BackPrasar Bharati seeks more ad revenue from private channels
To increase its share of revenue, Prasar Bharati is seeking an amendment in the Sports Broadcasting Signals Act of 2007
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New Delhi: In what may jeopardize the business prospects of private television channels, public broadcaster Prasar Bharati has approached the information and broadcasting (I&B) ministry seeking an increase in its share of advertising revenue realized from a sports event to 40% from the current 25%.
Currently, the public broadcaster is entitled to 25% of the total advertising revenue realized from sports events of national importance while the rest 75% remains with the broadcasting rights holder (read a private channel), according to the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007.
To increase its share of the revenue, Prasar Bharati is seeking an amendment in the aforementioned Act.
The law mandates private broadcasters to share live broadcasting signals of sporting events of national importance with Prasar Bharati simultaneously, to enable the public broadcaster to re-transmit the same on its terrestrial networks and direct-to-home networks.
“We will make an appeal to the secretary (at the I&B ministry) that this amendment should be brought about which will allow Prasar Bharati to keep 40% of the revenues, leaving 60% with the rights holders," said Jawhar Sircar, chief executive officer at Prasar Bharati.
The broadcaster is planning to take up the matter in its next board meeting due this month and has already sent the proposal to the ministry.
The public broadcaster also plans to demand compensation from Star India for the loss incurred by Doordarshan due to an embedded commercial TV feed it provided in 2012. The feed was for the India Australia Sri Lanka cricket tri-series held in 2012.
For these matches, Star had not removed its channel logo, and certain on-screen credits which Star contended were inserted by the event organizer International Cricket Council.
Prasar Bharati’s argument is that according to the ad rates of Doordarshan (at ₹ 15,000 per 5 seconds), Star India owes ₹ 3.4 crore to the public broadcaster for the embedded commercial feed provided during the live telecast of the 13 matches.
Prasar Bharati has been emboldened after the Supreme Court ruled in May that broadcasters of important sports events must provide a commercial-free feed to Prasar Bharati.
“Now that the court has come with its verdict, we will be referring this matter to our counsel. According to our calculations, Star has to pay us some money and we will be sending a letter to Star as per the advice of our counsel," said P.K. Subhash, additional director general at DD Sports.
Star Sports CEO Nitin Kukreja declined to comment.
Rohit Gupta, president of network sales at Sony Pictures Network said Prasar Bharati’s request to increase the revenue share is unfair.
“The value of broadcasting rights is going up and the money is entirely paid by the private broadcasters. As it is, the private broadcasters are sharing 25% of the revenue which itself is a large amount. It can’t go beyond that," he said.
Star Sports is the official broadcaster of the upcoming Rio 2016 Olympic games (starting 5 August) for the Indian subcontinent. According to the rules, Star India will be sharing the feed provided by the International Olympic Committee with Doordarshan.
The private broadcaster is expected to air more than 3,000 hours of sporting action across eight Star Sports channels (four in standard definition and four in high definition) and its digital platform Hotstar.
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