ESPN-Star hopes to rake in $2.7 bn

ESPN-Star Sports, which has won the broadcasting rights for the International Cricket Council-organised World Cup with a bid of $1.15 billion (beating rivals Nimbus and the Zee-Ten Sports combine), can earn at least over $200-300 million annually from its cricket properties just by selling advertising space at current prices.

However, with advertising rates going up by 10-15 per cent annually, together with a premium attached to World Cup properties and revenues from other sources like direct-to-home, Internet protocol television and mobile TV among others, the revenues could be much higher.

This means the channel could garner over $1.8-2.7 billion from cricket advertising alone in the next 8-9 years: a sure money-spinner, despite many competitors saying it has over-paid for the rights by quoting a price which was over 25 per cent higher than the second highest bidder's (Nimbus bid around $900 million while Zee bid $850 million).

"We will have over 120-130 days of cricket every year for the next 8-9 years, which, apart from the World Cup, includes India's matches in England, Australia and the Asia Cup, among others. The World Cup is designed in such a way that there will be one mega cricket event every year for the next eight years. We are so choc-a-bloc with cricket that we have to adjust our schedules," RC Venketeish, managing director of ESPN Star Sports, told Business Standard.

The World Cup deal will give the channel over 570 days of cricket, which includes over 130 days of two World Cups (2011 and 2015), 45 days of two Champions Trophies and 96 days of the popular World Cup 20-20 over tournament.

Venketeish said he expected the number of World Cup days to go up to around 166-190 because the International Cricket Council was planning to enrol more members. It will also telecast the Women's World Cup and under-19 cricket. It also till 2008 ,95 days of international cricket featuring India in Australia and England apart from the Asia Cup.

The price is also not audacious because at the last World Cup deal Global Cricket Corporation, a Rupert Murdoch company, had paid around $550 million for the same deal. However, the deal came with only 270 days since it did not include the new 20-20 World Cup format.

The channel estimates that sports channels earn over $2.5 million as advertisement revenues for a one-day game and $0.5 million a day for a cricket match.

"However, we expect their revenues to rise dramatically especially because the television ratings of soap operas are getting fragmented and new forms like 20-20 cricket are earning huge ratings," said Venketeish.

For instance, the recent 20-20 one-day international between India and South Africa garnered television ratings that were higher than any other event, including one-day international matches. Television ratings of serials, which used to be over 11, have now fallen between 6 to 8, showing fragmentation in that space.