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The secret of Nimbus' success
Shyamal Majumdar | April 05, 2006
His diamond earstuds glisten as the sun peeps through the window overlooking the sea at the Ming Yang restaurant on the first floor of Taj Lands End at Bandra. It's perfectly in sync with Harish Thawani's "bright mood", as we settle down for lunch on a lazy Saturday afternoon.
The executive chairman of Nimbus orders beer for both of us and says he is eagerly looking forward to the first Sunday in nearly four months when he will not meet any clients, writes
He was an accomplished chess player and could have made it to the national ranks if he had the money. During college days, he used to earn "big money" (Rs 300-400) by fixing the Wi-Fi systems of some of his rich classmates. The son of a development manager at the Life Insurance Corporation, Thawani says he was quite happy to get a break in the advertising world (Lintas, Chaitra Leo Burnett) and its "middle class" salary soon after doing his graduation in economics from Bombay University.
Twenty years later, Thawani hopes Nimbus, which was founded by him in 1987 as an advertising company, will cross the $1-billion mark in sales within the next four years, from around $250 million now. That's a long way from the early 1990s when his only claim to fame was Superhit Muqabla, a countdown show.
Till a few years ago, his "middle class mindset" was quite content with the Rs 100-crore (Rs 1 billion) sales figure that Nimbus achieved. But a chance meeting with steel tycoon Lakshmi Mittal in London - where the two started discussing their common passion about sports - changed his outlook forever.
"I learnt to dream big. I was only too happy at that time if Nimbus could achieve a 25 per cent growth in its annual turnover. But here was an Indian who dreamt of ruling the world in the business he was operating in. On my way back to the hotel, I asked myself the simple question: why can't I also dream big - really big? I just refused to think small any more," says Thawani.
That's perhaps the reason why his office did not throw any party even when Nimbus stunned everybody by winning the four-year contract for the cable, broadband and direct-to-home rights of cricket for an eye-popping $612 million (Rs 2,755 crore). "For us, the deal was no great shakes. It had to happen as we had worked out our numbers well in advance," Thawani says with a straight face.
He's a strict vegetarian and orders a Cantonese fried rice and bean curd, and I settle for a garlic chicken with steamed rice. But what about the criticism that he has paid a price which just isn't worth it? That's a question he was perhaps waiting for. Thawani rolls up his sleeves and starts rattling off figures that serve as astonishing pointers to the growth of cricket rights.
The Indian television rights for the 1992 Cricket World Cup were licensed to Nimbus for $525,000. By 1999, this had grown 24 times to $12 million. In 2000, the International Cricket Council awarded to the WSG-Nimbus alliance rights for two World Cups and four Champions Trophy events at $550 million.
The 2003 World Cup itself derived $75 million TV revenues from India alone - a rise of over 150 times in 10 years and a rise of over six times in four years. The 2007 World Cup is expected to derive licensing revenues from Indian television alone of over $200 million - an almost 300 per cent rise over the last World Cup.
Thawani seems unstoppable now and says his bid was predicated on the fact that cricket is the biggest entertainment asset in India. Its sustained ability to power TV ratings outperforms any movie or soap opera. Cricket's break viewership at 96 per cent of match viewership is twice as high as that of any other TV programming. "No other sport in India comes even within 1/100th the viewership of cricket," says Thawani.
The food is the standard five star fare and Thawani doesn't show much interest. He declines dessert as "it will surely put him to sleep", but seems to be in a mood to talk. He gives credit to Sourav Ganguly (for the aggression he brought into the game and Indian cricket's huge leap under his leadership) and Sachin Tendulkar (whom somebody would go miles to see) for the astonishing rise in the game's popularity among the Indian diaspora all over the world.
There's more. The emergence of four DTH platforms by end-2006 would provide a robust new stream of licensing revenues. Nimbus, he says, is exceptionally strong in overseas rights syndication and its edge in those markets alone gives it a 10-15 per cent financial superiority over other sports marketing agencies or sports broadcasters.
For instance, most bidders estimated revenues of $75-85 million from international markets, while Nimbus has already crossed sales of $120 million and will probably achieve $135-140 million over the four-year term.
"Cash is not a problem. Time is," Thawani says. There is no doubt in that. As if selling the ad spots and tying up deals all over the world aren't enough work already, Thawani is also leading a move to acquire a TV channel in partnership with a strategic investor and plans to dilute his stake in Nimbus further to raise around Rs 500 crore (Rs 5 billion).
It was only a few months ago that 3i, a UK-based private equity and venture capital company, picked up 33 per cent stake in the media company for around Rs 200 crore (Rs 2 billion), bringing down Thawani's stake in Nimbus from around 85 per cent to 54 per cent.
As we walk towards the foyer where his silver-coloured Merc is revving up, Thawani says the reason why he has banked so heavily on cricket for a livelihood is simple: India is the new cricket superpower as it provides between 60 and 80 per cent of world cricket revenues.And his greatest satisfaction is that Nimbus has finally shown that it can beat the world. Not bad going for somebody who, by his own admission, was a "middle class failed sportsman" till a few years ago.
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