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Sports broadcasters to make most of their victory

LiveMint logoLiveMint 30-08-2017 Shuchi Bansal

Tension may be rife at Prasar Bharati, the public broadcaster that runs both Doordarshan (DD) and All India Radio, on account of the recent Supreme Court judgement. The Supreme Court, last week, upheld a Delhi high court ruling of 2015 and said that Prasar Bharati can air the feed it gets from private sports broadcasters only on its terrestrial network and its own DTH (direct-to-home) platform, Free Dish.

This comes as a big relief to Star India Pvt. Ltd, which in 2012, paid Rs3,851 crore for the television, mobile and internet rights to all matches organized by the Board of Control for Cricket in India (BCCI) up until 2018 and has been sharing the feed with DD. The judgement is being seen as a stunning victory for Star India and other private sports broadcasters who will now have no competition to their feeds on private cable and DTH platforms. Earlier DD channels on cable and DTH also telecast the matches under the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007.

The state broadcaster is still examining the ramifications of the verdict. It may be noted that a section of the Cable Television Networks Act makes it mandatory for all cable operators and DTH to carry two Doordarshan channels.

So is the SC judgement coming in the way of the government notification? Will DD black out its channels to cable and DTH operators when a match it shares with a private broadcaster is on? Will DTH and cable operators be asked to switch off the channels? Or will DD eventually have a dual feed and show different programmes on cable and DTH while telecasting “sporting events of national importance” on DD Free Dish and its terrestrial network?

There are no easy answers to these questions as it is a complex matter which Prasar Bharati CEO Shashi Shekhar Vempati says is being studied. When the judgement came DD was airing the India-Sri Lanka cricket series although the rights were with Sony Pictures Networks. So it ran a ticker which said that the feed was not meant for cable TV operators. However, in the future that may not be enough. Asked about the way forward, Vempati said it was premature to comment. The silence at Prasar Bharati contrasts with the celebration among private broadcasters. The victory for Star India has indeed been spectacular and the implications for other private sports broadcasters heartening. To be sure, the rights to sports properties are acquired at steep costs. In India, however, till 1995, sports broadcast was the monopoly of Doordarshan and the sports broadcast rights with bodies like BCCI fetched little value. But after the opening up of the 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.

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