Green channel

This follows Prem’s post on the issue.

If I were Sony, I’d be very scared of this information and broadcasting ministry. The IPL is due to start on April 18, which is just over three weeks from today. In this time, the ministry could decide that the IPL is a matter of national importance. Perhaps (heh) the second half of the tournament - the bit where Sony execs see advertising rates hitting over 5 lakhs for ten seconds - could be of national importance. And there won’t be any warning. Just like last time, when on October 19, exactly two weeks before Pakistan played in India, the Test series was deemed to be of national importance. So I’d wrap up my advertising deals pretty quickly, and make sure they were darn watertight. 

Anyway, I had heard from an official at Doordarshan that it makes no money on cricket. In fact, it loses money. She wished the 75-25% deal with Nimbus didn’t exist (for those who don’t know, while Nimbus gets to keep its own advertising revenue, DD has to give 75% of the ad revenue it earns to Nimbus in return for taking the feed).

Now here’s an interview from 2005 (by Anjan Mitra of Indiantelevision.com) with KS Sarma, who was then CEO of Prasar Bharati:

Revenue generation seems to be the latest mantra in Prasar Bharati. Is that why the organization lobbied hard with the government to have laws favouring it where sports content, especially cricket, is concerned?
Why not ? Prasar Bharati’s reach amongst the masses, which is the target for the government, is maximum amongst all broadcasters present in India. And, what’s the big issue with cricket? That cricket is a big revenue earner for us is a big misconception. Moreover, the laws that you are referring to have been enacted by the government so that a huge chunk of the population that does not have access to cable and satellite TV gets to see quality sports, which may include cricket.

He goes on to say:

However, cricket helps DD in retaining viewership for other programmes. The chances of a viewer sticking around after a cricket match to check out the programme following it, is high. Feedback from TAM has indicated this and we are trying to capitalize on this.

Perhaps it hasn’t struck him and his colleagues that cricket isn’t just a loss leader for Doordarshan. When Sony promises hundreds of millions, it expects to barely break even. What it knows is that the “chances of a viewer sticking around after a cricket match to check out the programme following it, is high”. You make money on the edges.

But here’s another thing to think about. However you do the math, you can’t really make money off Indian cricket. It’s not a new trend. While it speaks about another country, here’s a bit from a 2003 edit, titled “Sports broadcast rights may head back to earth”:

The old economic model for TV sports is dated. The strategy among execs used to be that if they couldn’t recoup their investment in broadcast contracts, they could always use the games’ huge audiences as a one-of-a-kind opportunity to promote their prime-time lineups and other network programming. But today, the people watching sports are mostly men, and the people watching prime-time shows are mostly women. “Begrudgingly, executives are beginning to realize that sports is not a loss leader anymore, either,” says Richard A. Bilotti, a media analyst at Morgan Stanley. He estimates that sports losses wipe out about 40% of all profits from prime-time programs.

This is why you find fewer companies bidding for cricket rights. 

And here’s something handy for you to throw at government when it next talks about other countries making it mandatory for sporting events to be shown on terrestrial television. The other countries it is likely referring to have more than one terrestrial network, and they bid for rights.

Besides this, Nimbus’s grouse is perfectly valid. It’s been a year, and the signals have still not been encrypted. What this means is that this signal goes out to Pakistan, Sri Lanka, perhaps even the middle east and south east asia - all markets where Nimbus has sold broadcast rights. It also means, in a way, that DD’s DTH platform (subscriber base of over four million), regardless of where its subscribers live - city or countryside - will receive the broadcast. So this goes against the I&B ministry’s line that this is for people who don’t have access. Secondly, because it’s available on DTH as a free-to-air, why would anyone want to carry Nimbus’s Neo? If you’re Neo, you buggered. The DTH guys don’t want you, the cable guys sure as hell aren’t going to pay you. You’re so buggered.

Anyway, good luck to Sony. This is one messed up ministry.

If the ICC could take back its big decision of June 26, 2000, it probably would.

The ICC’s cricket telecast rights were on sale. Zee bid $625 million, a bigger sum than anyone else. But they weren’t given the rights. These were instead awarded to WSG-Nimbus, who put up $550 million. Zee felt aggrieved, and swore racism.

David Richards, the ICC’s chief executive, said the claim was “ridiculous”. “The decision taken by the group was, I say, on commercial grounds and it was in the best interests of the long term development of international cricket in all parts of the world.”

Best interests of the long term development of international cricket? What could he possibly mean? Perhaps Nimbus, that bastion of corporate ethics (do read this list), would further the game’s development (They did, in a way. Nimbus, which didn’t have a channel of its own, sold the rights to Sony, which did. So that’s what the ICC meant.).

Anyone with half a brain can read through this bull. The money a board gets for its rights is put to developmental use. And even if a broadcaster has limited reach – which Zee did not – rights can be tossed off to other channels in Australia, Japan, the US, wherever, for a price. Instead the rights went to a marketing agent for $75 million lower than the highest bid.

