Tuesday, January 23, 2007

Cricket: Nimbus vs. Prasar Bharathi - Decision Subverts Commercial Contracts

Nimbus and Prasar Bharti (Doordarshan) have arrived at some sort of understanding over the broadcasting rights for the ongoing India-West Indies One Day series. Nimbus has offered to give a seven-minute delayed feed to Doordarshan and All India Radio after much pressure from the Government:

Private broadcaster Nimbus Communications Ltd agreed in court on Tuesday to share advert-free feed of the remaining games in the India versus West Indies cricket series, but with a seven-minute delay. The government ordered Nimbus on January 19 to share its live feed with state-run Prasar Bharati, saying the matches were a matter of national interest in cricket-mad India.
This story would make you laugh, but it is a very serious story in national interest - the interest of how the Government will not think twice to subvert commercial contracts if there is some pressure on the Government. But nowhere do I even venture to say that the Government is in the right.

How did this whole issue evolve and what was the history behind it? The BCCI (a private body) awards contracts for TV coverage of its series. This is a highly lucrative business that has been bringing in an increasingly massive amount of money for BCCI, as well as for the company that picks up the TV rights (through advertising), but Prasar Bharti does not want to spend the amount of money that it will need to pick up the rights.
This has happened in the past, when Ten Sports had some rights and was trying to show it exclusively. Due to intervention by the courts and the Government, Doordarshan got the rights to show the cricket series alongside Ten Sports. In this process, not only did they show the matches, but they actually showed their own ads and earned a fair amount of money. Downright looting that no one would tolerate if this was happening to a company that they own. This is a gross violation of property rights and commercial contracts.
I would submit that cricket is not a national interest matter, it is certainly not of the type where not sharing the broadcast feed is 'unpatriotic,' as the minister termed it. If the government is so concerned, it should step in when the BCCI is drawing up the rights contract mandating that the feed needs to be shared with Doordarshan. This will enable the contract value to be then correctly estimated.
It is painful for fans to not see the matches, but cricket is a game, and the showing of the matches is a pure commercial transaction, just like being able to view the US Open or a Golf tournament where Jeev Milkha Singh is playing. To pretend that the legal position changes because more people are interested in watching cricket than other sports is wrong.

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posted by Ashish Agarwal @ 9:43 PM