ESPN acquires Cricinfo

ESPN International has acquired Cricinfo website. Note that the acquisition is by ESPN International and not ESPN-Star Sports the Disney-Murdoch joint venture. ESPN Star Sports has its own sports site www.espnstar.com, but that doesn't have the same fan base as Cricinfo. So there will be some tension between ESPN-Star and ESPN International on how Cricinfo is treated.

Disney's long term gameplan is not clear. However, looking at Soccernet, I am not very confident that great things may happen with cricinfo.espn.go.com (as the site will be renamed soon).

Current Cricinfo earnings are too small to merit enough focus here from ESPN bigwigs.

A few things, well funded Cricinfo can do (but may not do):

• Video scorecards of every Test and One-day match - at least the wickets and fours/sixes clips linked to every match scorecard.
• Additional key moments like centuries, fifties, controversial (non-)dismissals etc.
• These clips to be linked to the statsguru database.
• A good mobile interface to statsguru, as well as the above video database
• Allowing for embedding (ad supported and delivered by Cricinfo) video clips into third party blogs, when fans want to build up an argument and support the argument with video.
• Archived full highlights of video of classic past matches for pay-per-view streaming.
• Live audio streaming (legal I suppose. Off tube may not work with Disney) of all Test and One-day matches online (paid + ad supported).
• Video profiles/biographies (30 mins) of important Test cricketers (both online and offline in the form of DVDs)
• Better coverage of domestic cricket in all Test playing countries, including live scorecards of first-class games

Cricket: When you are too greedy...

BCCI is an example of how you will suffer when you are too greedy. Also, when your approach is not to build partnerships but opportunistic deal making and screwing the 'opponent'.

Jagmohan Dalmiya was a deal maker. He will care the least about the telecast partner or sponsor. He will not work out the nitty gritties. He will talk in terms of the larger number and leave the rest to sponsors and telecasters, who invariably suffer in the end.

Lalit Modi, who replaced Dalmiya as the main negotiator for BCCI is just as arrogant. As long as Dalmiya was in BCCI - irrespective of whether he is the Secretary or President or Treasurer or whatever - he will discuss all the commercial deals. Modi is the equivalent. He is one of the several vice-presidents of BCCI and is entrusted with the television negotiations.

His dealing was downright harsh and Zee (after winning the overseas bid) even complained against Modi's behaviour.

With India's showing in World Cup downright pathetic and Indian Government's legislation on sharing TV feeds with Doordarshan on top, all of BCCI's partners are in trouble - which means BCCI is in trouble.

Nimbus has been renegotiating with BCCI and there seems to be some agreement with them on reducing their $612 million, 4-year rights deal. Zee, in the meantime, desperate for cricket, had talked about a separate professional league. Now, Zee has announced that it is cancelling a deal with BCCI for telecasting overseas cricket matches organized by BCCI.

When cricket is played in any of the full member countries, the host controls the television rights. If International cricket has to be played in any of the associate or affiliate member countries, the respective cricket association in that country has to stage the matches and will, in turn, own the telecast and other rights.

IMG/TWI exploited this later concept and organized matches in Toronto. Canadian Cricket Association was the organizer namesake. IMG/TWI did everything and pocketed a neat profit and paid small monies to Canadian Cricket Association. Sharjah (UAE Cricket Association) was WorldTel's property, but later became Bukhatir's Taj Television's.

BCCI hit upon this wonderful idea of cutting out the middlemen, and become the event organizer abroad to maximise its revenues. Alas, the team's poor performance, greedy and mindless deal have all come together to roost now.

BCCI can survive only by hiring sensible corporate managers who are also kind and decent and build a sustainable business and not be corporate thugs, who bully bidders into submission. Because, when you fall - as in cricket you always fall - you won't have any friends left. Like it is now for BCCI.

ESPN-Star renegotiating ICC cricket deal?

There is a news item in The Economic Times that says ESPN-Star is looking at renegotiating the ICC cricket rights, which was pegged at around $1.2 billion.

