SLC’s tender blunder

As previously reported by the Sunday Times, a decision to re-tender its broadcasting rights was anticipated after Sony Pictures Networks – SLC’s longstanding broadcasting partner – pulled out, leaving it with few options.

Sony’s exit meant there were two bidders: Lax Sportel Vision Pvt Ltd (which runs the pay television channel 1Sport and Dsports in other Indian subcontinent territories) and Lex Entertainment with Media Pvt Ltd. The last two are both registered at the same address: D-583, Basement, Chittaranjan Park, New Delhi, South Delhi DL 110019 IN.

According to SLC sources, the highest bid for TV and radio broadcasting rights received was US$ 16 million for the three-year cycle. The highest bid for digital broadcasting rights was US$ 6 million. The figures quoted were well below expectations, they said, leading to a decision at the Executive Committee to go to the market once again.

SLC will invite expressions of interest for the new tender for television, radio and digital rights on March 1, 2020.

“We were not happy with the offers we got,” a senior SLC official said, requesting anonymity. “Therefore, we decided to re-tender broadcasting rights but not production rights.” The best offer for production rights was US$ 4.1 million which the tender evaluation committee (TEC) was “satisfied” with.

The bidders had wanted the board to negotiate their terms with them rather than re-floating the tender. But the SLC stood firm in order to keep the process as “transparent” as possible.

Unlike in previous years, SLC floated three separate tenders for TV and radio broadcast rights, TV production rights and digital broadcast rights spanning the next three years in view of its partnership with Sony (formerly Ten Sports) ending on March 31 this year. This is the first time SLC floated digital rights separately. This decision seems to have cost the board dearly. Apart from the lack of transparency another concern of Sony Pictures is the separation of digital rights from TV/Radio broadcasting rights.

After poor interest, SLC has now decided to award them together.

“Having evaluated the said bids in the presence and under the observation of representatives of the ICC and other independent parties in a transparent process, SLC is of the view that SLC could obtain better value for its television, radio and digital rights by combining the tenders for the said rights into a single consolidated tender process for television, radio and digital rights,” a SLC media communique stated.

By re-tendering, the board now hopes big players in the market, like Star India Pvt Ltd and Sony, could join the fray. Sony had initially shown interest, even paying the non-refundable deposit and signing the non-disclosure agreement to own both broadcast rights (television/radio as well as digital). But it pulled out just days before the bid acceptance. It was a blow to SLC’s chances of striking a rich deal.

Sony clinched the rights in 2013 for seven years for US$ 34.873 million. This was without the rights for the India tour of Sri Lanka in 2017 which the board had earlier sold to the same company for US$ 25.5 million. Therefore, SLC’s total TV rights deal with Ten Sports was worth US$ 60.373 million. The production rights costs were around US$ 14-15 million, also held by Ten Sports.

Star India, who owns the rights of the International Cricket Council, the Indian Premier League and the Indian national team, had shown interest initially in buying TV/radio and digital rights along with 21 other firms but withdrew.

Broadcast rights are a vital revenue source for SLC and the national team’s performance plays a vital role in getting a good deal. Sri Lanka sits low in the ranking across all formats but has shown signs of improvement during the current series, something the administrators are now hoping to exploit.

“Now that the team is also performing, I think we made the right decision by going to the market again,” the source explained. “We are hoping we’ll get a good deal.”

The processes followed in the past attracted allegations of corruption, albeit not proven. The National Audit Office (NAO) said SLC suffered a loss of over US$ 18 million in 2013 by offering it to the lowest bid made by Sony. SLC refused to admit the loss, claiming they evaluated the company’s performance and made the right choice. Nimbus, which made the best offer, is no longer in existence.

The new rights cycle begins in April and the first major fixtures are the tours of Sri Lanka by South Africa, India and Bangladesh between May and August. SLC’s international media rights have historically been acquired by Indian broadcasters, with that market accounting for most of their value.