‘BCCI’S MOST TURBULENT PHASE IS ALSO THE MOST LUCRATIVE’

Submitted by admin on Mon, 11/06/2017 - 16:14

Rahul Johri, CEO, Board of Control for Cricket in India says he wants to ensure that his term brings in the best value for all stake-holders of Indian cricket, and that the BCCI is already set to earn more money in the next five years than it has seen in its history

 

BY SIMRAN SABHERWAL
(with inputs from RUHAIL AMIN and ALLAN DSOUZA)
 

Old-world and staid is the impression one gets when one walks into the offices of the Board of Control for Cricket in India - the national governing body for cricket in India, better known as BCCI - at Mumbai’s iconic Wankhede Stadium. The home of Indian cricket, BCCI’s clout extends beyond Indian shores, though quite often in its history, it has been beset with controversies. The mounting allegations of corruption led to the Honourable Supreme Court setting up the Lodha Committee to clean up BCCI. One of the recommendations of the committee, the need for a professional at the helm, led to the appointment of experienced media hand, Rahul Johri as CEO of BCCI - the first since its inception in 1928.

I HAVEN’T SEEN MONOPOLY ANYWHERE: RAHUL JOHRI

 

On implementation of Lodha Committee recommendations

 

You have to understand this thing as a whole. The Honourable Supreme Court has ruled on the Lodha Committee report and given a constitution. This constitution has to be adopted by the BCCI. However, the BCCI is registered under the Tamil Nadu Societies Act and for a new constitution to be adopted, it has to be voted by 75% of the members. This has not happened at this point in time, because of which the Honourable Supreme Court appointed a Committee of Administrators (CoA). Today, the office-bearers and the CEO work under the supervision of the CoA, which is responsible for the running of the BCCI.
 

Now, the relationship between the office-bearers, the associations, and the Supreme Court is a totally different matter and it doesn’t impact us in our day-to-day working. Our focus is that the highest quality of cricket is played and all systems have to function. That is what we are doing. The old constitution of the BCCI is still in force because the new one has not been accepted. Tomorrow, the new one will be in force. However, as professionals, it makes no difference to us as our job remains the same, no matter to whom we report... how we report may undergo a change, and so long as we are focused on delivering the highest quality of cricket and smooth running of cricket, it is fine.
 

On the recommendation to have strong structures in place for local associations

There are two parts to this. The State cricket associations are really the bedrock of cricket in India. It is their hard work that has resulted in the cricket infrastructure percolating down to the grass roots and today, you are seeing the result of that. The proof of that is the bench strength of the Indian cricket team; today, we are the No. 1 Test and One-Day International team in the world. The reforms that need to happen are an issue between the State associations and the Supreme Court of India. We are not in them. We do our job and what needs to happen between the State associations, the BCCI and the Supreme Court is a different matter altogether.
 

On e-auction vs sealed bid tender

An e-auction and a sealed bid tender process are both efficient processes in their own ways. We are not playing one against the other. I never said there will never be e-auction in BCCI, or there will always be a closed bid process. However, what I’m maintaining is that we have to deliver on two fronts. One, to deliver an absolutely transparent process as a bidder will invest in our properties only when they are confident that it is a transparent process. Two, to see which process delivers the highest value for the BCCI. The value of the last three tenders that we have done has proven that the sealed envelope tender works, because, there are no other properties bigger than these in the country. That is why people are aggressive. It may lack the drama of one guy trying to beat the other as it gets over quickly once the envelopes are opened, but it gets the best out of all the bidders and the bargain delivers the best value.
 

On the perception of a monopoly

I have not seen monopoly anywhere. The last IPL rights was with Sony and at that time, the India International rights were with Star, which they will continue to hold till March 31, 2018. After that, the BCCI India International rights are open to tender, and how that tender will play out is anybody’s guess. By the time the IPL rights will accrue to Star, its term of BCCI India International rights would have finished. So in theory, there is no monopoly at any point in time.
 

On the perceived complexity of his job

Everybody makes out that a job is very complex. You don’t approach any job as a complex job. I go one day at a time, one thing at a time; if you break it down, you can deal with anything. We are not looking at it like it is a tough situation, and this is not so tough a situation. We are solving one issue at a time. Now, it is for you to draw the inference, you are the judge on how we performed on the benchmark. Our job is very straightforward - go issue by issue and do the best you can.
 

