Sony to make good Rs137 cr IPL loss as Big TV backs out

Sony to make good Rs137 cr IPL loss as Big TV backs out
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First Published: Fri, Feb 27 2009. 12 14 AM IST

 Money play: An IPL Twenty20 match between Mumbai and Rajasthan during the first season. The sponsorship controversy erupted two weeks ago when Reliance Big TV threatened to walk out of the contract.
Money play: An IPL Twenty20 match between Mumbai and Rajasthan during the first season. The sponsorship controversy erupted two weeks ago when Reliance Big TV threatened to walk out of the contract.
Updated: Fri, Feb 27 2009. 12 14 AM IST
New Delhi: The sponsorship fracas between the management of the Indian Premier League (IPL), Reliance Big TV and Multi Screen Media Pvt. Ltd (MSMPL) has already had more twists and turns than a Twenty20 cricket match. And now there is another twirl in the story.
Money play: An IPL Twenty20 match between Mumbai and Rajasthan during the first season. The sponsorship controversy erupted two weeks ago when Reliance Big TV threatened to walk out of the contract. Shahbaz Khan / PTI
MSMPL, the broadcaster that beams the Sony bouquet of television channels, has agreed to pick up the tab for a Rs137 crore loss that IPL faces after Reliance Big TV walked out of a deal for advertising rights at the various grounds that the IPL matches will be held. Reliance Big TV said it did so after MSMPL signed its rival, Airtel Digital TV, the direct-to-home (DTH) arm of Bharti Airtel Ltd, as its on-air sponsor.
According to three people close to the development, IPL asked MSMPL to compensate it for the entire amount by picking up the rights for the on-ground sponsorship. These executives said MSMPL may, in turn, sell the rights to a sponsor and recover these extra costs.
“Sony (MSMPL was earlier known as Sony Entertainment Television) has agreed to compensate IPL for Rs137 crore on account of the loss of Reliance Big TV,” said a senior IPL executive. “They are going to find an on-ground sponsor now.” The executive did not want to be named because it was a “confidential arrangement between IPL and Sony”.
Reliance Big TV is the DTH arm of the Reliance-Anil Dhirubhai Ambani Group.
Another executive from a media-buying company involved in the sponsorship deals with IPL also confirmed the development. “Sony will now have to find buyers who would agree to pick up the deal at the said price to make the arrangement good,” he said, requesting anonymity.
These executives also said that Reliance Big TV was no more in the reckoning now. “They (Reliance Big TV) are out...they were asking for an on-air deal along with the on-ground sponsorship and that wouldn’t have been possible,” said the IPL executive.
MSMPL, which already has Big TV’s rival Airtel Digital TV as an on-air sponsor, said having both the companies as sponsors would not have been possible. “They (Reliance Big TV) can come on board as a regular advertiser, but they can’t be a sponsor,” Rohit Gupta, president (network sales) at MSMPL, had told Mint last week.
The entire controversy erupted two weeks ago when Reliance Big TV threatened to walk out of the on-ground sponsorship contract signed with IPL for Rs137 crore. The company’s argument was that on-air sponsors get more visibility than on-ground sponsors, hence, rival Airtel Digital TV had an advantage over them. “The deal was not fair to us,” a Reliance Big TV spokesperson had then said.
On-ground sponsorship allows the sponsor to advertise its logo on the cricket grounds as well display its billboards across the stadiums, whereas on-air sponsors get to air their advertisements in the commercial breaks during the telecast of the event.
IPL, which is struggling to find sponsors for two of its vacant on-ground slots, then, asked MSMPL to compensate it for the loss.
Another senior executive of a media-buying firm said MSMPL may now bring in its existing sponsors to pick up the on-ground deal.
“As of now nothing is final except... Airtel, as of now, is the on-air sponsor...but it is a natural choice for them (Airtel) to get on the ground as well...but nothing is final yet...,” said Sam Balsara, chairman and managing director of Madison Communications Pvt. Ltd, the media buying agency for Airtel.
Airtel refused to comment on the issue.
According to various media buyers involved in discussions with the IPL management and MSMPL for sponsorships and advertising, no new deals are happening right now, because of the cautious approach adopted by advertisers in the wake of the ongoing economic slowdown on the one hand and exorbitant prices quoted by both the partners on the other.
“Last year, IPL had sold on-ground sponsorships for $5-6 million (around Rs25-30 crore today), while this year, they are asking for about $7 million,” said a media buyer. “Likewise, MSMPL had sold presenting and associate sponsorships for Rs18-22 crore, whereas this year they are asking for Rs30-35 crore.”
MSMPL’s Gupta declined to comment on the new development. An email sent to IPL chairman Lalit Modi remained unanswered till late Thursday evening.
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First Published: Fri, Feb 27 2009. 12 14 AM IST