India news January 6, 2016

Lodha report could change cricket's TV economy


The Lodha panel wants Test and ODI cricket in India to be ad-free between overs © BCCI

One of the more radical recommendations of the Lodha panel report is one that would resonate most with cricket fans: restricting advertisement breaks during broadcast of Tests and ODIs in India to only the drinks, lunch and tea intervals. This effectively would mean no ad breaks at the end of overs, which could turn the Indian cricket economy on its head and, according to those in the TV business, ultimately send subscription rates sky high.

The Lodha report is fairly clear: "It is recommended that all existing contracts for international Test & One-Day matches be revised and new ones ensure that only breaks taken by both teams for drinks, lunch and tea will permit the broadcast to be interrupted with advertisements, as is the practice internationally. Also, the entire space of the screen during the broadcast will be dedicated to the display of the game, save for a small sponsor logo or sign."

Taking note of how commerce has "overtaken" the enjoyment of cricket, the Lodha panel pointed to how "regardless of the wicket that has fallen, century having been hit or other momentous event, full liberty is granted to maximise the broadcaster's income by cutting away to a commercial, thereby robbing sport of its most attractive attribute - emotion."

The recommendation stems from the committee's belief that fans' viewing experience is interrupted in international games. To offset the commercial impact of this recommendation, the committee exempted the IPL, from which the BCCI makes the bulk of its revenues. The recommendation would ensure the viewers would have uninterrupted views of the game, the changes, and the emotions even at change of ends.

One of India's top sports broadcasting professionals, however, felt such recommendations would have a "cascading effect" on Indian cricket's ecosystem. "There is a certain cost that a broadcaster pays, a certain rights fee," he told ESPNcricinfo. "The rights fee has to be recovered either through a combination of advertising and subscription or only through subscription. The broadcaster does some recovery from advertising."

According to him, a reduction in the quantum of advertisements would invariably result in a greater burden of subscription fee being passed on to the end consumer. He pointed to the scenario in the US where the subscription charges are significantly higher when compared to India.

"Right now they [subscribers in India] barely pay Rs 5-10 for a cricket channel like Star Sports or Sony Max," the official said. "[If advertising revenue is curbed] it will jump to the levels in the US."

He said advertisements wouldn't get much play during the lunch or tea intervals as viewers tune out. This, in his opinion, would result in a fall in the number of advertisements and the value of advertisement inventory. It is understood that Star Sports, who hold the broadcast rights for Indian cricket, wouldn't stand to lose since its contract with the BCCI allows for renegotiation of terms should the recommendations come into effect.

The official, though, felt the larger problem was the financial implications it would have on the BCCI given the revenue earned from sale of broadcast rights was the board's major cash cow. "What a broadcaster can pay for these rights will have to be revised downwards, and I mean really substantially. The numbers will go down by half if not more.

"The BCCI is a healthy body and you have so much cricket infrastructure in this country because the BCCI gets all this money," he said. "Let us say if the implications of all this would mean a billion-dollar contract becomes half-a-billion dollar contract then the BCCI's capacity to invest in cricket will have to come down by half."

He also said it would dissuade broadcasters from investing in Indian cricket given other viable options. "If a broadcaster is looking at cricket then everybody should dump BCCI rights and start bidding for Australia and England and South Africa and rights of other countries where none of these encumbrances apply. Tomorrow if I have to bid I will bid for those rights."

The official also felt there were inconsistencies in the manner the committee had exempted T20 cricket, more specifically the IPL, from these regulations. "Cricket rights are already seriously overheated on per-match value," the official said. "For the BCCI rights, Star Sports pays around Rs 43 crore, while in the IPL the per-match license fee is only about Rs 10-11 crore, they are fine for the ads to run.

"If Star is expected to cough up Rs 43 crore, it would need legitimate avenues to recover that money. A broadcaster wouldn't mind broadcasts being made totally ad-free but then the value of the rights will have to be equally adjusted."

While it is learned the committee studied broadcast models adopted in countries like Australia and the UK, there is no reference in its report to broadcasting corporations in India being interviewed. "They didn't speak to companies like Star or Sony," the official said. "I don't know what input they have used [to arrive at the recommendations]."

With inputs from Nagraj Gollapudi. Arun Venugopal is a correspondent at ESPNcricinfo.

Comments have now been closed for this article

  • Mohsin on January 9, 2016, 9:47 GMT

    1) Viewers pay Rs.40-45 per Sports channel in India & not Rs.5-10. Rs.5-10 is what viewers paid 10 years back when broadcasters managed to recover their money playing 2-3 only. They play 4-5 ads now even after being charged 4-5 times d subscription fees compromising d viewing experience 2) Star Sports broadcast has reached a nadir. Minimum time is spent during live action on d intricacies of d game. Both by d cameraman & commentators. Cameramen r busy looking for pretty faces in d crowd instead of d events on d field(real perverts these lot) while commentators r forced to blurt out Karbonn Kamaal catch & DLF maximums. They can't raise any useful points in d short span of time left bcoz of excess ads. 3) The useless stats dat Star Sports come up wid nowadays has complicated cricket. The 'keys to success' dat dey come up wid r something no viewer/comm/player himself remember later.

