OneAlliance, Neo rework distribution deal

Insearchindia.com Team

(6 February 2012 9:45 pm)


MUMBAI: Soon after MSM Discovery terminated its distribution pact with Neo Sports Broadcast, the two companies have reworked a fresh deal that would reduce the payout to the sports broadcaster as it had lost the rights to telecast international cricket played in India.

Though the financials have not been disclosed, sources familiar with the development said the new agreement is effective only for a year with the option to renew it. The deal was signed last week and has come into effect from 4 January.

Indiantelevision.com had first reported that MSM Discovery (which operates under TheOneAlliance brand) had terminated its distribution deal with Neo Sports Broadcast on 3 January. Neo Sports Broadcast operates two channels, Neo Cricket and Neo Sports.
Sony Entertainment Television India (now called MSM) had agreed in mid-2010 to pay a minimum guarantee of Rs 2.7 billion net for the three-year distribution of Neo Cricket and Neo Sports.

"The need to thrash out a fresh deal was because Neo lost the BCCI (Board of Control for Cricket in India) rights. The value of the old deal obviously needed to be brought down. By doing a one-year deal in new commercial terms, TheOneAlliance gains as its payout drops and it also gets to distribute sports channels that still have Euro Cup and Asian Cup as valuable properties," a source said.

Neo will telecast Asia Cup (March 1-12), UEFA Euro 2012 (June 8 to July 1), French Open (May 27 to June 10) and World Series Hockey (February 29- April 2).

"TheOneAlliance will be able to strengthen its third bouquet that had would been weak without the two sports channels. Their collections on the ground will improve," said the head of a leading multisystem operator (MSO) who did not want his name to be revealed.
TheOneAlliance bouquet also has the Indian Premier League (IPL) content which will be broadcast exclusively on Max.

Said MSM Discovery president Rajesh Kaul, "The sports genre has always been a strong growth driver. We are happy to welcome back Neo to TheOneAlliance bouquet. The blockbuster lineup on Neo channels coupled with DLF IPL on Max will ensure the bouquet is poised for further growth."

For Neo, the one-year distribution deal will give it breathing space to strengthen its distribution team or weigh its partner on new terms.

"Neo, which is somewhat crippled by the loss of BCCI rights, will have time to rebuild and strengthen its properties. It has a strong distributor in TheOneAlliance and can decide on its future course of action after a year," a media analyst said.