This gains further credence from two other developments. Earlier, it was said, there were too many investors chasing too few stocks, which was, the rights to telecast matches controlled by the Board of Control for Cricket in India.
Zee and Ten Sports have come together and Set Max is understood to have lost interest in cricket after telecasting the World Cup. Doordarshan need not bid since a recent law passed by the government gives it free the feed for all cricket matches involving India, dubbed events of national importance. That leaves only ESPN-Star -- the former rivals came together in a joint venture a few years ago and the new kid on the block, Harish Thawani's Nimbus, as the serious contenders.
"The correction has already set in over the last 2-3 months. Since it is down to two players now, the balance of liquidity and stock has been reached. A 10-15 per cent correction (decline in value) is inevitable," says Nimbus chief Harish Thawani, who has cited the absence of the top players from the Afro-Asia series as the reason for his company's withdrawal. The other development is the fall in viewership of cricket matches in the aftermath of India's dismal performance in the World Cup. In spite of the tour to Bangladesh being hyped up as the turn of a new leaf, the series has not exactly broken viewership records.
Interestingly, some time ago, just before Nimbus bagged the rights to matches in India played till March 2010 for an unheard-of $612 million, the broadcasters had rejected a proposal moved by one among them to agree not to bid too high.
Expectedly, advertisers are refusing to pay the high premium that cricket has always commanded. The thinking among them is that most sales targets can be met by advertising on other shows and channels for one-fourth the cost. Many of them are also looking at other sports, such as golf.
Zee, whose bid of $530 million for the India rights had finished second to that of Nimbus', is going through intense soul-searching.
"This is only an affirmation of what we had said earlier, that the bids were stretched beyond business sense. Not that money is a problem, but the bid that we had made, while attractive, was adventurous. We made it because we have multiple revenue streams to recover the money," says Ashish Kaul, senior vice-president (corporate brand development), Zee Network.
Many now agree that the third finishing bid, of $402 million by ESPN-Star, was actually the one that offered the true value for the rights.
Both Nimbus and Zee cite the mandatory sharing of feed with Doordarshan as a big spoilsport.
"Taking away exclusivity kills the subscription revenue," says Thawani. And who would pay a higher rate when ad spots are available cheap on Doordarshan's pan-India network.
