ICC relents to broadcaster pressure on ‘media rights’ opaqueness, brings some clarity to tender process
The International Cricket Council (ICC), under intense pressure from the four broadcasters who had refused to attend the mock auctions – a workshop to understand technicalities – this week, finally decided to reduce the “opaqueness” of the tender process for the sale of media rights late Friday evening.
The ICC has now decided to do the following:
A) US$1.44 billion has been set as the basic price (the ICC refers to it as the “benchmark price”) for the four-year rights cycle for all ICC matches in India.
B) The ICC is due to inform broadcasters that a “2.8 multiplier formula” will be used for the eight-year cycle, meaning the base price for the cycle will be computed at US$1.44 billion (base for four years) multiplied by 2.8, which equals roughly US$4 billion.
C) The ICC will also specify how it will decide whether a second round required. An electronic auction will required if the gap between the winning bid and the second-highest bid is less than 10%.
Because broadcasters need not place a bid below the minimum amount. The ICC refers to the “base price” as the “benchmark price.” Further research reveals that while broadcasters not entirely sold on the multiplier method, they do not mind “some clarity.”
ALSO READ | Base price for ICC media rights for India can work out to approx $1.5b for four-year, $4b for eight years
Four of the six broadcasters that had chosen the tender document when the ICC made it available; Viacom, Disney, Sony, and Zee—had been sobbing uncontrollably about the procedure used up until this point to carry out the sale of rights.
The broadcasters had to keep reminding the ICC that they could “stay away from the auctions altogether”. Due to factors such as A) not announcing a reserve price; B) not specifying the multipliers for the eight-year bid; C) not explaining how the ICC will decide to conduct Round Two – an e-auction. If Round One (closed bid) deemed unsatisfactory.
If the ICC has agreed to reveal the bid numbers provided by the broadcasters. As soon as the envelopes opened, in front of the representatives from bidding businesses, it could not confirmed.
“Considering now they (ICC) have to share if the difference between the winning bid. And the second-highest bid is less than 10% for Round Two to go ahead. They will now have to announce all the bid numbers on 26th itself in front of the broadcasters,” say those tracking developments as quoted by TOI.
Technical bids must submitted by August 22. And closed bids must presented by August 26 per the ICC’s request. Without elaborating on what it meant by “satisfactory”. The governing body had stated that an e-auction would held in Round Two if the closed bids were “unsatisfactory.”
On Saturday morning, the ICC will formally contact broadcasters regarding the same.
(With TOI Inputs)