The reasons quoted by the paper are:

• India's performance is poor, and the value of Indian rights is more than 70% of the global value.
• 2015 World Cup in Australia is non- prime time.
• Advertisers are looking for safety clauses in contracts (if favourite teams flop, if rain impacts the tournament etc.)
• Indian super stars will have retired by then (Sachin, Rahul, Saurav, Virender etc.)
• DD-Nimbus encryption problems.

I think this is complete garbage. Firstly, team performance is mostly cyclic. Australian matches, if day-night, will get into reasonable prime-time. Maybe, they can hold more matches in Perth than anywhere else:-) Current super stars will be replaced by future super stars.

I think, the real issue is that the price quoted is anyway high, irrespective of all the above reasons. ESPN should not have bid $1.2 billion.

The main problem I see is the Indian government legislation on sharing the feed with Doordarshan. That lowers the value of World Cup rights and other cricket rights. India cannot enforce such legislation on matches played outside Indian territory. So, it is upto ICC and other cricket boards to join the broadcasters and fight the Government legislation in the Indian courts.

Cricket World Cups and Cricinfo

The first World Cup after the advent of Internet was in 1992, in Australia and New Zealand. K.Robert Elz, known as 'kre' who was a fairly senior officer in the Australian Internet Setup would write a brief match report and the scorecard as on that point and will mail that to the newsgroup rec.sport.cricket. The same was broadcast across two email mailing lists maintained by Prof. Sankara Rao at North Dakota State University.

After this, Internet Relay Chat (IRC) was used to provide ball-by-ball text commentary. Cricket was perfectly suited for this. Cricinfo followed soon, in 1993, developed initially as an IRC bot by Simon King and then moved into Gopher and then the World Wide Web.

In time for the World Cup 1996, which was to be played in India, Pakistan and Sri Lanka, Prof. Sankara Rao was very keen to have live ball-by-ball upto-the-minute scorecards on Cricinfo. He approached Jagmohan Dalmiya, then heading PILCOM, the body that was staging the World Cup, and obtained the necessary permission. Dalmiya, with his usual bluster, said all arrangements have been made to collect scorecards from every venue through a complex network, set up by Puncom (A Govt. of Punjab undertaking), pushing the content to a media center in Kolkata (then Calcutta). And that, this can be taken to the Internet, but Cricinfo would have to make its own arrangements for the same.

The first match went on, but no connectivity could be established and in any case, when I looked at the scorecards that came from the wonderful network, it was in complete shambles. Names spelt a million different ways. No cricket statistician would look at those scorecards and accept them.

Cricinfo had a reputation to stick to. A South African, Jacques de Villiers, (perhaps along with a few friends) had developed a cricket scoring software called 'Dougie'. It was a Unix term based program. To record a ball event (either a run, or a wicket, or an extra), you just need to enter a few characters. That was it. The program updated the scorecard, changed the batsman facing the bowler now etc. The scorecard in the original version went to a Unix finger file. 'Fingering' was the mechanism by which one could follow the score.

After the PILCOM fiasco, Sankara Rao suggested that 'dougie' be resurrected and used for scoring the games. A cricket crazy Dutchman, Louis van Dompselaar, took the program, modified it and made it working well in time for the second match. The matches were available on satellite in US via KBS (later merged with Echostar). A chap (the name Ravi comes to mind, but now i cannot remember the name fully) convinced a motel owner in Louisiana who was getting the feed, got an Internet connection installed in the motel, and used dougie to score the matches. I pitched in, operating the software most of the time by taking the data from him through IRC. We had excellent scorecards in Cricinfo. It was an extremely popular site during that period.

Immediately after this World Cup, Cricinfo was incorporated as a private limited company in UK, with Simon and I as its directors.

