BackCricket cancellations deliver big blow to TV, advertising industry
Cricket cancellations deliver big blow to TV, advertising industry
PremiumSigning out: England Cricket Board’s MD Hugh Morris (R) and Andrew Walpole, media manager of the team, at a news conference to announce their decision on the team’s tour of India in Bhubaneswar on Thu
New Delhi: The cricket boards of England and Australia suspended their tours to India on Thursday after terrorist attacks in Mumbai, delivering a stinging economic blow to already struggling broadcasters, who were counting on advertising around India’s most popular sport.
“England has called off its (remaining) tour (of) India and the Champions League, scheduled to start on 3 December, has also been postponed indefinitely," confirmed Dhiraj Malhotra, tournament and marketing manager for the Board of Control for Cricket in India (BCCI).
The rights to the England tour and Champions League were held by Neo Sports Broadcast Pvt. Ltd and ESPN Software India Pvt. Ltd, respectively.
Neo had bought the broadcast rights to India matches for the next five years for $612 million (nearly Rs3,060 crore), while ESPN Star Sports had spent $975 million to buy Champions Trophy rights for the next 10 years.
Though the contracts signed by both broadcasters provide for compensation in case of termination of matches, the duo still stands to incur significant losses.
With India first defeating Australia and then handing England a massive drubbing in the one-day series that was under way, Neo had recently increased the rates for a 10-second commercial spot to Rs3-3.75 lakh from Rs2-2.5 lakh last week, to take advantage of an impressive viewership.
“We were expecting an upside in spends after the successful India-Australia series. There will be a loss in revenue," confirms Abhishek Verma, head (marketing and communication) at Neo.
A senior executive at a leading media house said the broadcaster is likely to lose around Rs35 crore on account of one-day matches and Rs5 crore for the five-day Test matches.
ESPN Star Sports stands to lose Rs40 crore it spent on the marketing campaign it had launched early this month to build hype around the Champions League.
The cancellations come at a particularly bad time for the Indian media, which has seen a sudden and huge drop in advertising revenue as an economic slowdown took hold.
Some industry experts say the terrorist attacks will deliver a crushing blow to the advertising industry as well.
“Cricket was the only recession-proof property where advertising spends were actually going up. With international cricket boards pulling out of on-going cricket events, the media and advertising industry is really going to suffer," predicts Hiren Pandit, managing partner of GroupM ESP, the entertainment, sports and partnerships division of media buyer GroupM.
Adds Sam Balsara, chairman and managing director of communications group Madison World: “This is not a good sign for the media and advertising industry because the attacks come against a backdrop of a slowing economy and this will further add to the negative signals being sent out to the consumer, which the industry could pick up as cues and get even more cautious."
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