On his key priority

The key priority is for us is to deliver the best infrastructure for cricket in India, the best value for our stake-holders and to make sure that we dominate the world of cricket.

 

HOW WILL BCCI MAXIMIZE REVENUE GROWTH?

It will be interesting to see the ways in which Rahul Johri is able to leverage and exploit BCCI properties to maximize revenue growth. For starters, the next big-ticket property is the Broadcast rights for all international matches in India (which is with Star India till March 31, 2018) and it will be interesting to see how the bids pan out between the two players – whether Star will go all out to retain the rights or if Sony Pictures Networks India (SPN) will be aggressive, as they were in their bid to acquire the broadcast and Digital rights of Cricket Australia for a period of six years. All eyes will also be on D-Sport, the sports channel from Discovery Network, that could well turn out to be the joker in the pack and make it a three-way bid. Not to forget the 20% of team revenues that BCCI gets as IPL franchisee fee (the BCCI will also have to share 45% of its central sponsorship revenue with the IPL franchisees). Another area could be licensing and merchandising. This includes merchandise for Team India, which rests with the apparel sponsor Nike as well as the various IPL franchisees. If one were to look at the global market, licensing and merchandising in the US and UK contribute to almost 22% of revenues for the sports market. In India, it is currently negligible and probably time for BCCI to exploit this piece. In addition, the BCCI, in tandem with the State associations, could look to improve the in-stadia experience and improve revenues. Another area is developing and generating interest in women’s cricket, and scaling up and packaging properties such as the Ranji Trophy, Irani Trophy, Duleep Trophy, and market them aggressively to make them relevant for the audience that currently only watches international cricket and IPL.

 

It’s been said that Johri is ‘a man who performs at his best when under pressure’ and this has been displayed many times since he took over the hot seat in June 2016. A calm demeanour and a sense of being in control is what characterizes him and probably helps him walk the tight rope and manage the expectations of the various stakeholders. Commenting on his stint so far at BCCI, Johri says, “The journey has been interesting. BCCI is a very diverse and a large organization, and while we are based here (in Mumbai), cricket is played in every nook and corner of the country and to be able to channelize all of that is extremely challenging and that is what we enjoy.”

 

THE WORKINGS WITHIN

Looking broadly at how the BCCI operates, it consists of a Board whose office-bearers are appointed by the various State associations affiliated to the BCCI. In addition, there are multiple committees who are responsible for every decision process and a quick look at the BCCI website shows 24 committees including the IPL General Council which takes decisions related to the Indian Premier League (IPL), the Finance Committee which overlooks finances, and a Selection Committee, besides others.
 

Overlooking the day-to-day management and the responsibility of organizing and coordinating about 1,000 domestic games in its six-month calendar - including marquee properties such as Ranji Trophy, Irani Cup, Duleep Trophy, Col C K Nayudu Trophy amongst others - is the BCCI management’s job. In this system, Johri says the job of the CEO is “a link between everybody” and adds, “The CEO’s job is overseeing all of this, interacting with the Board and the multiple stakeholders – ICC, cricketing boards of other countries, broadcasters, rights holders, IPL franchisees – and delivering on the expectations of the Board. There was a need for a point person in the headquarters. At one point, when the operation was small, it was different; but today, Indian cricket is one of the biggest sports bodies in the world and to run that, a level of professionalism is required and that is what we are doing.”
 

HITTING A JACKPOT WITH IPL

The keenly watched auctions for the IPL in September saw Star India walk away with the coveted rights with a global bid of Rs 16,347 crore for ‘the most disruptive television property in the country’. Asked whether he was surprised by how the bids panned out for the professional Twenty20 Indian Cricket league, Johri says, “There is nothing to be surprised, because we were confident that the property and the value of the property would deliver the best bid.”
 

He continues, “If you are a mainstream Television player, a Digital company or one with digital ambitions, then the IPL is a must-have property and that is what was at play. There is no Television property which gets the kind of audiences across demographics year-on-year that the IPL gets. Which is the digital property that people watch on their phones? It is the IPL.”
 

A significant change in the recently awarded rights was that the period for IPL Television media rights was auctioned for a period of five years as against 10 years in the previous deal. This was necessitated by the fact that the bulk of revenues in the past decade came from Television, while Digital had a delayed feed of five minutes, and now things are likely to be different. A recap of numbers shows that Sony Pictures Network India (then MSM) and World Sport Group won the IPL 10-year rights for $918 million. However, the next year, the deal was renegotiated, with Sony getting the rights for about $1.63 billion (approximately Rs 8,200 crore). Looking at the Digital space, Novi Digital – the parent company of Hotstar - acquired the digital rights of IPL for three years for Rs 303 crore.
 