Just before 1999 World Cup in UK, Cricinfo received commercial funding. A sports portal called sportal.com (then called Pangolin) brought in some money in early 1999, into Cricinfo. Dougie had improved substantially thanks to several others but most notably Travis Basevi (who still works for Cricinfo). Travis, an Australian, was flown to Chennai, and form there he provided running text commentary and scoring for most of the matches. Cricinfo took on the official site, run by the ECB and won hands down. By now, Cricinfo was quite commercial and was soon to receive couple of major fundings. First to invest was Michael Watt, a New Zealander, who had founded CSI - a television production company, which was later sold to Octagon. Then, in early 2000, SIFY, an Internet Service Provider in India bought out Watt's stake, and invested more moneies into Cricinfo.

2003 World Cup, played in South Africa (and Zimbabwe/Kenya) was another turning point in Cricinfo's history. Between 1999 and 2003 Cricinfo had gone through a cash crunch and a heart-aching restructuring. Wisden Group acquired a majority stake in Cricinfo and soon took 100% control of the portal. The deal happened right in the middle of the World Cup.

Since 1996, Cricinfo's World Cup coverage has been the best out there. No other entity has scaled up to providing a better cricket coverage. That apart, as I have detailed above, every World Cup has been a momentous occasion for Cricinfo - as a venture/company.

Now, 2007 World Cup is being played in West Indies. Who knows... there may be an interesting deal in progress.

Cricinfo
ICC's Cricket World Cup Official Site

[PS: I am not associated with Cricinfo anymore. I left the company in April 2005.]

Private FM players may be allowed to broadcast Cricket commentary

An article in Business Standard suggests that the government may allow private FM channels to broadcast cricket commentary. As of now, FM stations are not allowed to broadcast news. Cricket is certainly entertainment and not news, but for some reason since their inception radio stations were not allowed to broadcast cricket. It would be great if the government notification happens before the World Cup next week.

Nothing outstanding may happen for the current World Cup. We may only get the standard Hindi/English commentary. But in future, city based stations can offer cricket commentary in respective languages. This will generate more listeners and hence more revenues for the stations, and consequently more revenues to the rights holders and the BCCI.

Tamil channels coming on air in Bangalore

Indiatelevision.com reports that slowly some Tamil channels have been let in the cable networks. One cable operator commented:

"Even now, we don't want to antagonize the Kannada activists by starting all the Tamil channels at one go," said a cable operator, who did want to be named. "We will do it slowly, and maybe meet in a few days to take a decision on the matter, because the entire process of notification may take a long time. Why should entertainment be mixed up with politics?" he asked.

Cricket world cup internet deal

Indiantelevision.com reports that Maruti has taken up a sponsorship deal on ICC Cricket World Cup official website amounting to $1 million.

This is a huge deal as far as Internet advertising in India goes. There might have been larger year-long deals in the near past, but nothing probably comes close to this deal - $1 million for a little over a month, to a site which is unlikely to be as popular as well known cricket Internet destinations such as Cricinfo.

Ban on Tamil channels in Karnataka

Tamil Nadu and Karnataka are locked in a conflict in sharing Cauvery river water. A tribunal was set up in 1990 which gave an interim award in 1991. This resulted in anti-Tamil riots in Bangalore, some people were killed and several driven homeless.

The tribunal has come up with its final verdict this month (5th February 2007). Unlike in 1991, there have not been any riots or murders. But there is still a lingering problem where Tamil television channels have been off air since the announcement of the verdict.

India Television News

I consider this a very disturbing news. India has moved forward substantially from the tribal mindset in the pre-1990 era. Economic growth (though quite lopsided), has brought considerable plurality and appreciation for opposing viewpoints and cultural sensibilities.

Problems between states in a federal set up should not result in linguistic minorities being tortured in one way or the other. A band of Kannada extremists are holding cable TV companies to ransom and are enforcing this 'ban', and an elected government is unable to revoke the ban in a liberal democratic country.

Karnataka people have every reason to be angry at the tribunal's verdict and they should take up all legal measures to push their case ahead. But if the state, intelligentsia and Kannada speaking people allow the Kannada extremist organization to dictate terms on how to treat the linguistic minorities in their state, Karnataka state will remain in dark ages forever.

