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Rediff.com  » Business » Nimbus seeks one-third cut in cricket fees

Nimbus seeks one-third cut in cricket fees

March 21, 2007 10:21 IST
Nimbus Communications, the telecast rights holder for cricket matches in India for five years, has proposed a one-third reduction in the fee by $180 million. 
 
As per the current arrangement, Nimbus Communications has to pay the Board for Control of Cricket in India $612 million or about Rs 2,755 crore (Rs 27.55 billion) for the five year period (2006-2011). 
 
A meeting between the BCCI and Nimbus Communications will take place in Mumbai tomorrow. If accepted by BCCI, Nimbus will have to pay about Rs 2,000 crore (Rs 20 billion) instead of Rs 2,755 crore, for the five year period, sources said.  

Nimbus's demand is a direct result of the law enacted by the ministry of information and broadcasting that makes it mandatory for all private sports channels to share their signals with Doordarshan on all platforms. 
 
Nimbus claimed that unencrypted signals used by Doordrshan were being picked by operators in West Asia and South-East Asia illegally. 
 
This is affecting Nimbus's business as well as its tie ups with broadcasters in these countries. 
 
Last year, Nimbus is understood to have paid over Rs 350 crore (Rs 3.5 billion) as part of the fee to BCCI. For 2007, the company has to pay Rs 900 crore or Rs 9 billion (in the form of bank guarantee) by April. 
 
When contacted, Nimbus Communications Chairman Harish Thawani refused to comment on the matter but said encryption of Doordarshan's signals on all platform was crucial for the Nimbus-BCCI deal. 
 
Sources say that lowering of rights fee is 'one' of the suggestions made to the board. "Increasing the number of games to be played in India is another option before BCCI. The board could also try a mix of both the options," a source close to the development said. 
 
Neo Sports chief executive Shashi Kalathil said that encrypting Doordarshan's signals on both its terrestrial and DTH platform was crucial for Nimbus. 
Ashish Sinha in New Delhi
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