Trouble brewing in ESPN-Star JV
The root of the discord apparently lies in Star's recent deal with Nimbus's upcoming sports channels.
By Shailesh Dobhal and Amanpreet Singh, TNN |
NEW DELHI: There are reports of trouble brewing between Disney-owned ESPN and News Corp’s Star Sports, the two equal partners in the decade-old ESPN-Star Sports (ESS). The genesis of the discord apparently lies in Star’s recent distribution deal with Nimbus Communications’ upcoming sports channels, something that goes against the spirit of the ESPN-Star JV. Sources say that Star Group did not keep JV partner ESPN or even JV entity ESS in the loop for the distribution deal with Harish Thawani’s Nimbus.
According to sources, a ESPN-Star Sports split in India cannot be ruled out. “We would like to confirm that we are fully committed to the joint venture with ESPN,” Star Group’s spokesperson told ET when contacted. “There is no, absolutely no, truth in the report that ESPN and Star are discontinuing with the JV,” said Star Entertainment CEO Sameer Nair.
Queries sent to Jamie Davis, MD, ESPN-Star Sports Asia remained unanswered and ESS’s India managing director RC Venkateish refused to comment. “For any partnership related issues, please contact our Singapore office, as we can’t comment on these issues,” he said. ESS operates in 26 countries in Asia and has 13 sports channels across the region.
Though only an equity deal with a competing broadcaster may amount to a complete breach of the ESS JV contract, sources explain that differences seem to have cropped up due to a lack of trust between both parties. With typically 65-70% of a pay sports broadcaster’s revenues coming from distribution, Star’s move to distribute a competing sports channel will definitely impact ESS’s revenue adversely, say sources. ET learns that this development has irked ESS top brass across Asia.
According to sources, there was a board meeting called by both Star Group and ESPN in Hong Kong on Monday. The meeting was attended by the likes of Russell Wolff, MD, ESPN International; Jamie Davis, MD, ESPN-Star Asia; and Michelle Guthrie, CEO, Star Group. In fact, it is Ms Guthrie who has been negotiating with Nimbus for the distribution deal. However, ET could not confirm any of these developments.
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Incidentally, all the F1, cricket and Wimbledon rights that ESS had bid for together expire in ’08. The biggest bid coming up in the next few months is the International Cricket council (ICC) rights for the World Cup Cricket and Champions Trophy, post ’07, and the English Premier League (EPL). While cricket is critical for any sports broadcaster in the Indian subcontinent, EPL is integral to their fortunes in the rest of Asia. How ESS bids for these properties will be watched keenly, as it may have a huge bearing on the already strained relationship.
Another long-term property that ESS has created is the Premier Hockey League (PHL) in India, which has another eight years to go. This property, however, is not expensive or critical enough to dictate the future of the partnership.
Disney, ESPN’s parent, is on a consolidation drive in India. It has picked up nearly 15% stake in UTV and completely bought out Hungama TV. Sources in the media broadcasting space say that Disney is looking at increasing its presence in India with sports, entertainment, theme parks and licensing agreements. While News Corp is more entrenched in the Indian broadcasting scenario, ESPN is Disney’s most profitable business in the US and has pockets deep enough to go it alone in India.
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