The split between the government and Star India has wedged open further with the Ministry of I&B notifying the entire 2018 Hockey Men's World Cup Tournament as a “sporting event of national importance” just two weeks before the commencement of the tournament.
The Men’s Hockey World Cup tournament will be played in Odisha between November 28 and December 16.
Previously, only matches played by India, the semi-final matches and the finals had been notified as “events of national importance”. By notifying the entire tournament now, Star India – the media rights owner of the tournament – will have to share live feeds of all matches with Prasar Bharti as mandated by the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007, which is popularly known as the Sports Act, 2007. Prasar Bharti would then telecast all the matches over Doordarshan’s own terrestrial network and its Direct-To-Home network, DD Free Dish.
“We had acquired the rights from Hockey India knowing fully well that we have to only share the relevant matches. Because of the new notification, our ability to market the property is derailed. Had we known that this is what the government is going to do we would not have bid for the tournament,”said an executive at a private sports broadcaster on condition of anonymity.
In the case of Hockey World Cup, the Ministry of I&B decided that since the tournament is held in India, it stands to be classified as an event of “national importance.” “The MIB’s criteria for notifying a sporting event is arbitrary, unscientific and without any proper dialogue with rights holders i.e. their discretionary power rules the roost,” said the executive.
Legal recourse, experts say, may not be on table.
Nandan Kamath, Principal Lawyer at LawNK said, “I am not sure whether we can challenge this in court because there is such a wide remit for the government to notify these events of ‘national importance’ without any real criteria.”
Moreover, the belatedness of this notification comes as a surprise because under the Sport Act rules, the private broadcaster has to notify Doordarshan 45 days before an event that it intends to broadcast the event and then it is obliged to share the live feed with Doordarshan, said Kamath.
Agreeing with Kamath, independent media consultant Chintamani Rao said not much can be done about the Hockey World Cup because it sits within the framework of the Sports Act.
This latest move comes even as private sports broadcasters walk a tightrope over the MIB’s proposal to expand the reach of notified events to the “largest set of people”. In mid-October, the MIB floated a public consultation document proposing to amend section 3(1) of the Sports Act to allow even private cable operators and DTH players to telecast notified sporting events on Doordarshan. This is currently prohibited by a Supreme Court order of 2017.
The government has invited public comments to its proposed amendment until December 31.
Private Sport Broadcasters Miffed, Government Motive Suspect
Private sport broadcasters including Star India and Sony Pictures Networks are crying foul over the proposed amendment to the Sports Act, arguing that is designed to unfairly benefit Doordarshan under the garb of public interest, as well as private cable operators and DTH platforms, while destroying the exclusivity and incentive for private broadcasters to develop and market big-ticketing sporting events.
Experts warn that this move could permanently distort the market for sports broadcasting in India.
Private broadcasters argue that the MIB is seeking refuge in legislative amendments to revive the flagging fortunes of Doordarshan, marred by its unattractive content and negligible viewership. The only way for Doordarshan to change that narrative is by airing sporting events, a big draw for TV viewers. The cash-strapped public broadcaster, however, is in no position to bid for media rights and the proposed amendment arm-twists private broadcasters into sharing their content with Doordarshan at no cost for widespread distribution across private platforms.
In an article dated November 9 in Mint, Vivan Sharan, Partner, Koan Advisory Group, wrote: “Unfortunately, the creation of market value spurs predatory impulses within corresponding line ministries. Consequently, the MIB is interpreting public interest narrowly and in self-interest—by forcibly acquiring private IP for profit. Prasar Bharati barely generates enough revenue to cover its own programming costs—and is dependent on heavy grants from the MIB. Re-transmitting the IP owned by others will perpetuate this culture of handouts rather than stimulate any impetus towards creating quality public-service content.”
Private broadcasters say if the proposed amendment goes through, it will draw viewers and advertisers to free-to-air Doordarshan but eat away into the revenues of private sports broadcasters who have shelled out billions to acquire exclusive content rights for sporting events.
If viewers opt for free-to-air Doordarshan, private sport broadcasters could take a 10-15% hit to their subscription revenues. With content exclusivity gone, advertisers would gain a window to bargain hard on the premiums commanded by sport channels and also contemplate moving their advertising to Doordarshan.
The amendment would also allow private distribution mediums such as cable operators and private DTH platforms to negotiate rates with private broadcasters.
Experts say if private broadcasters realise they do not stand to make money even after shelling out top dollars, it will force them to rationalise their eye-watering media rights budget.
