Zee Sports confident of bridging cost-revenue mismatch

ZEE Sports, having bagged the rights to telecast the next 25 limited overs cricket matches involving India on neutral grounds, says it is confident of bridging the anticipated gap of just under Rs 30 crore between the cost of telecasting each match and the maximum advertising revenue that may accrue.

The broadcaster has paid theBCCI about Rs 992.4 crore for the rights. Adding on the cost of equipment, uplinking, downlinking and marketing, it will be required to raise about Rs 41 crore per match to break even.

On the other hand, the peak air time sales for high profile matches in the past, like those against Pakistan, have seldom crossed Rs 10-12 crore. To make up the shortfall, Zee is banking on deals with other broadcasters, Doordarshan in India and others overseas, sale of radio, DTH, and new media rights.

"We will make money on the deal as we expect the property rights of television, radio, direct-to-home, Internet, etc, to rise very rapidly "� some even by 50 per cent. There could be newer media, too, among the revenue streams like broadband and pay-per-view television," said Gaurav Seth, vice president - marketing, ZEE Sports.

The government's dictat that the feed be shared with Doordarshan, with 75 per cent of the ad revenue raised by DD going to the rights holder, could be a boon, as it will double the spots for sale, though not at the same rate.

Things will become clearer as the response to Zee's rate card for two Indo-Pak one-dayers of the DLF Cup this month in Abu Dhabi, pours in. It is charging Rs 3 lakh for a 10-second spot, while Doordarshan is charging Rs 2.5 lakh, of which 75 per cent will go to Zee.

"It is a little steep as the industry average is about Rs 1.5-2 lakh per ad slot. For matches like India-West Indies, it could even be as low as Rs 50-60,000 per slot," explained another analyst.

Others involved with the business say Zee's task is akin to climbing a mountain that is high, but not insurmountable. Sundar Raman, general manager of media buying agency MindShare, says it is not impossible to recover the cost as new revenue streams mature with time.

Zee's payout too is graded. It will pay Rs 24.30 crore per match in the first year, Rs 27.13 crore in the second, Rs 29.70 crore in the third, Rs 36.49 crore in the fourth and Rs 81 crore in the fifth. In this scenario, the global rights sale could be crucial "� given the neutral nature of the venue, there will also be a local broadcaster seeking the rights.

For instance, Zee has just agreed on a deal for the upcoming DLF Cup with PTV of Pakistan for terrestrial and with Ten Sports for Cable & Satellite homes.

Hum FM would provide the live radio commentary in Pakistan and the Middle East while in Singapore, the matches would be available on Star Hub.

For the Malaysian and USA territory, agreement has been struck with Astro All Asia Network and Echostar Satellite respectively. In the UK, Europe, Middle East and South Africa, the matches will be broadcast through Zee International feeds.

"They can expand into newer geographical markets where the revenue realisation currently is sub-optimal and even acquire greater penetration," says Raman. Zee, which has been trying for long to get a foothold in cricket broadcast, is also counting the intangible gains.

"It is a massive brand building exercise for ZEE Sports which would catapult it "� the newest kid on the block "� into the big league," said a ZEE Network executive. And then there is DTH, in which Zee was an early entrant with Dish TV.