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Zee may launch sports channel

August 27, 2004 16:18 IST
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India's biggest listed media firm, Zee Telefilms Ltd., is considering launching a sports channel with Time Warner Inc.'s Turner International to take on ESPN and Star Sports, a Zee official confirmed on Friday.

While targeting cricket-loving Indians at home and abroad, the channel would combine Indian and international sport events, and be distributed in Asia-Pacific, Europe and the United States.

But its future is largely dependent on the outcome of a battle for the broadcast rights for international matches organised by the Board of Control for Cricket in India (BCCI).

"We have got a proposal, but we will only take it forward if we get the BCCI rights," said Ashish Kaul, a vice president of brand development at Essel Group, which owns Zee.

"It wouldn't make sense to launch it without cricket."

A Turner spokesperson declined to confirm the talks, but said the two firms were always exploring opportunities for growth.

"Strategically, it's a bold initiative by Turner," said Vivek Couto, analyst at research firm Media Partners Asia.

"But India is among the top three markets for them in Asia, and they need another viable offering in addition to kids' entertainment."

Zee, India's third-ranked network, has emerged the surprise highest bidder for BCCI rights with a bid of $260 million, pipping ESPN-Star Sports (ESS), a joint venture of Walt Disney Inc. and News Corp. A decision is expected soon.

Zee has a distribution joint venture with Turner in India, and had earlier said it would launch a sports channel next year. Analysts say sports will add to its clout with cable distributors and drive its domestic and overseas subscription


Analysts wonder about the timing of the announcement, particularly since ESS has contested Zee's bid on the grounds that it does not have enough live cricket broadcast experience.

"It might potentially give Zee additional leverage now," said Amol Dhariya, an analyst at Karvy Stock Broking.


For Turner, focused on childrens' entertainment in India with Cartoon Network and Pogo, besides the CNN news channel, this would be an important but challenging step, analysts said.

"Sports may be a good draw ... but in the current context, going head to head with the existing competition and trying to make money out of it will be a very bold gambit," Couto said.

The Zee-Turner distribution venture is a 74:26 equity deal between the firms. Zee owns Siticable, India's largest cable TV distributor with 5 million of the 48 million cable homes, and the sole direct-to-home platform, Dish TV, with 150,000 subscribers.

It also owns and operates channels around the world.

Time Warner Cable, the second-biggest U.S. cable operator, reaches 11 million subscribers there and shows North American baseball, basketball and hockey as well as NASCAR motor races.

In India, ESS shows a mix of global events such as English soccer and Formula 1 motor racing. But cricket corners the bulk of viewers and more than three-quarters of sports advertising.

Media Partners Asia estimates India's cricket-related ad market at more than $70 million a year and subscription revenues for ESS at more than $60 million. Cable TV advertising is expected to grow more than 10 percent this year.

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