Cricket rights, BCCI and Neo Sports

Indian cricket allows for brash and innovative deal making. There is a lot of money riding on Indian cricket and poor management at all levels makes it very difficult to decide exactly what the size of the potential is. This results in heavy speculation.

No sports anywhere in the world has seen television rights value multiplying like the way Indian cricket has. A quick update of history here for your consumption. Before Jagmohan Dalmiya and IS Bindra started managing BCCI, Indian cricket matches were broadcast by state owned Doordarshan. Doordarshan made all the money (or none at all) and never thought of actually paying BCCI. Doordarshan probably thought it was its divine right to produce and broadcast cricket (and other sports) staged in the country. On its part, BCCI also did not know that it can ask the telecaster for a rights fee.

In 1993, BCCI for the first time tried getting a private broadcaster to produce matches (Hero Cup) and sell the broadcast to a private channel. This resulted in Doordarshan blocking the coverage by unfair means. Indian Customs was used to block the cameras from being taken inside the country. VSNL (at that time owned by the government), an uplinking company, was forced to not uplink the television signals. This resulted in a court battle, at the end of which it was established firmly that BCCI could sell cricket telecast rights.

India had started on a liberalisation process and private TV channels were coming to India, transmitting through satellite. Large dish antennae and cables strung over lamp posts were used to transmit the signals to homes. ESPN was in India, and so was Star Sports. Both these channels started looking at cricket as a big growth engine and started fighting amongst themselves and jacked up the rights fees.

Then, the two channels merged to create ESPN-Star Sports.

TWI negotiated a deal to bring Indian cricket on cable and satellite (C&S) television ESPN from 1995-1999. The five year deal was valued at approximately USD 5 million. This was also the period that saw Harsha Bhogle fronting cricket commentary for ESPN and technological innovation started coming into Indian cricket production.

ESPN-Star Sports also brought overseas cricket to India, matches involving India as well as matches between other teams.

This was the golden period for Jagmohan Dalmiya as he consolidated his position in BCCI. In between, 1996 World Cup happened, jointly organized by India, Pakistan and Sri Lanka (PILCOM) which was produced by Worldtel of Mark Mascarenhas. (Today Dalmiya is accused of embezzlement during that World Cup and has been stripped off his posts and memberships and is facing criminal prosecution.)

In the meantime, Dalmiya had squeezed himself into a powerful position in ICC as its President and set out his goal of generating money for ICC. Thus, he defined specific events for which ICC will hold rights and created the concept of ICC Championship Trophy (also called mini world cup). The 1999 World Cup held in England did not generate any income for ICC, but the subsequent Wills Knockout in Bangladesh did. Since then ICC events have been generating massive revenue. (The latest ICC global rights have been sold for around $1 billion to ESPN-Star Sports.)

When the Indian cricket rights were up for renewal in 1999, Prasar Bharati emerged as a surprise winner. The state-owned broadcaster agreed to pay the cricket board $54 million (Rs 227 crores) for five years (from Sep 1999 to Apr 2004). ESPN-Star Sports and other private players were beaten, and the rights fee jumped ten fold from $5 to $54 million!

Now Prasar Bharati set out to maximise its revenues. It ran the first series - India vs New Zealand - shoddily. Then, under Rajiv Ratna Shah, set out to generate massive income for the remaining 4.5 years of rights. It broke the rights into two parts - overseas distribution and India airtime rights, for the telecast in Doordarshan channels.

The airtime sales rights were picked up by an associate company of Zee Telefilms called Buddha Films, which bid a massive $120 million (Rs. 450 crores) for the same. Other bidders were TWI-Stracon and Nimbus.

TWI-Stracon, however won the overseas distribution contract by bidding $43.75 million.

Thus, within six months, Prasar Bharati turned the $54 million contract around for more than $160 million.

TWI, for its part, wrote into the contract just about everything it could, and created a funny thing called "multimedia rights" which was so poorly defined. Prasar Bharati thought it still had the "Internet rights" which it could sell further.

