The Hindu Business Line : Bidding discipline in cricket rights

Zee Telefilms' acquisition of a 50 per cent stake in Ten Sports is expected to usher in consolidation and bidding discipline in the sports telecast space. With fewer players competing in this lucrative arena, there is likely to be greater discipline in the bidding process for cricket telecast rights.

If the past is anything to go by, Zee has been one of the aggressive contenders in bidding for cricket rights, as it was pitted against experienced telecasters such as Sony, ESPN - Star Sports and Nimbus Communications. Zee Sports suffered an initial setback in 2004, when the Board of Control for Cricket in India cancelled its rights to telecast the Indian cricket team's home matches through 2008.

ESPN-Star Sports had challenged Zee's $300 million bid for the rights, citing its inadequate experience in sports telecasting. The bid had been considered expensive at the time and far higher than the next highest bid from Sony Entertainment. Earlier this year, Zee got its foot in the door when it won the rights to telecast one-day matches that the Indian team will play in neutral venues, by bidding more than $200 million.

With the acquisition of the stake in Ten Sports, Zee will now be able to bid from a position of strength and, therefore, may refrain from making the kind of aggressive bids that it has made in the past to stay in the bidding game. In turn, this could have a salutary impact on the overall bidding process.

The International Cricket Council has invited bids for rights to telecast cricket matches over the next eight years, which would include two World Cup tournaments. With the acquisition of Ten Sport's stake, Zee might have improved its chances of bagging these rights.

If they succeed, the purchase tag of Rs 250 crore may turn out to be a small price to pay considering what Zee would otherwise have been willing to fork out for these rights.

More Stories on : Mergers & Acquisitions | Sports | Radio/TV | Zee Telefilms Ltd

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