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BCCI broadcaster begins push for revenue squeeze

As a special bench of the Supreme Court began hearing BCCI’s response to the Lodha committee recommendations on Thursday, its official broadcaster, Star India, has begun mounting pressure on Board to renegotiate its contract.

sports Updated: Mar 04, 2016 12:11 IST
Jasvinder Sidhu
BCCI

The BCCI is arguing that the panel’s ruling that no advertisements should be allowed during the game will make the deal far less remunerative for its broadcasters and will cause a big impact in its revenue.(PTI Photo)

As a special bench of the Supreme Court began hearing BCCI’s response to the Lodha committee recommendations on Thursday, its official broadcaster, Star India, has begun mounting pressure on Board to renegotiate its contract.

The BCCI is arguing that the panel’s ruling that no advertisements should be allowed during the game will make the deal far less remunerative for its broadcasters and will cause a big impact in its revenue.

“In a nutshell, two issues highlighted (domestic advertisement and syndication revenue) together with the existing challenge around subscription revenue stream would have a significant impact on the value of BCCI media rights, reducing it to negligible value compared to the current `43 crore per match,” Nitin Kukreja, authorised representative, Star India, wrote to BCCI president, Shashank Manohar, on February 21.

The e-mail adds: “Needless to say, if sought to be implemented, we would have to revisit our agreement to accommodate for all the factors mentions above and we would urge you to start early negotiation with Star.”

BCCI’s current broadcasting rights contract for international and domestic matches with Star for 2012-2018 is `3851 crore.

The Lodha committee recommendations restrict ad breaks to drinks, lunch and tea intervals, as is the practice internationally.

“It may be relevant to mention that during these breaks, the viewers also turn off their TV sets to attend to their chores. Thus, If the recommendation was to be implemented, virtually all the commercial inventory that would be available to us under our agreement with the BCCI would either no longer be available or be of any meaningful value,” Star told BCCI in its e-mail.

The bench of Chief Justice TS Thakur and Justice FMI Kalifulla felt the Lodha panel must have some logic behind this recommendation. Following that senior Lawyer, Nalini Chidambaram, informed the bench that the panel drew from Australia and England where ad restriction is a common practice.

BCCI lawyer KK Venugopal argued that subscription fees in these countries were very high and that due to high telecast revenue, Indian cricket has benefitted and the team is ranked No 2 in Tests and is No 1 in T20s. “So, you are saying Australia and England are being defeated because they are getting less revenue? You should not spoil the enjoyment of the game. Are you saying your priority is only getting revenue?” Justice Thakur observed.

Lodha committee had observed that, “regardless of the wicket that has fallen, century having been hit or other momentous event, full liberty is granted to maximise the broadcaster’s income by cutting away to a commercial, thereby robbing sport of its most attractive attribute – emotion”.