Press Release

How Star grabbed BCCI media rights for six years

20 May 2012

Star India Pvt Ltd used its money very smartly, and exactly when and where it was required, to win the prestigious BCCI media rights for six years, from 2012 to 2018.

Star's smartest move came when it outbid Multi Screen Media (MSM), Singapore, by a mile in the second rights period (2014-2018) compared to the first one (2012-14), in which the winning company offered only 'slightly more' than the previous rights holder, Nimbus.

The Rupert Murdoch-owned STAR bid Rs3,851.52 crore overall while MSM quoted Rs3,700.032, losing the race by a huge difference of Rs151.788 crore. The overall reserve price for the six-year period was Rs3,216.75 crore.

STAR India Pvt Ltd used its money smartly to win Indian cricket’s media rights for six years
Star will get to telecast a total of 96 matches - Tests, One-day Internationals, and Twenty20 Internationals - during the sixyear period. The winner was chosen on the basis of the combined bids for the two periods - comprising a two-year and a four-year period. 

BCCI smartly split the media rights bid into three segments - TV, internet, and mobile - and bundled the six-year period to maximise income. The strategy worked well as the Board will now earn Rs7.61 crore more per international match, compared to Rs32.50 crore that Nimbus was paying.

BCCI usually allots four-year media rights deal. But in this case the first period was only of two years because that was the time left in Nimbus's four-year contract that was terminated midway, in December, for regularly defaulting on payments, according to the Board.

Five parties - STAR India, ESPN Software India Pvt Ltd., MSM, Zee Entertainment, and Times Internet Ltd. - bought the bid document, which cost each one `5 lakh, but eventually only STAR and MSM bid.

For the first rights period, STAR bid just Rs27 lakh more (Rs871.02 crore) than the BCCI's reserve price of Rs870.75 crore, as per BCCI records.

In comparison, MSM bid Rs169.884 crore more, probably thinking that its rivals would bid more on the two-year period. An interesting part of STAR's bidding for the first period was that it quoted exactly the same amount as the base price for internet (Rs50 lakh) and mobile (Rs50 lakh) and a mere Rs1 lakh more for TV (Rs31.25 crore). MSM quoted much more than STAR, but fell short of its rival's bid where it mattered - the second rights period.

In the four-year period too, STAR played the numbers smartly and bid exactly the same as the reserve price for mobile while MSM quoted more. However, STAR won the race by bidding more money than its rivals. Each bidder placed its bids in two separate envelopes.

'The first envelope contained the documents that fulfilled the eligibility criteria that was required by the ITT (invitation to tender) while the second one contained the financial bid,' an official who attended the marketing committee meeting last month told Mail Today.

'A BCCI team comprising M/s Amarchand & Mangaldas and legal counsels opened the first envelope to evaluate the eligibility criteria before a special technical team checked the bids for internet and mobile rights,' he said.

'There was a break in the meeting to enable BCCI's legal team study the bidders' qualification. Once the house was satisfied that the two had fulfilled the eligibility criteria, the financial bids were then opened and the legal team tabulated their figures. Also, both bidders submitted a 'performance deposit' of Rs30 crore, as mentioned in the ITT.'

After the two envelopes were opened, the bidders were asked to go out to enable the BCCI members discuss the two bids and take a decision on the winner.

Source: Daily Mail UK?

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