NZ Cricket hits $25m jackpot
The Indian cricket tour will deliver New Zealand Cricket the biggest payday in its history probably in excess of $25 million thanks to a multimillion-dollar deal for television rights.
NZC will pocket a staggering $1 million for each of the 22 days the money-spinning Indians take the field while in New Zealand, making the deal the biggest one-off broadcasting windfall in Kiwi sport.
New Zealand rugby pockets about $US18m a year in TV licensing fees, a figure often inflated by the exchange rate. But that's for an entire season of Super 14 and All Blacks rugby.
Thanks to Sachin Tendulkar and his superstar team-mates, cricket's windfall will come on the back of less than one month's work.
The broadcast deal for this tour is so important, NZC has taken out insurance against being unable to deliver matches to Indian broadcaster Sony.
NZC boss Justin Vaughan said: "We normally have insurance for gate receipts if a match is rained out, but for a tour of the magnitude of India we're insuring everything, including TV rights."
Over the past two years, NZC's income has been around $30m, but this year Vaughan is hoping to bring in "north of $40 million" from broadcast rights, sponsorship and ticket sales.
Cricket operates a model whereby host nations pick up the expenses of touring teams, but in turn get sole access to all broadcast rights and gate receipts.
Broadcast rights account for up to 75% of NZC's income and this season features tours by West Indies and India, which would mean in excess of $30m in broadcast revenue.
As a guide, Australia's income from a tour by India has been revealed as being worth at least three times more than a tour by any other national team.
Vaughan wouldn't give away exact figures, but said a tour by India generates "many times" more income than tours by Australia, South Africa and England, who are on the next tier. He said the Indian tour was worth more to NZC than the payout from the Cricket World Cup, which was around $20m.
"I doubt we've had a bigger year than the one that's in front of us," Vaughan said.
However, while the rights for this tour are secure, Vaughan said it was vital for New Zealand to perform well on the field, as he was not far away from negotiating the rights for the next cycle in cricket's Future Tours Programme. He desperately wants another Indian tour as soon as possible. "This series is as important as any I can remember. The tour is important on so many levels, obviously financially, but we cannot emphasise enough how important it is for us to do well against them on the field," Vaughan said.
"This Indian team rates itself extremely highly and if we are competitive against them then the levels of respect New Zealand gets in terms of international credibility will increase that's really important as we look at the planning of the Future Tour Programme beyond 2012.
"To have some influence over that [Future Tours Programme] people have to understand that we're a serious player. We can't always rely on good relationships with England and Australia we have to be able to prove it on the field as well. Because an Indian tour is so important for our finances, we'd like an Indian tour to come in the next four-year cycle."
The reason New Zealand wants regular tours from India (the last was in 2002-03) is obvious: the market for cricket in India is insatiable, the population is growing ridiculously fast, but there is not yet the TV saturation which western countries are used to.
India's population is projected to be 1.6 billion by 2050, 200 million more than China, which has a one-child-per-family policy. Only a third of Indian households now have TV sets, up from 27% in 2003, whereas in Europe and the US, TV is in 98% of homes.
So the more the market in India grows, the more money organisations like NZC can hope to glean from hosting tours here. There's even decent money to be made from selling rights into North America, where there is a huge expatriate Indian community still keen on cricket.
Sunday Star Times