Prasar Bharati decided to offer non-exclusive Internet rights for all comers at "an annual license fee of Rs. 25 lakh" which included "scoreboard, analysis, graphics, stills (up to 30 frames per minute from the live signal) and interviews with players (this may include pitch report, weather report, interview on the captains, players and experts)." But it added, "if the license-holder, however, desires to have live and delayed streaming audio and video after obtaining the Internet rights from Prasar Bharati, it will have to approach Stracon-TWI who hold the multimedia rights.

In the end, none of the Internet portals bought the Internet rights from Prasar Bharati. But TWI found a sucker in PCCW's now.com and sold a bunch of things to them including live video streaming, some kind of extended highlights for their TV operation etc. for something amounting well over $26 million.

Then, when PCCW sort of collapsed, TWI brokered a deal selling the rights held by Now.com to ESPN-Star Sports. This resulted in ESPN-Star Sports running extended highlights for India matches (which ran for well over 3 hours for each day!). This resulted in Prasar Bharati suing them, and getting an injunction in the courts preventing ESPN-Star Sports from broadcasting these extended highlights.

TWI also ensured that PCCW's streaming rights (outside of whatever Prasar Bharati thought) were exploited properly, by teaming up with Wisden.com to offer serious commercial cricket streaming.

It was clear that when this set of rights came to an end, BCCI will look at getting even more from its rights and the fight for the rights will be acrimonious.

That is what happened, and a period of chaos ensued.

Dalmiya still had control over the BCCI. He was in charge of rights negotiations. ESPN-Star Sports was the front runner. Prasar Bharati was not going to get involved in the bidding game in a big way as it was pushing the government to come up with a legislation for any winning bidder to share the terrestrial rights with Prasar Bharati on a revenue-sharing basis. Sony Entertainment Television had acquired ICC rights during this period for a whopping sum. Zee was aggressively looking at expanding into DTH space. Both were going to bid. Ten Sports, another sports channel was also in the fray.

The BCCI bid document was quite harsh as it demanded substantial experience in showing International cricket in its channels for two years. In the end, Zee bid $260 million (Rs 1200 crores) for four years. ESPN had bid $230 million, Sony TV at $140 million and Ten Sports at $115 million. But the story did not end there. BCCI disqualified Zee's bid on technical grounds and invited ESPN for further negotiations.

This resulted in Zee going to court against ESPN and BCCI. Nothing happened for the next year or so. The courts ruled that till the cases were disposed off, Prasar Bharati will show the matches in Doordarshan and will keep an account of the money.

In between, a further rebid happened, further lawsuits, further chaos.

Then, a palace coup happened and Dalmiya was removed from BCCI, Sharad Pawar, a Union Minister won, and took control of BCCI. This resulted all earlier bids being withdrawn and a new bidding process put in place. Various cases were withdrawn.

In the meantime, the government had come up with broadcast regulation rules which stated that any private channel having telecast rights to any cricket event (whether staged within India or outside) must share the clean feed with Prasar Bharati for terrestrial broadcast on a revenue-sharing basis. Ten Sports contested this in courts and kept winning. Still, everyone thought the BCCI rights values will be lower because of government rules.

However, Nimbus came from nowhere to bid a massive $612 million for the next four years (March 1, 2006 to March 31, 2010) during which time there was a guarantee of 22 Tests and 55 ODIs to be played.

Thus, in three successive terms, the rights fee has jumped from $5 million (5 years) to $54 million (5 years) to $612 million (4 years).

Nimbus has taken a massive punt in bidding so high. The first series was shown on Sahara TV, a free-to-air channel. Subsequently, Nimbus launched its own channel called Neo Sports (and Neo Sports Plus), and showed the next two series there.

