.

 

The network expects its sports portfolio to contribute 35-40% of its overall revenue in the next few years in a multi-sport viewership environment.

 

In response to a question, Gupta said over the next five years, Star India will need to generate an estimated Rs12,000 crore from its television rights, Rs3,500 crore from digital rights of the IPL and Rs800 crore from the international rights of the popular T20 tournament to break even in its ambitious bet.

 

“We know from past experience that every election year the advertising spends by brands on IPL get compromised by spends on news channels. A lot of the ad spends will also depend on the macro-economic situation in the country. We have seen big corporates like Coke, Pepsi, Airtel stay away from IPL. While new categories like e-commerce and smartphone manufacturers have tried to bridge that gap, there is a saturation in these categories as well,” added Gupta.

 

Star India declined to disclose further details on the break up of the global bid.

 

Star India has won the rights from IPL across television, digital, Indian and global from 2018 to 2022. The next Lok Sabha election will be held in 2019.

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