ESPN & Nimbus face graded ad rates

Advertisers Press For Differential Pricing, Initiate Talks For Protection Clause

INDIA’S disastrous World Cup showing has begun spilling over to ESPN and Nimbus — both of whom have cricket broadcast rights for the next eight years between them. Advertisers have initiated discussions with the two broadcasters, seeking differential pricing and factoring in protection clauses for buying on tournaments, on grounds of inconsistent performances by the Indian cricket team. That’s in complete departure from Sony Entertainment Television (SET), which sold airtime of over Rs 500 crore through bulk deals and combined Champions Trophy and World Cup. “It’s a case of once bitten, twice shy. Advertisers now want conditionality and protection, especially in case of big tournaments which involve several teams,” said Madison Communications CMD Sam Balsara. “The general bearishness towards cricket is prodding advertisers to move towards rationalisation of contracts. We are definitely talking on those terms, but it’s at a very nascent stage. In principle, every advertiser is looking at adding a safety clause, which includes differential rates. Besides, the mad rush over cricket has dissipated as advertisers are getting more cautious with their investments,” said Mindshare Fulcrum managing director R Gowthaman. Broadcasters say the issue of differential pricing will come with its share of benefits and drawbacks. Said ESPN Star India MD RC Venkateish: “We don’t have a problem if advertisers want to negotiate rates and play it safe, so long as we get our revenues. If they are looking for downside protection, they will also have to pay a premium for the upside as well.” While admitting that the Caribbean debacle has put off smaller advertisers and fringe buyers, Venkateish pointed out that ESPN hasn’t witnessed attrition of rates. “We’ve signed up four advertisers for the upcoming India-England series at the same rates we were negotiating before the World Cup began,” he said. Nimbus maintains that differential pricing is barely of any consequence to the channel since it has rights for the home series’, and India’s winning or losing would not matter since the team would play all matches. Said Nimbus CMD Harish Thawani, “The issue is being over-hyped on the back of just one loss, and the intention is just to depress cricket prices. From a domain point of view, cricket is still the best converter for intention to purchase, and is the only programme on air that has the highest break ratings.” Meanwhile, the incumbent ICC rights holder, SET India’s EVP (sales), Rohit Gupta said, “No broadcaster will agree to differential pricing to be included in contracts. The broadcaster’s fortunes is not dependent on India’s performance and they have to factor in acquisitions costs. Unless the ICC is willing to give some rebate to broadcasters, such a concept is unworkable and any broadcaster who agrees to this, is asking for serious trouble.”

Courtesy: EconomicTimes

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