afaqs!

DD guarantees Rs 96 crore to Nimbus for Indo-Pak series

By , agencyfaqs!, New Delhi | In Media Publishing | November 06, 2007
Doordarshan has agreed to pay Rs 96 crore (gross) to the Nimbus Group as a minimum guarantee from airtime sales, which the former will earn during the telecast of the current India-Pakistan cricket series

In a & #BANNER1 & # win-win situation for both Nimbus and state owned Doordarshan, the two parties have reached a consensus. Doordarshan has agreed to pay Rs 96 crore (gross) to the Nimbus Group as a minimum guarantee from airtime sales, which the former will earn during the telecast of the current India-Pakistan cricket series.

The deal is expected to help both parties maximise their respective revenues, as both Nimbus and Doordarshan will individually target C&S and terrestrial markets, respectively, and there will be no clash of interest.

In case Doordarshan garners more than Rs 96 crore from airtime sales during the Indo-Pak series, Nimbus will get a 75 per cent share of the surplus amount.

Shashi Kalathil
At first look, the deal seems a bit expensive, especially for Doordarshan, which, according to some experts, may not be able to raise the kind of money it has guaranteed. But, there's another set of media buyers who think no amount is 'big enough' with a high-profile series such as the India-Pakistan one.

"It's a good commercial offer respecting the fact that cricket's commercial value has increased over the years. An Indo-Pak series attracts the maximum eyeballs and, with its huge reach, DD could easily collect Rs 150 crore from the ODIs," estimates a senior media planner.

As per sources, Doordarshan already has roped in big advertisers such as LG Electronics, Nokia, Hero Honda, RCom, Airtel and Vodafone.

After the new deal between DD and Nimbus, all composite deals sold by Neo Sports, the Nimbus group channel (for both DD and Neo), stand dissolved and media planners and advertisers are working overtime to carve out individual deals with both DD and Neo Sports.

Neo, which was earlier charging Rs 2.9-3.65 lakh per 10 seconds for the composite deal, is now charging Rs 1.4-1.65 lakh per 10 seconds. However, Shashi Kalathil, CEO, Neo Sports, believes that despite the renegotiations, Neo Sports stands to gain more with the last calculations. "We are the bigger partners in the deal and more likely to take the risk. Simple mathematics show that we won't lose as we already have a minimum guarantee of Rs 96 crore plus, we share 75 per cent of any surplus money made by DD over and above that. It's a good deal for us. We are renegotiating rates with advertisers as it was pretty natural that the rates would drop from the earlier composite rates. Even with the lower rates, we expect to make Rs 10-20 crore over our earlier estimates."

Doordarshan, which had a rate card of Rs 3 lakh per 10 seconds, is known to have finally settled for a market operating rate (MoR) of Rs 2.5-2.75 lakh per 10 seconds. "With an MoR of Rs 2.75 lakh, DD could easily double the guaranteed amount. And, had Neo called the shots (i.e., sold composite air time), it could have earned itself a few extra bucks. The difference is what's between 75 per cent (that Neo will get now of the surplus amount) and 100 per cent (that Neo would have got with the composite deal)," adds a media buyer on condition of anonymity.

The advertisers seem happy about the individual deals for both C&S and terrestrial homes, rather than a composite deal. "It's now easy to reach our target audience with two different channels each targeting a different set of audience," says a planner.