However, this time around, with biggies such as Facebook and Reliance Jio showing interest in the Digital rights, it was anticipated that this platform would see aggressive bids. And that’s how it played out, as Facebook, Airtel, Reliance Jio and Times Internet bid Rs 3,900 crore, Rs 3,280 crore, Rs 3,075.72 crore and Rs 1787.50 crore respectively in their quest for IPL’s digital rights. For Johri, the objective is simple - to deliver the best value for all stake-holders. He explains, “The plus side when you do a 10-year deal is that people can spread the risk over a bigger period of time, resulting in higher value. If you look at five years, what would happen is – one, if the digital feed is delayed, and if we had sold it for 10 years, digital would have remained delayed for 10 years. With the way the digital market is going, and it was proven by the level of excitement during the digital bids, a shorter window is better.”
 

He adds, “Earlier the plan was that we would have done 10-year bids for Television and five-year bids for Digital. After five years, we would have again gone for Digital rights bids, trying to sell a delayed feed. Now, when you look back to see the sum total (for the five-year bids), it will be much bigger than what anybody would have projected for one-shot 10 years and the BCCI and the stakeholders will gain more.”
 

However, with Star India winning the consolidated global bid, the Digital feed will now be live simultaneously with the Television feed, courtesy a caveat put in the tender document. Johri elaborates, “Fortunately, as one entity has won the bid, Digital will be live. That is the offer we had put in the tender document - that if the same person or consortium’s bid wins all the rights, then Digital would become live and the difference would go.

However, had two different entities won it and when it would have come up for renewal, it would have been a delayed feed again.”
 

So, how does Johri see the Digital bids evolving? “Who knows, five years down the line, Digital might be buying Television rights. We are prepared for it. We are rights sellers. Our job is to get the best value for our rights. So that is what we are focused on,” he says, adding, “Be it Hotstar’s performance, or the bid numbers that you see, what do they have in common? It is the IPL digital rights. We are the most valuable rights holders.”
 

LOOKING AHEAD: EXPLORATION PHASE

Digital is also a sign of how consumers’ engagement is going through a metamorphosis and a big focus area for Rahul Johri is how to optimally engage with audiences. Looking at revenues, while BCCI will be focused on the sponsorship revenue and income from media rights, the way forward will be to explore and look at different revenue streams. “Today, Digital is exploding, so we will try and look if there is anything else in Digital. We have some reserved rights that we can keep for ourselves, because as technology develops, we can monetize those rights. That is a continuous process as to how we can maximize the value of all our properties,” says Johri.
 

BCCI is also working with its partners, including franchisees and sponsors, in this quest. According to Johri, “We are fortunate that we have a number of really good partners. They really invest in the partnerships. There is a school of thought that you just buy a sponsorship and it will deliver and do nothing else.
 

But if you look at all our partners, either when India is playing Test matches or international cricket or when the IPL is on, all the partners are involved. Take for example, Vivo Fan Box or Maruti Suzuki’s in-stadia car display. Everybody is trying to maximize the value of their sponsorship and that is what makes the spectacle so much more enduring. It is the commitment of all our sponsors.”
 

PERCEPTION VS REALITY

However, what can’t be disputed is the fact that though the BCCI was applauded for its transparency in the last three auctions, the perception of BCCI as a corrupt organization prevails in the public’s mind. When asked about this, Johri takes a piece of paper and draws three circles to explain, “There is the BCCI and cricket in India, there is the BCCI Board and there is BCCI management and officials who are running the show.
 

They are doing their job. The court has approved all of them. The team is performing well. The issue is over here (pointing to the circle denoting the Board), that is with the court. Why is the issue there? The issue was because the flow of money came faster than the systems. That is the classic case that happens anywhere.”
 

On a final note, Johri signs off saying, “If you see my term, on one side this has been the most turbulent phase for the BCCI, but this is also going to be the most lucrative phase of the BCCI, because the amount of money that is going to flow through the BCCI into cricket in the next five years (which has been tied up in this year) is more than what the BCCI has made in its entire history, not just the last five or 10 years, but its entire history.”
 

@ FEEDBACK

simran.sabherwal@exchange4media.com

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Volume No: 
14
Issue No: 
22