  • g on January 8, 2016, 8:44 GMT

    Those who say we badly need money from these ads, please take it easy. SA and NZ earn just peanuts when compared to even 20% of what BCCI gets today. Are they not producing good talent? If we remove all the corruption (or even a third of it) there will enough money even with the reduced ads to create a good cricketing culture and talent. The world's richest board should be the last one to complain about funds avail.

  • g on January 8, 2016, 8:26 GMT

    As Harsha Bhogle once said, Indian cricket fans are the biggest source of money but get the worst viewing in the world. In my opinion this ad restriction is one of best recommendations, along with 'No politician' one. The extent of greediness in pushing those ads upsets people like me to no end. Today we are not even getting a chance to see the delight/disappointment on the face of the players if some event wicket falls or a boundary is hit on the last ball. I watched 2003 WC in UK TV and the ads were shown only when nothing important was going on the field. You could see captain and bowler plotting their plan, the emotions on the players when something happens... Today, all that is washed out. You only see the bowler already in his run up..

  • ian on January 8, 2016, 6:29 GMT

    The amount of advertising is one thing that can certainly interfere with the enjoyment of watching cricket (or any live entertainment you enjoy), but *what* is advertised is another: relentless alcohol and tobacco adverts are designed to endanger the health of a nation under the guise of enjoyment. I wonder how many crimes are alcohol-related ( violent and non-violent) and ... is there a passive smoking campaign in India yet? Should these types of advertising be tolerated in the name of economic progress? There's a topic for debate... Pls publish.

  • Avinash on January 8, 2016, 1:58 GMT

    Ads in between overs is fine, but three things hurt the viewer experience: 1. an ad being shown immediately after the fall of a wicket, without showing a replay or even without allowing the commentator to finish his sentence. 2. things like "Kent extra cover, sponsored by" immediately after the last ball is bowled and 3. the advertisement bands that come up when the match is on.. May be we don't need to remove ads totally, but we need to cut it down little bit.. And the logic behind users having to pay is bullshit.. Cricket still had very little competition from other sports.. Even hushed viewer fees should be fine.. And Rs.5-10 for a sports channel is a wrong fact.. Sports channels do not come for less that 60-70 bucks on most networks..

  • wasim on January 7, 2016, 16:21 GMT

    And by the way does anyone know that most times the game is stopped till the ad is over? Look where we are. The game waits for TV and not the other way around.

  • Aayush on January 7, 2016, 15:28 GMT

    Well sadly enough this is an unrealsitic suggestion. The game does need Money to run. Probably there should be a cap put on the ad timings but completly taking them off is just stupid.

  • RISHI on January 7, 2016, 14:00 GMT

    I don't mind the advertisement between overs, have seen best creative ad during the matches... Further to this smart players know when to sledge, that will go off

  • ajay on January 7, 2016, 3:34 GMT

    further to my observations earlier a few more . it is the revenue from these very ads that the commission is seeking to close down, that the bcci not only runs the whole game,but also is able to generate more revenue which it employs for 1)running the whole game and structure of cricket.2)pays all players of ranji trophy circa 30000 per match playing day. not too much in the distant past,playing cricket was a totally unviable profession.3)these funds are used to create the large infrastructure like stadia and grounds across the country that enable this level of cricket to be played. the bcci since its inception about 80 odd years ago has continued to grow and spread cricket,and while doing so it has rewarded the spectator,taken good care of its players,who now at the highest level often earn much more then ceo's of multi nationals.and all this without a penny from the nations tax fact it contributes hundreds or crores to the nation in direct and indirect taxes every year.

  • ajay on January 6, 2016, 18:57 GMT

    very well written arun. somewhere in the past, i used to be treasurer of the bcci,and therefore i have some insight into the finances and am somewhat aware of the tv rights contracts,and how they work. as pointed out very rightly,all such contracts work on a simple principle that is sometimes not that well understood in developing markets.."user pays" everything is available in the market place,but it has it own fair market price that is arrived at by the interaction of market forces. so while it would be brilliant for people to see matches, free of advertising,except in the breaks,it will be for the millions of cricket fans in this country, whom the lodha committee seeks to "please and protect" to reach a bit deeper into their pockets. so the choice is clear,either face the depletion of "emotion" by watching some ads at the end of overs,or pay more. finally, it would always be nice to have your cake and eat it too,but unfortunately that is not practically possible.

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