In September 2017, Star India acquired the media rights to the Indian Premier League (IPL) for a whopping Rs.16, 347 crore for 5 years (2018-2022). Under Chairman Uday Shankar, the company has committed a staggering $ 400 crore across various marquee sport events, including the ICC Cricket World Cup 2019.
Risk to Indian Sporting Ecosystem
Private broadcasters and experts warn that killing the ability of private broadcasters to monetise sport properties would severely hurt Indian sports.
“On the one hand, sports broadcasters losing audiences and revenue will have to lower their bids for broadcasting rights in order to remain viable. On the other, sports federations – particularly emerging sports like badminton, kabaddi, volleyball, boxing, football etc. for whom broadcasting rights are the major source of revenue, will have to make do with less, with direct consequences for the sports each of them represents.” said the executive quoted earlier.
Atul Pande, Chairman and Managing Director, Sports and Live Media Entertainment, who also runs the Indian Badminton League, said, “Sports broadcasters are putting in a lot of money and are building business models on the fact that there would be exclusivity. This rollback of sorts would put the whole sporting broadcast business in a lot of problems because the model on which they built their business would be redundant.”
Sharan, in his article in Mint, concurs. “Owing to limited scope for scaling up government expenditure, most future investments in local sports will be private sector driven. The global sports market is already worth around 1% of gross domestic product (GDP), whereas the annual ‘Khelo India’ cash outlay works out to less than 0.04% of India’s GDP.”
The timing of this amendment is also peculiar cite experts, coming less than a year before the ICC Cricket World Cup 2019, the most valuable sport in the country.
What is also evidently upsetting private broadcasters is the mandate for private sports broadcasters to run a ticker at the bottom of their screens informing viewers that the telecast is also available on Doordarshan channels, which experts call “free marketing” for the government broadcaster. “This is totally absurd in my view and needs to be challenged,” said Rao.
Government attempts to bypass judicial interpretation?
The MIB’s amendment proposal is also facing scathing criticism for attempting to find a back-door route to sidestep the Supreme Court’s order of 2017, which prevents private cable and DTH networks from airing notified sporting events being telecast on Doordarshan.
Here’s how: Under the Sports Act, private sport broadcasters are obligated to share live feeds of “events of national importance” with Doordarshan only for re-transmission on its own terrestrial and DTH, DD Free Dish.
The Sports Act, however, contradicted another law enacted by the government. Under Section 8 of the Cable Television Networks Act (CTN Act), all private cable owners compulsorily had to carry 24 Doordarshan channels. This meant that when sporting events were broadcast, local cable operators and private DTH platforms gained access to these telecasts through two avenues - private sports channels and through Doordarshan. This is exactly what the Sports Act, 2007 prohibited.
More so, while private broadcasters charge the distribution networks, Doordarshan does not charge networks as Doordarshan channels are free-to-air. As a result, distribution channels refrain from paying the actual content rights owner 75% of the revenue earned as mandated by law, arguing that the broadcast was made available by Doordarshan for free.
On August 22, 2017 the Supreme Court ordered that private networks be barred from telecasting sporting events aired on Doordarshan, arguing that the scope of the mandatory sharing provision under the Sports Act cannot be read in Section 8 of the CTN Act.The verdict was delivered in a case filed in 2007 by Nimbus and BCCI over these two contradictory laws enacted by the government. In 2013, Star and ESPN had impleaded themselves in the case.
The proposed amendment by MIB now seeks to do exactly what the SC verdict has banned – telecasting sporting events that are “nationally important” on Doordarshan through private cable and DTH platforms. What Defines “Sports Of National Importance” And Does It Have Merit?
The MIB’s criteria for notifying a sporting event is arbitrary and unclear, argue private broadcasters and experts alike.
Last year, the MIB notified the Commonwealth Games, Asian Games, summer and Special Olympics, Paralympics and certain tennis, hockey and football events as sporting events of “national importance.”
With no clear definition, Ministers have attempted to push the line. Former I&B minister Smriti Irani had attempted to categorise the Indian Premier League, arguably the most high-profile sporting event in the country and the BCCI’s cash cow, as “nationally important”. That proposal was rejected by Sports and Youth Affairs Minister Rajyavardhan Singh Rathore, who is now in charge of the MIB as well.
Private broadcasters now fear attempts the Pro Kabbadi League may be notified as a sport of “national importance”.
The Road Ahead
While the proposed amendment to the Sports Act is open to public consultation till the close of the year, many in the industry say the process is purely for optics and the deal is “as good as done”.Should that happen, the MIB should gear up to battle multiple lawsuits from not just private broadcasters but also the BCCI and sport federations. Because this a fight private broadcasters will not go down with lightly.