Then, in 2004, the BCCI invited bids for television rights, which Zee won again. Except that it didn’t. ESPN-Star matched Zee’s highest offer, and were awarded the rights. The matter went to court for a year. Meanwhile, fresh bids were announced. Nimbus, after assisting Zee on the bid, went out and bid on its own – to Zee’s horror – and acquired the rights. Zee, who had the next highest bid, was left hanging. The reason for the impasse in 2004 was because Zee apparently had no experience in cricket production. Anyone, absolutely anyone in broadcasting will tell you that’s just a dumb excuse. To put together a live sports event is a no-brainer. Producers are contracted – heck, you can put together a team within two days just on the phone – and at the end of the series, they leave, as do the cameramen and support staff, to work on another event. So why were the rights given to ESPN-Star?

Rebuffed twice, so is it any wonder that Zee would be mad as hell? Subhash Chandra wanted cricket in some form. Incidentally, thoughts of mutiny had first occurred to him when the ICC gave him a miss. This time it took the form of the ICL.

It’s unlikely that the IPL would have moved beyond its conceptual stage so quickly had it not been for Chandra’s ICL. In 2006, shortly after coming to power, Modi mentioned to me in an interview that he had envisioned cricket played between cities (Disclaimer: I adored Modi then). But then he said he’d do a lot of things, including building a cricket museum.

And now, thanks to the IPL, we’re seeing the start of a clash for the international calendar. It isn’t looking good for the ICC. But they only have themselves to blame for what’s coming their way.

Bill James can be credited with popularising sabermetrics - the study of numbers in baseball. I’ve put up an interview of his with Surowiecki here after a back and forth in the comments with Srivaths. Will numbers grow to reveal more in cricket than they do now? If effectiveness is a team’s goal, then yes.

Here’s a Q&A that caught me:

Surowiecki: Finally, do you think most baseball teams will eventually adapt, and incorporate sabermetrics into the way they work on a day-to-day basis? Or will there always be a Pope to the sabermetrician’s Galileo?

James: There will always be people who are ahead of the curve, and people who are behind the curve. But knowledge moves the curve.

Spot on. In-depth knowledge of a player’s worth takes the whole enterprise forward. This is so true for the IPL. Do read the whole interview.

Update: Also check out Cricinfo’s new numbers blog, It Figures. Corny name aside, the analysis is interesting.

“Make the whole thing electronic and put it on live TV. Give the bidders booklets on strengths and weaknesses. Throw up numbers on the players being bid for before the bidding for the player starts. Live analysis.”

I totally agree. Sony missed out on seriously high TRPs. 

But it’s already so exciting. Sid Monga of Cricinfo records IS Bindra gushing, “It’s my privilege to be associated with something that is unique in world cricket. I have never seen anything so riveting and so absorbing and so exciting even on the field. It’s amazing drama.”

I know where he’s coming from.

Two things. One: Does the $900,000 winning bid for Kallis surprise you as it does me? He has only played three T20 games so there’s not much you can come away with from that record. But he has a one-day strike-rate of around 71. And since he and Rahul Dravid often play similar roles in their batting line-up, I wonder what the franchise is thinking. Speaking of which, I think Dravid is totally worth it. He’s one of the finest finishers we’ve had, so scoring quickly isn’t going to be an issue with him here. Also, since Kallis is known to play for his average, how much sense does it make to have him play T20 at that price? Which leads me to…

Two) Will all-rounders be valued more than they otherwise would be, given the short nature of the game? 

Shakester wrote in response to an earlier post ‘The League’s Ripples‘:

The future you talk of is still a while away. Its not unthinkable, and probably likely; but it will be a few years before a league of this sort can start killing the long standing draw of nation v nation encounters. By then- assuming such a sea-change does take place- the market forces would have evened out the relevant acquisition costs. 

Instead of leaving a response in the comments, I’d write it out as a post. Here goes: 

I don’t think the IPL will kill national encounters as much as relegate them to slightly inferior status. But I’m being conservative. And I think it will happen within half a decade. Look, I’m not ‘in’ with either broadcasters or cricket folk, so this is entirely my assumption based on the following facts: lalit modi has been known to be obsessed with the western model of sports, ie. short, heavy on action, based on franchises. He’s purely money-minded, and I think he has a reasonable degree of clout. He’s also one of those wheeler-dealer types like Harish Thawani of Nimbus, who move to where the money is.

Twenty20 has more money than anything cricket has seen before. That’s why Lalit modi is backing this. Ad rates are one thing: high-profile India-Pakistan one-dayers sell ten-second spots for around 2.5 lakhs. A normal Twenty20 game would command as much, if not more, for the sole reason that there’s less ad clutter and many more people are tuned in. During the India-Pakistan Twenty20 final, I think a few spots went for 7 lakhs. It’s absolutely insane.

Please bare bear with me, for I’m going somewhere with this.

