18 Oct 2017
Live Post
Fashion TV working on India linear, SVOD launch by 2018-end
Baggage tow tractor rams into Air India plane at IGI
Reliance says Jio to turn profitable 'shortly'
Presence of outsider in Talwars' flat cannot be ruled out: HC on Aarushi case
Gauri Lankesh murder: Suspects' sketches released but SIT has nothing else

Stage set for Sony vs Star as BCCI opens tender process to sell IPL telecast rights

MUMBAI: The Board of Control for Cricket in India (BCCI) has decided to sell the next cycle of the Indian Premier League (IPL) rights through tender, thus setting the stage for a battle royale between existing rights holder Sony Pictures Networks India (SPNI) and Star India.

SONY-PICTURES-NETWORKS_coverSPNI, which has the first right of refusal as well as the right to match a counter-offer, will feel that the BCCI has not honoured the original agreement by opening the IPL rights for tender process. What course of action SPNI takes remains to be seen, including moving the court.

By keeping the TV rights tenure for the Indian subcontinent 10 years, the BCCI has ensured that the price for the cash-rich T20 league will reach stratospheric heights. The international and digital rights, on the other hand, are for a five-year period.

star india logoWith sports broadcasting in India becoming a two-player market, the IPL becomes the most important property to possess for either Sony or Star India. Sony, which recently signed an agreement to acquire Ten Sports Network from Zee Entertainment Enterprises Ltd (ZEEL) for $385 million, will do its best to retain the lucrative rights. Star India, on the other hand, will make an all-out bid to snatch the rights from its archrival.

Despite being obligated by the contract to offer the first right of refusal to Sony, the BCCI has decided to go through the tender process to award the IPL media rights, as it is under constant scanner by the apex court to ensure transparency in the process. In fact, one of the key recommendations of the Lodha committee, which was formed by the Supreme Court to clean up the BCCI, was to award future commercial rights through free and fair tendering process.

Anurag ThakurThe BCCI has invited Sony to participate in the bidding. “We believe in transparency. We have made it very clear that anyone who wants to participate will have to go through the bidding process. Sony has been invited to participate in the bidding process. We were supposed to offer—this is our offer to them. Our offer is to come and participate in the bidding process,” BCCI president Anurag Thakur said.

Thakur praised the role Sony had played in making the IPL the world’s most popular cricket league. He also reiterated that the board did not want any litigation and would not deal with anyone who was in litigation with the BCCI. The last provision, regarding litigation, puts SPNI on the spot if it chooses to move the court.

Sony’s TV rights expire after the 2017 edition of the IPL. Star India currently owns the digital rights and the overseas media rights, except in the UK and the US. All these expire after the 2017 IPL season.

An interesting part of the tender process is that the BCCI is not obligated to accept the highest financial bid and it retains the discretion to amend the process any time. Bidders are also required to submit signed media rights agreement with the bid.

Rahul-Johri1“Sometimes you get very similar bids and then the financial advisor looks at the value of it, how it is spread over 10 years. The final definition of the best offer for the BCCI has to be left to the financial advisors,” BCCI chief executive officer Rahul Johri said.

Deloitte will handle the financial due diligence and Amarchand Mangaldas the legal due diligence.

BCCI offers 3 rights packages

The BCCI has divided the invitation to tender (ITT) process into three rights packages—Indian subcontinent TV rights; Indian subcontinent digital rights; and rest of the world TV and digital rights. The Indian subcontinent TV and digital rights are by far the most valuable rights.

Of these, only the Indian subcontinent TV rights are for a period of 10 years (2018–27) while the remaining two rights packages are for five years (2018–22) each. Bidders can bid for any combination of the rights package.

So, why are TV rights for the Indian subcontinent awarded for 10 years while the others are for five years? “Television is very well established in our country. If you look at most cricket tenders, 8–10 years have been the norm. That’s why we went for 10 years. In digital, trends are changing very fast. Which is why we are selling digital rights for five years,” Johri said.

Further, the rest of the world rights have been broken into six groups.

Group A comprises Asia, Australia, Canada, Caribbean, Central & Southern America, Fiji, Israel and New Zealand. Group B includes the Middle East and North Africa while Group C has only the South Africa territory. Group D has the Sub-Saharan Africa region. Group E has the UK, Ireland and Continental Europe. Group E has the US and on a non-exclusive basis the territories, commonwealths and possessions of the US.

Currently, the Indian subcontinent TV rights are with Sony. The Indian subcontinent digital rights along with TV rights of certain international territories are with Star India-owned Novi Digital, which runs VoD service Hotstar.

Sony’s new deal with the BCCI, which was signed in 2009, was worth over Rs 8,200 crore (Rs 82 billion). Novi had bagged certain media rights for Rs 302 crore (Rs 3.02 billion).

The BCCI has said that television broadcasters in non-news category are eligible to bid for Indian subcontinent TV rights. For the Indian subcontinent digital rights, broadcasters, internet operators and mobile operators are eligible to bid. The ROW media rights are open to bidding for broadcasters, internet operators, mobile operators, as well as marketing agencies.

Consortium bids allowed

The board will accept consortium bids for the rights packages. The bidder will have to be a fit and proper person with a financial standing and should adhere to the suitability standards set by the BCCI. The bidders should not be under litigation with the BCCI.

Dates for the tender process

The ITT is available for purchase from 19 September and the last day for the purchase of ITT is 18 October. The last day for seeking clarifications is 4 October. The last day for submission of bid is 25 October, 9.30 am, at the venue specified in the ITT. Interested parties will have to pay tender fee to receive ITT.

The bids will have to be submitted in two envelopes, broadly Envelopes A and B. Envelope A will have the eligibility bid while Envelope B should have financial bid and signed media rights agreement.

According to the BCCI, only Envelopes B of compliant bids will be opened while non-compliant bids will be returned or destroyed.

Also Read: