21 Nov 2017
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Subramanian Swamy’s SC move and complexities of IPL media rights e-auction

MUMBAI: BJP leader Subramanian Swamy, who has fashioned himself as a crusader against corruption, has moved the Supreme Court demanding e-auction of the Indian Premier League (IPL) media rights.

When the matter came up before Chief Justice JS Khehar, he said it would be taken up at a later date.

Swamy has said that the amount involved in the award of IPL media rights is to the tune of Rs 30,000 crore and the issue should not be decided in an opaque manner.

The Board of Control for Cricket in India (BCCI) will open IPL media rights bidding process on 17 July. The media rights will be for a period of five years unlike the previous cycle, which was for 10 years.

Swamy has contended that e-auction will bring transparency to the whole process as it has done in the case of telecom and coal auctions.

However, some media executives have questioned the effectiveness of e-auction for selling media rights, which has multiple components in it. Will all the rights including TV and digital be separate and can’t be clubbed? What if a composite bid for TV and digital is the highest amount?

They have also said that the price realisation of the IPL rights would be the highest under the current system as the bid amount of others would not be known. The best example of this is the recent five-year IPL sponsorship rights, which fetched Rs 2,199 crore. Chinese mobile company Vivo retained the rights while the next highest bidder was way behind. Oppo, the only other player to participate, bid Rs 1,430 crore.

A senior sports broadcasting official said the current system of granting rights is transparent since the sealed bidding covers are opened in front of all bidders.

Further, selling media rights is a different ball game say from auctioning coal blocks or telecom spectrum. In case of media rights, there are different properties like TV/digital and for different territories. In case of coal and telecom auctions, it is one set of properties that is being auctioned.

This, the official said, would make the process of e-auction of IPL media rights cumbersome.

For example, some companies like Amazon or Facebook are only interested in digital rights. ESPN would only be interested in say US rights while a SuperSport will only look at South Africa rights.

“If IPL media rights are clubbed for an e-auction, it will leave out many prospective bidders who are only interested in some part of the rights. If they are separate, what happens if a company’s composite bid is higher than the total amount from separate winning bids? The BCCI would probably want to have that flexibility,” the official added.

The official also said that the reason for auctioning coal blocks and telecom spectrum arose due to corruption and nepotism in allocating those resources.

“In cricket, the process of selling rights through bidding has been transparent since everyone submits bids in a sealed cover which is opened in front of all bidders. So where is the question of corruption?” the official averred.

Earlier, the BCCI under former president Anurag Thakur had begun the process of selling IPL media rights; however, the process got cancelled after the Supreme Court-appointed Lodha Committe, which was formed to reform the BCCI, refused to give it permission to go ahead with the process.

Eighteen companies including Star India, Amazon Seller Services, Followon Interactive Media, Taj TV India, Sony Pictures Networks, Times Internet, Supersport International, Reliance Jio Digital Services, Gulf DTH FZ, GroupM Media India, beIN IP, Econet Media, SKY UK, ESPN Digital Media (India), BTG Legal Services, BT, Twitter and Facebook had bought tender documents.

The process got cancelled at the last minute as the companies were planning to submit their bids.

The BCCI was expected to announce IPL rights winners on 25 October, which was also the last date of submission of bids.

The BCCI had split the IPL media rights into three different packages. The Indian sub-continent TV rights were for 10 years from 2018 to 2027 while the Indian sub-continent digital rights were for five years from 2018 to 2022. The rest-of-the-world (ROW) media rights were for five years from 2018 to 2022.

The SC-appointed committee of administrators headed by Vinod Rai is looking into the day-to-day functioning of the BCCI.