...or a short history of the BCCI’s rise to riches
Boria Majumdar | 16 Apr, 2012
…or a short history of the BCCI’s rise to riches
1992 ~ Doordarshan demands Rs 5 lakh from the BCCI to telecast cricket matches played on Indian soil
2012 ~ Star Group pays the BCCI Rs 3,851 crore for rights to telecast cricket matches on Indian soil from 2012 to 2018. This breaks down into a fee of Rs 32 crore per match between 2012 and 2014, going up to Rs 40 crore per match between 2014 and 2018
In under 20 years, cricket has become one of India’s most lucrative businesses. This dramatic transformation is recorded here in the voices of the men who played starring roles in either promoting the cause or standing in its way—Jagmohan Dalmiya (at various points BCCI Secretary, ICC President, BCCI President, CAB President); IS Bindra (BCCI President, Punjab Cricket Association President, ICC Advisor); Mark Mascarenhas (Head of WorldTel); Ratikanta Basu (Director General of Doordarshan); Lalit Modi (Head of BCCI Marketing Committee, Chairman of IPL); N Srinivasan (Head of BCCI Marketing Committee, BCCI Secretary, BCCI President); Uday Shankar (CEO, Star Group, India) and Dr Ali Bacher (President, United Cricket Board of South Africa; Chairman, ICC Cricket World Cup 2003 Organizing Committee). This oral history is constructed by piecing together excerpts from interviews these men have granted me over the years and from primary documents and letters written by them
INDERJIT SINGH BINDRA
President, Punjab Cricket Association (2003-04):
“Prior to 1993, Doordarshan had a monopoly on the telecast of cricket matches in India. For each live telecast, DD demanded sizeable money from the BCCI to meet [the] costs of production. The scenario changed in 1993 when the Board sold television rights for the India-England series to Trans World International (TWI). Doordarshan, in turn, was forced to pay TWI $1 million for the right to telecast the matches in India. This agreement, the first of its kind in the Board’s history, made it richer by $600,000. It allowed the BCCI to tide over the severe financial crisis plaguing Indian cricket between 1987 and 1992.”
However, the sale of telecast rights to TWI did not mark the end of Doordarshan’s monopoly over the telecast of Indian cricket and the BCCI soon found itself embroiled in a bitter controversy with DD over telecast rights.
(in interviews conducted when he was BCCI President (2001-04) and CAB President, 2004-05 and again 2009-)
“Our struggle with DD began on 15 March 1993 when I, as president of the Cricket Association of Bengal, wrote a letter to the director-general of DD informing him of the six-nation (eventually five-nation, with the withdrawal of Pakistan) international cricket tournament that was to be held in November 1993 as part of our diamond jubilee celebrations.”
“Our letter asked DD to send a detailed offer for any of the two alternatives: one, that DD would create the host broadcaster signal and also undertake live telecast of all matches in the tournament; or two, any other party may create the host broadcaster signal and DD would only purchase the rights to telecast the matches in India. We emphasised that in either case the foreign television rights would be retained by the Association. It also asked DD to specify the royalty it was willing to pay for the telecast rights.”
“On 18 March 1993, the controller of programmes (sports), DD, asked CAB to send in writing the amount it expected as fee for exclusive telecast rights within India. On 19 March, CAB informed DD it was willing to offer DD exclusive rights for India and was agreeable to DD generating its own ‘host broadcaster signal’ for $800,000. CAB, however, declared it would reserve the right to sell the worldwide telecast rights of the Hero Cup (that is, telecast rights excluding India) to foreign broadcasters.”
“On 31 March 1993, DD sent its bid as ‘host broadcaster’ in India for a sum of Rs 1 crore. CAB replied on 12 May stating it had decided to sell/allot worldwide TV rights to one party only and asked if DD was interested. A couple of days later, DD faxed a letter to CAB stating it was committed to its bid of Rs 1 crore for exclusive telecast rights for India alone. It also suggested that the speculation over Pakistan’s participation in the tournament, which might affect viewership and commercial accruals, might force DD to rethink its bid.”
“With DD turning a deaf ear, CAB, on 14 June 1993, entered into an agreement with TWI to telecast the Hero Cup. In return, CAB was to receive $550,000 as a guaranteed sum. It was also specified that if TWI received any sum in excess of the guaranteed sum, it would be split in a 70:30 ratio in favour of CAB. On 18 June 1993, DD made an announcement in the media that it had decided not to telecast the matches …and was determined not to enter into any negotiations with a foreign company to obtain television rights for a tournament being played in India. Soon after the announcement, we wrote to DD to verify the authenticity of the news report. The letter went unanswered.”