Knowing this, and knowing that Test cricket is barely watched by anybody, I believe that IPL will probably include one-dayers too. As far as Tests go, one theory is that because Tests are sacrosanct, nobody touches this format. But I’m being conservative. Taken to an extreme - by the time the existing round of national television contracts run out in 2012-2014 - the idea of mixed teams could be applied to Test cricket too, if there is enough money in it. We ignore the SuperTest because it was haphazardly created, with more emphasis on star power than any attempt to calculate the effectiveness of a bunch of players put together. Had the world XI team put up a good performance, we would have seen a prototype of teams to come. In three-four-five years, when we’re suitably used to the idea of mixed teams, we’ll probably ask: hey, why not do the same in Tests?

It’s because of this that I think Sony and WSG - who bid a billion dollars for the rights together and have a walkout option after five years - have a brilliant deal. I can’t see IPL hosting a Zimbabwe-Bangladesh game. There will be fewer useless fixtures.

As a result, the valuation of other television contracts will fall because the most-watched event is elsewhere. That’ll be the ‘evening out’ you mentioned. I’ll bet that at ESPN-Star they’re asking themselves: if Sony promised a billion for ten years of IPL, and we promised a billion for all world cups, including the under-19 and women’s world cups, what the hell did we pay for?

But the market hasn’t yet exercised the force it’s capable of. Not in the ICC league, and not in IPL. If market forces were allowed to operate unencumbered, Zee would have had the rights to the last two World Cups as well as the contract that Nimbus currently has with the BCCI. The IPL doesn’t need the bidding cap currently imposed on teams, as well as the ‘iconic’ status imposed on Tendulkar, Dravid, and others, which means these players can’t be bid for.

But other than this, I think the IPL is a godsend for cricket lovers. Frankly, one-dayers are getting boring, and surprisingly Test cricket is on the up. But who has time for Tests? In that way, T20 is brilliant. It has big hitting which crowds love, but there’s also so much skill at work by the bowlers. And I can totally see talent being developed by companies that hold their employees accountable. But the bit where I actually see cricket evolving is in the field of statistics and how we measure a player’s worth. So far we haven’t had an incentive to really look at the value a player provides to the team. This should hopefully change. I’ll be very surprised if, after a couple of years, franchises attempt to fill their team with players who have great averages, but little to offer besides that.

So Shakester, perhaps I’m over-enthusiastic, but I think the day when cricket gives in almost completely to the market is at hand. There are just too many tantalizing opportunities to not go down this path.

Ps. Perhaps I meandered a bit.

IPL can do many wonderful things, but Modi isn’t fine with just that. He now believes that IPL will put an end to football’s incursions into India. Sometimes you wonder if Enron sent a consignment of their favorite weed to these clowns. They want a free market which they control. They milk the publicity of mammoth deals that are years away from being realised.

Do you get the feeling that if Modi could banish every other channel, and form of entertainment, except for the channel that his cricket was on, he’d do it?

 Speaking of which, here’s an interesting story about a university student who played in the recent ICL. Earlier this week he was ejected from his university game when Ratnakar Shetty came to know he was playing.

Things like this make me want to hug the BCCI.

The possibilities are so amazing. Think of all the mixing and matching that can go on when money meets talent. I wonder if they’ll introduce the substitutions rule discussed earlier. In any case, there’s a great opportunity for all sorts of technicians and number-crunchers now. TA Sekar’s already taken by GMR of the Delhi franchise. There’ll be plenty of space for other backroom boys. And as for the numbers guys, cricket doesn’t use its figures well enough. Will there be a new way of looking at stats? Jeez I hope so. There’s too much of mystery around a player’s form, and indepth reading of it on television is limited to ‘innings since last hundred’. I’d look at baseball right away. And Moneyball would be required reading. The damn runs/average/centuries thing is so pointless.

Incidentally, why would they want to limit the budget allocated for bidding on players to $5 million? The most likely reason - a fear of inequality - should be dispelled by one look at the Yankees.

The development of the IPL is interesting. It’s inevitable that it will eat into cricket elsewhere, as in the case of coaches. Greg Shipperd, of Australia, is a contender. Will cricket learn to live with two leagues? I don’t think the national game will continue to have the importance it has now. As the competition develops and expands, it’s very likely that players won’t wait till their national careers are at an end to sign up. There’s too much jhanjhat in the national game. In that sense, Lalit Modi’s designation as commissioner of the league is a pretty good call. He’s been doing the rounds to strengthen IPL’s importance on the cricketing calendar from next year on. I don’t know whether anyone seriously believes that the IPL can coexist with the ICC.  

Here’s why: it has everything to do with TV. If the league was to expand, and international cricket was relegated to fewer months, as seems to be the case from next year, broadcasters would have serious problems. The guys at Ten Sports, for one, were surprised to hear that this year’s series against Sri Lanka might be the last time West Indies will play a series at home during its best season of March-June or thereabouts. Assuming that it rains less during these months, which broadcaster would be happy? If the cricket calendar has to be moved around, which I’m dead certain will happen, it will mean that the deals broadcasters brokered with various boards, including the ICC, will have fundamentally changed. If the league takes off, the other rights automatically become less important. Are ESPN-Star’s ICC rights really worth a billion bucks now? I’ll bet they’re wishing they had bid a little less for one event, and a little more for the other.