In the meantime, the government came up with an ordinance forcing private broadcasters to share the matches with Doordarshan. Nimbus refused and offered only a time-delayed (7 minutes) feed to Doordarshan. This prompted the government to issue a show-cause notice to Nimbus. On the other hand, TRAI - the broadcasting regulator attacked Nimbus' pricing policies. Four metro cities were being moved into CAS (Conditional Access System), where TRAI had mandated that each channel must be priced only at Rs. 5 (whether it is a sports channel or a movie channel or a nothing channel!), and in non-CAS areas, the pricing must be discussed with TRAI first and only with the approval of TRAI, the pricing can be enforced.

Nimbus had, in the meantime, done a deal with Star distribution to distribute its channels, and Star had promised a minimum guarantee of approximately Rs. 600 crores to Nimbus for the four-year period. The two channels were priced at Rs. 58.50 but TRAI hads slashed them to Rs 37.25 for non-CAS areas and Rs. 5 each for CAS areas. This is going to seriously impact Star and Nimbus' revenues. Another thing that will impact Nimbus' advertising revenues will be whether the government's ordinance can withstand judicial review.

The government is also trying to talk to BCCI and the channels in sorting out the sports broadcast ordinance. But BCCI will mostly side with Nimbus and sports channels on this one. A lot will depend on the judiciary now.

BCCI has, in the meantime, also created a new set of overseas rights, where it will conduct matches in neutral venues like Malaysia, USA, Dubai and so on. Telecast rights for such matches have been sold off to Zee for $ 219.15 million for five years (April 1, 2006 to Mar 31, 2011), during which time at least25 matches will be conducted.

BCCI and ICC have made a lot of money from Indian television channels. It is not clear whether the numbers can be justified in the long run though.

Vodafone's Hutch purchase

Vodafone has come out as a winner in acquiring the stake in Hutch held by HTIL, Hong Kong. HTIL is a publicly listed company which invests in various telecom companies across the world. Main shareholder of HTIL is Hutchison Whampoa group of Li-Ka Shing.

HTIL and Essar group of India have 67% and 33% respectively in Hutchison Essar Ltd. which runs mobile phone services across India under the brand Hutch. Hutch is one of the leading mobile phone companies in India, at the fourth position in terms of subscriber numbers after Bharti, Reliance and govt. owned BSNL.

About three months back, HTIL surprisingly decided to pull out of the venture and put up its stake for sale. The Indian operation amounts to a significant part of HTIL. Apparently HTIL felt that the telecom investments were turning out to be quite high in the competitive Indian environment. I think the main reason is HTIL's relationship with Essar which was going nowhere.

Hutchison Essar was supposed to go to the stock markets but that didn't happen because of internal fight between HTIL and Essar. The required investment for further growth could have easily come from the stock markets. The enterprise value at which Vodafone has acquired the stakes is about 18 billion USD or about Rs. 81,000 crores. A dilution of around 15% would have resulted in well over 10,000 crores from the markets for further investment. (This is the kind of number Vodafone is indicating it will spend. Bharti too will be spending only of this order.)

Essar is a difficult company to understand. Suddenly it seems to be flush with cash. It is into shipping, steel, telecom and what not. Essar even suggested that it will buy the 67% from HTIL. It still seems to claim it has matching rights to the stake held by HTIL, and if Vodafone doesn't agree to certain terms for the new shareholder agreement, Essar may invoke the matching rights clause or fight a legal battle. HTIL claims there is no matching rights clause in the shareholder agreement!

Vodafone may find dealing with Essar a difficult proposition. Essar does not seem to have a clear telecom strategy or the money and capability to execute on plans. If at all possible, Vodafone should try to buy out Essar completely, find some financial investors in India, and go IPO in Indian stock markets (since there is a limit of foreign holding in telecom companies in India).

Besides Bharti and Reliance Infocomm which are listed, Idea (of Aditya Birla group) has just now listed. Spice Telecom (operating in Karnataka and Punjab) has filed a draft red herring prospectus. BSNL, after a merger with MTNL, may also list.

Vodafone's purchase would also mean a complete rebranding. Hutch as a brand will go completely out of the country and Vodafone will enter India (and in my handset too!).