Cricket: In the Money (FORBES)
An Indian adman and his backers revel in rights to the sport.
Thank Harish Thawani of Nimbus Communications, a privately held Mumbai sports management company, for vaulting Indian cricket into the billion-dollar club. Thawani, a former ad executive, bid $612 million for four-year rights to telecast Indian cricket matches.
Nimbus' rise in the past decade to become the world's leading cricket producer and manager of media rights parallels the commercialization of Indian cricket and the proliferation of private television channels in Indian households. And India, in turn, is the epicenter for cricket's commercialization in much of the old British Commonwealth. Although, as a nation, Australia may be fielding the best teams, it loses out to India in terms of sheer number of fans who care for the game, and that translates into more eyeballs for advertisers; a strong economy and predominantly young population makes India the hub of cricket.
That explains why the Board of Control for Cricket in India (BCCI), a nonprofit body controlling the game in that country, has racked up $1 billion to date from selling commercial rights to Indian cricket for the next five years. (One source: Nike (nyse: NKE - news - people ) paid $45 million to flash its logo on players' apparel and to sell garments to cricket fans.) "It's all about extracting the most value," said Lalit Modi, BCCI's new marketing chief, who hopes to eventually make $1.5 billion from Indian cricket, ten times what BCCI made in the last go-around.
Good for the Indian cricketeers. However, the question for an entity like Nimbus is, will resale of the sport's rights justify that kind of outlay? Thawani has already sold BCCI's telecast rights internationally, including to the U.S., where nearly 2 million southern Asians are avid watchers, for $130 million; it hopes to clear the profit threshold from Indian rights.
London private equity firm 3i is counting on a cricket-crazy population to deliver returns on a 31% stake in Nimbus--Thawani, 46, and Mauritius-based Transatlantic, a private equity firm, hold the rest. Anil Ahuja, managing director of 3i India, invested $45 million in Nimbus last August. "You are looking at a team that has the most intellectual property and knowledge of the sport," said Ahuja.
Nimbus, started by Thawani in 1987 after stints at Lowe Lintas and Leo Burnett, is an agent for Rupert Murdoch's Global Cricket Corp. That outfit in 2000 paid $550 million to the International Cricket Council--the sport's international governing body, which organizes face-offs between leading cricketing nations, for rights to cricketing events until 2007.
The stint with Murdoch's outfit came in handy when Thawani, an economics graduate from Bombay University, bid for BCCI rights, scoring over Dubai-based Ten Sports, Sony (nyse: SNE - news - people ) Television, ESPN and another Murdoch unit, Star Sports, to telecast a game that stretches from either the racier one-day version or the more sedate five-day test format.
Seems that cricket fever has nothing on the passion for equity finance. This month Thawani, planning a third funding round to buy a sports network in India or start a new one, contends investors are valuing Nimbus at $400 million to $500 million, thrice the price of the stake sold to 3i.
http://www.forbes.com/global/2006/0424/061.html
An Indian adman and his backers revel in rights to the sport.
Thank Harish Thawani of Nimbus Communications, a privately held Mumbai sports management company, for vaulting Indian cricket into the billion-dollar club. Thawani, a former ad executive, bid $612 million for four-year rights to telecast Indian cricket matches.
Nimbus' rise in the past decade to become the world's leading cricket producer and manager of media rights parallels the commercialization of Indian cricket and the proliferation of private television channels in Indian households. And India, in turn, is the epicenter for cricket's commercialization in much of the old British Commonwealth. Although, as a nation, Australia may be fielding the best teams, it loses out to India in terms of sheer number of fans who care for the game, and that translates into more eyeballs for advertisers; a strong economy and predominantly young population makes India the hub of cricket.
That explains why the Board of Control for Cricket in India (BCCI), a nonprofit body controlling the game in that country, has racked up $1 billion to date from selling commercial rights to Indian cricket for the next five years. (One source: Nike (nyse: NKE - news - people ) paid $45 million to flash its logo on players' apparel and to sell garments to cricket fans.) "It's all about extracting the most value," said Lalit Modi, BCCI's new marketing chief, who hopes to eventually make $1.5 billion from Indian cricket, ten times what BCCI made in the last go-around.
Good for the Indian cricketeers. However, the question for an entity like Nimbus is, will resale of the sport's rights justify that kind of outlay? Thawani has already sold BCCI's telecast rights internationally, including to the U.S., where nearly 2 million southern Asians are avid watchers, for $130 million; it hopes to clear the profit threshold from Indian rights.
London private equity firm 3i is counting on a cricket-crazy population to deliver returns on a 31% stake in Nimbus--Thawani, 46, and Mauritius-based Transatlantic, a private equity firm, hold the rest. Anil Ahuja, managing director of 3i India, invested $45 million in Nimbus last August. "You are looking at a team that has the most intellectual property and knowledge of the sport," said Ahuja.
Nimbus, started by Thawani in 1987 after stints at Lowe Lintas and Leo Burnett, is an agent for Rupert Murdoch's Global Cricket Corp. That outfit in 2000 paid $550 million to the International Cricket Council--the sport's international governing body, which organizes face-offs between leading cricketing nations, for rights to cricketing events until 2007.
The stint with Murdoch's outfit came in handy when Thawani, an economics graduate from Bombay University, bid for BCCI rights, scoring over Dubai-based Ten Sports, Sony (nyse: SNE - news - people ) Television, ESPN and another Murdoch unit, Star Sports, to telecast a game that stretches from either the racier one-day version or the more sedate five-day test format.
Seems that cricket fever has nothing on the passion for equity finance. This month Thawani, planning a third funding round to buy a sports network in India or start a new one, contends investors are valuing Nimbus at $400 million to $500 million, thrice the price of the stake sold to 3i.
http://www.forbes.com/global/2006/0424/061.html