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ESPN STAR, a joint venture between Disney and Rupert Murdoch's Star, has won the 10-year commercial rights (telecast and ground sponsorship) for the Champions League Twenty20 for $975 million (Rs 4,387 crore), pipping a Sony Entertainment Television India-Dubai Investment Council consortium and Abu Dhabi Sports Club to the post.
The bid includes a commitment by ESPN Star Sports to spend $75 million to market the tournament, which is the international version of the popular Indian Premier League Twenty20 tournament.
The tournament promoted by the Board of Control for Cricket in India will involve international cricket club teams and will be held in India this year from December 3 to 10. The SET consortium bid $751.3 million and Abu Dhabi Sports Club's bid was disqualified because it was conditional.
Overall, ESPN-Star's bid is lower than the $1.03 billion (around Rs 4,120 crore based on the exchange rate at that time) that SET bid for 10-year telecast rights for the IPL. However, given that the Champions League will have fewer matches -- 215 to 250 compared to 600 in the IPL -- the per-match cost works out to Rs 17 crore to Rs 20 crore compared to under Rs 7 crore for IPL.
Despite this, R C Venkateish, managing director, ESPN Software India Ltd, said ESPN Star expected to break even from the first year. "We expect to be able to price our advertising at a 25 to 30 per cent premium over what advertisers paid for the IPL because the international format will be more popular," he said.
Venkateish added that since the broadcasting rights are global the combine expects to generate 50 to 60 per cent of its advertising revenues from India and the rest from other participating countries.
Industry experts reckon that since ESPN-Star expects more than half the advertising to come from India, it will have to sell a 10-second spot at Rs 3 lakh to Rs 3.5 lakh to break even compared to Rs 2.5 lakh for IPL.
Several experts doubt whether the combine will be able to make money on the property. "It is a tough call for ESPN because the cost per 10 seconds in this case is huge. A lot will depend on how much the international rights are sold for," said an executive from Group M, a media-buying agency.
The deal is a major bonanza for the BCCI, whose annual revenues from broadcasting rights, team franchisees, and stadia rights will cross Rs 2,000 crore in the next three years.
The board has already made around Rs 700 crore a year selling the broadcasting rights of the IPL to SET apart from selling franchisee rights of the eight teams that played the league.