“On 27 October, DD reiterated its decision to not purchase signals from TWI because it was a foreign organisation. This was puzzling because DD had purchased telecast rights from TWI earlier during the India-England series in January 1993. On 29 October, we once again requested DD to reconsider its position, also conceding, purely in deference to DD’s apparent sensitivity to taking signals from TWI, that CAB was happy to allow DD to produce its own video for the matches, which DD would directly purchase from CAB, at a mutually agreed price. The very next day DD sent a message stating it would not pay any access fee to CAB to telecast the matches. Rather, for DD to telecast the matches live, CAB would have to pay technical charges/production fee at Rs 500,000 per match. CAB would also have to give DD exclusive rights for the signals generated and the parties interested in taking signals would have to negotiate directly with DD.”
“Following up on DD’s letter, CAB, on 4 November, asked for a series of clarifications. Since DD had asked for production fees for the telecast of matches, it was presumed that all revenue generated from advertisements would belong to CAB and that it would have the right to charge access fees from parties abroad. On 5 November, DD rejected these terms.”
With the dispute turning ugly, the Information and Broadcasting Ministry stepped in on 5 November and announced that, ‘According to law, no agency other than that belonging to or appointed by the Government of India has a right to telecast any event live by uplinking signals from Indian soil.’ The law being relied upon was the Indian Telegraph Act of 1885.
(from the same set of interviews)
“With no other option, CAB, on 8 November, filed a writ petition in the Calcutta High Court praying that the respondents (the Government of India) should be directed to provide telecast and broadcast rights of all matches as well as make arrangements for the telecast and broadcast of matches by TWI. After hearing the petition, the High Court passed an interim order instructing the Government not to thwart existing arrangements between CAB and TWI.”
“…the film facilities officer of the Information and Broadcasting Ministry informed the Customs department in New Delhi, Mumbai and Kolkata airports that since TWI had not obtained necessary clearances from the Government to cover the tournament, it should not be permitted to remove exposed film outside India till the films had been cleared by government officials. The Customs officials, in fact, went ahead and confiscated all equipment belonging to TWI, causing us huge problems during the tournament.”
This alarmed some of the participating teams, evident from a letter written by Ali Bacher of the United Cricket Board of South Africa.
(12 November 1993)
‘The United Cricket Board of South Africa wishes to place on record its extreme disappointment that the Cricket Association of Bengal is unable to ensure that Sunday’s historic cricket match between South Africa and West Indies in Bombay [14 November 1993] will not be televised by TWI and therefore not seen by the people of South Africa.’
(I have a copy of the letter)
(same set of interviews)
“On 14 November, the high court issued another directive, instructing the Customs authorities to release TWI equipment. The [order] wasn’t complied with. TWI, undeterred by Mumbai Customs’ continued intransigence over the seized equipment, and having paid us, recorded the West Indies-South Africa match with locally hired equipment.”
“With the Customs authorities refusing to abide by the orders of the Calcutta High Court, we were compelled to file a writ petition (No. 836) in the Supreme Court on 15 November. In a landmark judgment, the court directed that TWI could generate its own signals by focusing their cameras on the ground where the matches were being played. It also ordered the Customs authorities to release the confiscated equipment forthwith. Never before in the history of independent India had a Supreme Court division bench sat in judgment at 11.30 pm on a government holiday.”
The order was passed by Justices JS Verma and PB Sawant. The deadlock, however, persisted even after the Supreme Court order. In fact, a fresh issue arose over the first choice of camera positions at the venues. It had resonance in the international broadcast arena with Mark Mascarenhas, Head of WorldTel and who had bought the telecast rights for the 1996 World Cup, expressing serious disappointment.
(in a letter faxed to the BCCI, 16 November 1993)
‘It was a premise of our agreement regarding the World Cup that the event will be produced by WorldTel, with internationally recognised television production, and the event will be offered to broadcasters on this basis. Based on the TWI situation, I have already received a letter from the Director of Sports Programming at the SABC in South Africa advising that the circumstances lead him to recommend that his organization withdraws from negotiations for the World Cup. Other TV networks from around the world have called me this morning expressing similar sentiments. In my opinion irreversible damage has already been done. We look to the Board to take all steps necessary to rectify the situation before it jeopardizes the 1996 World Cup and the investments of all involved, and does lasting harm to India as a sponsor of major sporting events.’ (I have a copy of the letter)
Earlier that year, Mascarenhas had written a letter to the joint organising committee of the World Cup, which said, ‘We are interested in the worldwide television rights for the 1996 World Cup and would like to submit the following proposal for your consideration: US$9.5 million minimum guarantee for exclusive worldwide television rights to the competition, with a 75-25 split in favour of the World Cup committee on additional revenues. Or USD 10.5 million for the outright purchase of the exclusive worldwide television rights to all matches in the competition.’
same set of interviews
“Finally, on 17 June 1994 I wrote to the Director General, DD, saying, ‘I’d like to reiterate on behalf of the Board of Control for Cricket in India our desire and commitment to fully explore the potential of arriving at a mutually acceptable agreement regarding the production and broadcast of Indian cricket, both international and domestic, with your esteemed organization. Such an agreement can encompass a suitable arrangement between TWI and DD for co-production of an internationally acceptable signal.’
