After establishing its position as a leading sports rights management company, the Rs 750-crore Nimbus Communications is looking beyond the acquisition, management and marketing of commercial rights relating just to cricket. Recently, Nimbus Sport, a division of Nimbus Communications, decided to enter into an agreement to conceptualise, stage and market an annual hockey league known as World Series Hockey. At a recent press conference, Harish Thawani, Executive Chairman, Nimbus Communications, said, “World Series Hockey will provide hockey players from India and around the world an opportunity to showcase their skills on a prominent platform. This event is openly the first in a number of initiatives we have planned in hockey to bring back glory to our national sport.''
Nimbus Sport will team up with the Indian Hockey Federation (IHF) to organise, manage, develop, produce, stage, promote and market the league. It will also market all broadcasting and electronic media rights in connection with the league and has decided to give IHF an annual fee amounting to nearly Rs 30 crore over the period of the contract or a share of league profits, whichever proves to be higher.
“The sports marketing business in India is growing at a pace of 20 per cent a year compared to the global average growth of five per cent. We believe that as a leading sports rights management company, we benefit from strong brand awareness and are in a strong position to capitalise on the growth of the sports media industry in India,'' says Thawani.
Nimbus has its roots in cricket. “We acquired the global media rights for all international cricket matches organised by the BCCI in India for the period from April 2006 through March 2010 and we have successfully extended this arrangement with the BCCI until March 2014. In addition we have acquired and managed certain rights with respect to other leading sports federations including Bangladesh Cricket Board, Asian Cricket Council, Cricket Kenya and the Singapore Cricket Association,'' says Thawani.
Even in the broadcasting space, it is the Neo Cricket channel which has led Nimbus to garner the maximum ad revenues from the sport. As Thawani says, “Except last year which was a year of recession, almost 90 per cent of our revenues continue to come from cricket.''
In fact, recently Neo Cricket entered the US market with a 10-year contract with Comcast, the largest cable company in the US by revenue and number of subscribers. Nimbus will use part of its IPO proceeds to fund Neo Cricket's expansion in North America.
Its association with cricket has also extended to the lucrative IPL matches, which is into its fourth season. Nimbus Sports is planning to bag an exclusive deal as a world feed producer with the BCCI in the forthcoming IPL matches. Being a world feed producer would entail providing high definition equipment and technical services for the next four seasons of the IPL. The deal, estimated at almost Rs 45 crore, will be in addition to the Rs 120-crore BCCI deal for all domestic and international cricket matches being played in the country.
“As the IPL cleans up its operations, it would be issuing tenders segment by segment of the matches and we plan to provide the back-up for TV production as it is an area of expertise. We have been given a letter of intent by the BCCI to provide technical and equipment services and this would include the IPL, home series and the Champions League T-20 matches. In case of the IPL we are just about to sign the agreement with BCCI for the next four years, '' says Thawani. It has already tied up with international vendors such as the Belgium-based Alpha Cam for procuring outdoor equipment required for the matches.
But Nimbus is now hedging its risks and moving away from its dependence on cricket, especially in the broadcasting space and is entering other genres such as Bollywood and lifestyle. Its broadcast company, Nimbus Broadcast, with channels such as Neo Sports and Neo Cricket, is expanding its number of channels to include a niche sports channel in the future. Having decided to stick to genres such as sports and entertainment, the company recently announced the launch of two new channels, Neo Cinema and Neo Zindagi (for women). “We believe we are one of the largest distributed channels after Zee and already cover 87 per cent of the country with our channels. We are now evaluating a niche sports channel and would be staying away from cluttered channels like news in the future, '' says Thawani. The content for the new 24-hour channels would be produced by Nimbus Communications' own production facilities at its Malad studio in Mumbai.
Besides Nimbus has also dabbled in filmed entertainment, having produced three films and distributed 10 feature films. It also has a home video rental business under the brand ShowtimeVideo, which has four stores in Mumbai. “While we will continue to produce films selectively, we also intend to focus on film distribution both domestically and internationally,'' says Thawani.
But the core competency of Nimbus would continue to be sports rights management. Developing a portfolio of owned and proprietary events is going to be a continuing effort. Elaborating on some of the deals made by Nimbus in the recent past, Thawani adds, “The diversification of our sports management business will allow us to own and build a consistent stream of assets across various sports. In addition to cricket, we have procured sanctions for golf and football. We believe that this business model benefits from its scalable nature and potential replication across other sports events,'' says Thawani.
It has already made a beginning with the creation of an annual hockey league under World Series Hockey with the hope of transforming the way hockey is played and perceived in the country. With its new integrated business model in sports encompassing acquisition of commercial rights, production and broadcasting, Nimbus is now getting ready to capitalise on the growth of the sports media industry.