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Tussle over IPL TV rights to get fiercer with exit of right of first refusal clause

Basil

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NEW DELHI: Big money battles over broadcasting rights of the Indian Premier League (IPL) are set to get fiercer in the near future. New chief of the Board of Control for Cricket in India ( BCCI) Anurag Thakur told et that future IPL TV rights contracts should not have the right of first refusal (RoFR) clause.

He said, "(In) future contracts, we will make sure that no such thing is there... and in the last 15 months also, we have not given anyone this kind of incentive or opportunity. We will make sure that in future agreements also, such a clause will not be there." Thakur also said BCCI expects a "handsome" and "manifold jump" in revenues from the new round of negotiations on broadcasting rights, which starts on May 29.

Sony Pictures Networks India is the current holder of the 2008-17 period IPL TV rights.

Removal of the RoFR clause from TV rights contract means the incumbent broadcaster doesn't get the first stab at negotiating a fresh contract. The process starts with open bidding and can likely price the rights higher than what a RoFR process would have thrown up.

Broadcast industry executives familiar with IPL rights contracts said Sony has RoFR for the round of negotiations that will start soon. But given Thakur's views, there may not be an RoFR clause in the new contract. Also, there will be tougher negotiations for the coming round, with BCCI expected to set higher floor prices.

For the next round, minus the RoFR clause, open bidding will be the price discovery method. A Sony spokesperson replied to ET's emailed questions, saying the broadcaster "has the IPL broadcast rights up to 2017. Terms of this contract are commercially confidential."

The insertion of RoFR in the IPL television rights contract has been a matter of persistent critique, often directed at former IPL chief Lalit Modi. Critics have argued that this clause distorted price discovery.

Broadcast industry executives familiar with IPL negotiations told ET that broadcast rights are unlikely to be handed for another 10-year period. The decade-long current contract was a reflection of IPL's startup status in 2008. Cricket managers wanted a long TV rights contract to shore up a new venture.

Now that IPL is a commercially viable proposition, contracts are likely for far shorter durations. The English Premier League TV rights contract, for example, is for three years. Executives who spoke to ET did not want to be identified.

Currently, with 60 matches, the broadcaster earns an estimated Rs 1,000 crore per season. In January 2008, Singaporebased World Sports Group bagged broadcast rights for IPL for 10 years for over $1.03 billion. WSG later sold the rights to Sony for $300 m for first five years. Lalit Modi-related controversies saw court battles and fresh negotiations. A new contract was signed between BCCI and Sony-WSG for Rs 8,200 crore. Of this commitment, Sony's share is 80%.

http://m.economictimes.com/news/spo...first-refusal-clause/articleshow/52440763.cms
 
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