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Restricting ad inventory on cricket to affect TV rights prices: NP Singh
MUMBAI: The Lodha panel’s recommendation to restrict commercial advertisements in cricket telecast to drinks, lunch and tea breaks has not gone down well with sports broadcasters.
Any reduction in commercial airtime will bring down the value of cricket rights in India, said Sony Pictures Networks (SPN) India chief executive officer NP Singh.
For Singh, there is a correlation between the value of a sports property and ad revenue that a broadcaster makes. “Given the current distribution landscape where there is no true addressability, any inventory reduction will lead to a loss in the value of a property. If the recommendation goes through, we will consider the implications the next time we bid for a property.”
Although the recommendation does not directly mention the Indian Premier League (IPL), Singh said that Sony is keeping an eye on developments. He was responding to a question asked by media on the impact the Lodha panel report would have on the sports broadcasters.
Among other recommendations, the Supreme Court-appointed Lodha panel wants an interruption-free telecast of the cricket matches. “Commerce has overtaken the enjoyment of the sport, with advertisements continuing many a time, even after the first ball and again commencing even before the last ball of the over is played, thereby interrupting… proper broadcast of the game,” it said.
SPN India president Rohit Gupta makes the point that leagues like the English Premier League (EPL) are thriving because of TV rights fees. “Limiting inventory will hamper the sport. Payments to players and investments in stadium infrastructure will take a hit.”
Gupta said that the BCCI broadcast guidelines are very strict already. “We can only air ads during a dead-ball situation. When a bowler reaches his mark, we have to go back to the action. In the past four years not a single ball has been cut.”
SPN India executive VP and business head of the sports cluster Prasana Krishnan noted that the major chunk of cricket’s money comes from the broadcasters. “When you hurt the core, the money dries up. How does advertising have anything to do with governance?”
India’s distribution market is not evolved yet, Krishnan added. “In the UK a basic sports package costs 40 pounds. In India, it is impossible for people to cough up that much. Another issue is that DD airs India cricket matches as they are deemed events of national importance. If ad revenue falls, then how will the pubcaster make up the money?”
If the Lodha panel recommendations come into force, industry experts feel that broadcasters would renegotiate their contracts with the BCCI.
Eurosport CEO Peter Hutton said, “It would be unfair to impose those restrictions on cricket rights that are already sold. A broadcaster makes an estimation of value partly on advertising inventory, and to change the rules after paying for the content would be wrong.”
According to Dentsu Aegis CEO Ashish Bhasin, the move will have a detrimental impact on the game. “The profitability of the channel and the BCCI will drop. The impact will be significant if you miss ad time. As long as ads don’t interfere with the game, they are fine. At the moment, it is fine.”
Spatial Access CEO Nikhil Rangnekar believes that rights fees for cricket would fall if a large chunk of the ad inventory goes away. “A high proportion of advertising revenue comes from ads that air in between overs,” he said.