February 2, 2007EconomyPublic Policy

Cricket has been nationalised

Allowing Doordarshan a free ride harms Indian cricket

This is an archived blog post from The Acorn.

The UPA government has delivered a blast from the past, exorcised one of Indira Gandhi’s most damaging policies and turned it loose on Indian cricket. Time and again, this government has shown that it neither understands nor respects a principle that is at once the most basic and most sacred—the principle of rights. This time, it has trained its guns on broadcasting rights, ordering that Prasar Bharati (Doordarshan and All India Radio), as the public broadcaster, must have free access to events of national importance’—like cricket matches. Cricket fans (that includes almost everyone) might rejoice at this state-sponsored free lunch. But the joy is unwarranted, because it is bad news for cricket.

The fact that the market value of broadcasting rights has shot through the roof indicates, well, just how valuable they are. Prasar Bharati is either incapable or unwilling to pay the market price, resulting in its viewers not having access to live cricket. The UPA government decided that this is a bad thing and ordered private broadcasters (who paid for the rights) to share live feed, without advertisements” with the state-owned broadcaster. Thus Prasar Bharati not only gets the live feed free of cost, it can also make money by selling airtime to advertisers. The UPA may call this policy. A more appropriate word for it is robbery. [See BongoPondit’s take]

Apologists of robbery is often justify it on Robin Hood’ grounds—that the act is for the larger social good. But let’s ask why broadcasting rights have become so expensive? Because the broadcasts (and the embedded advertisements) reach a lot more people. Broadcasting rights are unique because those who own them have every incentive to get as many people as possible to watch the cricket. You can’t hoard rights to live broadcasts. And while there is no reason to accept that Indians should have a right to watch cricket matches free of charge, it stands to reason that broadcasters pass on the cost of acquiring those rights to advertisers, with viewers continuing to pay next to nothing. When was the last time someone in India could not watch a cricket match when there was at least one Indian company broadcasting it?

So the UPAs robbery does not really make cricket more accessible to the public. It just makes it cheaper for advertisers, especially for those advertising on Prasar Bharati. Doordarshan, not having to pay for the cricket, has no incentive to reduce the cost of its own operations. Robbery obviously hurts those who have been robbed, so private broadcasters will be hurt too. But wait—this isn’t all. The private broadcasters pay the cricket board for the rights don’t they? So the next time they bid for rights, they will be unwilling to pay as much as before. Less money for the cricket board means less money for players, training, facilities and equipment—in other words, ultimately, it is bad for Indian cricket.

Legislatively, the UPA has promulgated an ordinance to bring its order into effect. It would be a shame if parliament allows its enactment during its next session. Anil Dharker has a point. Do we really need a ministry to ban some things, expropriate others and that is only when it is not putting its foot in the mouth?



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