Bubble bursts, reality bites ad rates, It’s a losing bet after brickbats
INDIA’S stunning loss in the first round of World Cup 2007 will pummel ad rates for cricket, force broadcasters to temper their frenzied bidding for telecast rights and bring about a significant price correction, industry executives said. Whether it is advertising rates to sponsorship deals leading to the acquisition cost of cricket the game is going to witness a significant beating, thanks to the World Cup 2007. “It is about time realism in cricket sets it. It is no longer value for money, and is gamble that’s bound to fail,” said a top media professional. With India’s next series scheduled in May where they tour Bangladesh, followed by their tour to England in June, media professionals opine that ad rates will definitely drop by 25%-30%. If today an India match garners close to Rs 1.25 - 1.50 lakh for 10 seconds, the price is poised to plummet down to Rs 90,000 - 1,00,000. Apart from the price corrections, the general interest among the advertising community has also been hit with most of them burning their fingers on the World Cup. “It will take a lot of effort to get advertisers on board for cricket for some time. India not making it to the Super 8’s has led to 50-70% dip in viewership, which means high impact loss for advertisers,” said Mindshare Fulcrum director trading services Amol Dighe. Business plans of a lot of cricket boards will also be affected with telecast rights of close to five cricket boards coming up for renewal at the end of the year. Broadcasters will be a lot more cautious with their bids, as cricket no longer seems to be a sought after commodity. With the Rs 400 crore that is spent annually on cricket in non-world cup year, broadcasters are going to find it a mammoth task even to break even, forget making profits. Nimbus won the BCCI contract in 2006 for a whopping $612 million, and ESPN won the ICC rights for the next eight years for $1.1 billion. Going by the escalating acquisition costs of cricket, advertising prices need to grow in tandem, and hit the Rs 3.5 - 4 lakh mark for 10 sec to emerge successful. However, with the scenario reversed, broadcasters will be bleeding. For this World Cup though, advertisers are already trying everything to get some kind of relief from Sony. Negotiations have begun, and sources state that Sony will review the case depending on the size of the outlays of the client and its relationship. For Sony, the notional loss is Rs 70-100 crore, which would have accounted for 25% of the inventory that was set aside for high value spot buys.
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