Doordarshan, however, continued to be obdurate.
Director General of DD (on 20 September 1994)
“Until last year, it was Doordarshan that telecast the home series and also a few other series played abroad. They (Bindra and Dalmiya) have not even met us on the issue. Why should Doordarshan talk to intermediaries like Trans World International?”
The problem was finally resolved in February 1995 when the Supreme Court upheld the BCCI plea that telecast of matches by its chosen broadcaster was part of the fundamental right to freedom of speech and expression. The order was passed by a division bench consisting of Justices PB Sawant, BP Jeevan Reddy and S Mohan.
In the words of the Supreme Court order: ‘The airwaves or frequencies are public property. Their use has to be controlled and regulated by a public authority in the interests of the public and to prevent the invasion of their rights. The right to impart and receive information is a species of the right to freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution. A citizen has a fundamental right to use the best means of imparting and receiving information and as such to have access to telecasting for the purpose.’
Having won the battle against Doordarshan, the BCCI finally started making big money on cricket rights from the turn of the millennium, selling the rights to Doordarshan for four years (2000-2004) for $54 million.
(same set of interviews)
“Indian cricket was now a robust property. We were glad that Doordarshan agreed to pay approximately Rs 240 crore for rights for the years 2000-2004.”
Between 2000 and 2004, the rights multiplied manifold in value and when Dalmiya once again tried selling the rights in 2004, he got a bid of $308 million from Zee Telefilms. ESPN’s was the second highest bidder at close to $300 million. However, the rights weren’t awarded to Zee on technical grounds and the matter went to court with both parties alleging foul play. The rights were finally awarded to Nimbus by the new BCCI dispensation under Sharad Pawar, with Lalit Modi driving the deal in 2006 for $612 million, subsequently renegotiated to $549 million (Rs 2,400 crore at 2006 rates).
on the Nimbus deal, 18 February 2006
“Indian cricket had been undervalued. Now we are beginning to see the real value of the property.”
The Nimbus contract was extended for another four years in 2009. This time round, Nimbus agreed to pay Rs 31.25 crore per match. Once again Lalit Modi was at the forefront of negotiations. The deal was finally scrapped in 2011 with the BCCI pulling up Nimbus for non-payment of dues, and the contract was finally awarded to the Star group for six years from 2012 to 2018 for Rs 3,851 crore.
CEO of Star Group, 4 April 2012
ON STAR’S VISION
“For us it is a long-term strategy. We believe in the brand power of cricket and have invested in the brand long term. There’s no doubt cricket will continue to be the driver of the sports business realm going ahead.”
“In collaboration with our partner ESPN, we will do a commendable job. We have already got three channels which have a lot of credibility and we will showcase cricket in this bouquet of channels.”
ON THE IMPORTANCE OF CRICKET IN INDIA
“I think as far as Indian identity is concerned, cricket overtakes even Bollywood. While Bollywood is a big source of entertainment, its conscious articulation as an Indian medium by the common people is not so pronounced. But cricket is perhaps the most conscious nationalistic activity Indians indulge in. To that extent, there is no cricket minus India. Every time you watch cricket, you are reminded, consciously or subconsciously, of the Indian identity… in terms of importance, cricket has now left Bollywood far behind. It is next only to big political stories and really big economic stories… And very often, it overtakes political and economic stories as well.”
“For an average Indian cricket lover, a player doing something that costs India the match is the closest thing to treason… The kind of interventions we make in other activities like politics, civic and municipal administration, and economics, we have now started making in cricket. In the same way that I look at who is responsible for misery during the Bombay floods, who is responsible for this goof-up in administration, we look at who is the culprit of the match.”
Shankar argues that under Star, the next major innovation will happen in the domestic cricket broadcast space.
“The next round of innovation (pause), though it is too early for me to say this, will have to come in the domestic cricket broadcast space. The domestic cricket experience in India continues to be poor. The number of cameras used is far fewer, the best analysts are not used and overall the experience has not been marketed well. There is no difference, in essence, between the Indian Premier League and the Ranji Trophy, for example. Both are domestic competitions run by the BCCI and there is no reason why we can’t make the domestic cricket broadcast experience something to look forward to for the passionate Indian cricket fan.”
“In fact, in domestic cricket, the connect is greater because all the cricketers are from a particular Indian state or region and are not hired arsenal who will be there just for six weeks. Yes, I agree that in a match between Bengal and Delhi, for example, there will be no connect in Tamil Nadu, but in the two competing states, there will be a lot of passion. We have to tap this passion and make domestic cricket an important property. That’s where the next round of innovation is waiting to happen.”
at a press conference in Chennai on 2 April 2012
“The BCCI is very happy with the deal. Now the media rights have been fully evaluated and fully priced with Star coming out with such a deal.”
Thus ends the brief history of the BCCI’s transformation—from shelling out Rs 5 lakh per match to earning Rs 40 crore a game. Is there a lesson in this? You tell us.