Hot Star of Sports – UDAY SHANKAR

Trailblazers2 -- Shankar

THE SPORTS INDUSTRY in India has entered an interesting phase. Ten years after the launch of the successful Indian Premier League (IPL), the landscape has grown multi-fold, embracing the growth of many sports other than cricket. Sponsorship numbers are northbound, participation is on the rise, and more stars are emerging every day – each aspect adding to the ecosystem, which augurs well for the business of sports. The industry has reached this milestone through the unstinting efforts of many professionals, administrators, entrepreneurs – all who have made a difference and contributed to the success story. SportzPower celebrates these winners through TRAILBLAZERS, a regular column which captures their accomplishments outside the arena, showcasing how they made a marked difference to India's sports business. We started the journey with the First Man of Sports – Ravi Krishnan, a name synonymous with the entry and growth of IMG, and sports management in the country.

UDAY SHANKAR, president, 21st Century Fox, Asia, and Star India chairman & CEO, has single-handedly defined the sports story in the country within a short span of six years. The former journalist has many accomplishments in the entertainment industry listed against his name, but the impact he has made through huge investments into sports, innovations on and off the field, and walking the tightrope of dual roles as broadcaster and co-owner of leagues, is noteworthy as they are the main reasons for Star now having a controlling stake in India's sports industry.

WHEN THE SUNRISERS' ALL-ROUNDER, Carlos Brathwaite, started his run to bowl the penultimate over in the IPL 2018 finals, it was a foregone conclusion that Chennai Super Kings will lift the coveted trophy for a third time. It only remained to be seen if the hero of the chase, Shane Watson, would hit the winning runs. But it was his partner, Ambati Rayadu, who drove the third ball of the over to the cover boundary, sealing an emphatic win. But two balls earlier, the Star India team was celebrating a different, but landmark victory. Hotstar, their video streaming platform, had breached the 10-million mark of simultaneous viewers, and ended with 10.3 million concurrent viewers, the most that have ever tuned in to watch live action of any kind delivered online.

While the Hotstar team would have been exchanging high-fives, it is very likely that Star India's CEO, Uday Shankar, might have afforded himself the luxury of a quiet smile, knowing that the broadcaster had successfully navigated the Powerplay of their mammoth Rs 163.475 billion five-year deal for the league's rights with reasonable runs on the board and all wickets still in hand.

If 2008 has been the defining year where the sports business got an impetus with the launch of the IPL, then the last six years have been defined by Shankar's vision in taking a controlling stake in the sports landscape. From starting his career as a political news reporter in far-flung Patna, reinventing himself to head a leading entertainment channel, and then deciding to pump in Rs 200 billion to own sports in India, to term Shankar as a maverick would be a no-brainer.

In a span of seven months, between September 2017 and April 2018, Star committed a whopping Rs 225 billion for cricket rights over the next five years. While everyone hailed Shankar's genius in outbidding rivals, there was sufficient amount of doubt raised on the "unrealistic'' value being dished out and the enormous task of recovering the investment, forget making a profit.

With the BCCI officials after winning the media rights bid for the IPL.
With BCCI officials after winning the media rights bid for IPL

What needs to be taken into account is the fact that these bids were not made in isolation, or in a hurry. Since the time Star made its intentions clear in 2013 to be an important player in the sports industry, not just the sports broadcasting industry, each action from Shankar's team has only been taken with an eye on the final goal.

Shankar was clear about the role Star would play when he announced the Rs 200-billion investment: "While cricket will be central to our approach, we will also be faithful to our role as a sports broadcaster and bring in the best of local and world sports to India, whether in soccer, hockey, badminton, tennis, F1 or the many other sports that fans in India are deeply passionate about. For us, this is not just about being the country's leading sports broadcaster. We want to build a platform that will help nurture heroes out of the millions of passionate young sports fans across India. We want sports to be the trigger for creating and nurturing outstanding new opportunities for India's youth. And today we are signalling that we are deeply committed to making this transformation happen, through our investments, our ideas and our efforts," he had then declared.

NEWS ANGLE

An Economics post-graduate from the prestigious Jawaharlal Nehru University (JNU), Shankar completed a course at Times School of Journalism in Delhi after failing at the interview stage of the UPSC selection process, which put paid to his aspirations to be a civil servant. The story is that he loved travelling and thought a journalistic career would provide him the opportunity, leading him to a job in the Patna edition of The Times of India. Over the next few years, he moved to a string of other publications in Delhi, covering various beats, from politics and health to the environment, and also became one of the founding editors of the environmental magazine, Down To Earth. He moved to TV journalism only in the late 90s, first with Sahara News. He made his mark in TV journalism at the TV Today Group, where he was Editor and News Director, helming the launch of Aaj Tak in 2000 and Headlines Today in 2003.

His unfinished innings in the Star Network started in 2004 when he was hired to head MCCS (Media Content & Communications Services), a 74:26 joint venture between the Ananda Bazar Patrika (ABP) Group and STAR India. His successful run continued, and within three years he was the CEO of Star India, saddled with turning around an entertainment channel which had been ruling the charts, but had been pushed down in the pecking order by agile competitors. Shankar did not disappoint, and his success reaffirmed Rupert Murdoch’s uncanny faith in picking news media honchos to run the businesses in his media empire, which would turn to gold for Murdoch over the next 10+ years and counting.

Shankar with Aamir Khan.
Shankar with Aamir Khan. The Bollywood superstar is the anchor for Star's well-acclaimed show, Satyamev Jayate. This is one of Shankar's
"beyond business" initiatives which raised the profile of the network. In October 2014, Satyamev Jayate Season 3's opening episode "A Ball Can
Change the World" was on sports

Shankar feels that his background as a journalist was very helpful in revamping Star and taking it back to the top. "My journalistic background proved immensely helpful in giving me an outsider’s perspective. A journalist’s strength is being an outsider, having a critical view, not accepting the status quo, and not seeing things as others do. Skills I learnt as a journalist benefited me – questioning, understanding why something is happening the way it is and how to make it better, because a journalist assumes that things are never as good or as bad as they look," he said in an interview with exchange4media.

BACK TO THE GAME

Once Star regained its charm in the entertainment space, sports came to the fore. Even before making the blockbuster announcement of investing huge amounts in sports, Shankar had made their intentions clear with the buyout of ESPN Inc.’s 50 per cent stake in ESPN Star Sports (ESS), then News Corp's joint venture in Asia with The Walt Disney Co., the majority owner of ESPN Inc. “We consider sports to be an important quotient in the entire entertainment space, and this is just an extension of our belief. Post News Corp.’s stake buy, the board will decide how the brand change will pan-out.”

Presenting the first Star Sports ‘Believe’ trophy to Sachin Tendulkar
Presenting the first Star Sports ‘Believe’ trophy to Sachin Tendulkar

The deal allowed News Corp. to own and operate all of ESPN Star Sports’ businesses in Asia — ESPN, Star Sports, Star Cricket and ESPN HD and Star Cricket HD. Launched in 1996, the broadcaster owned some marquee properties, which included ICC World Cups and matches till 2015, and the T20 Champions League till 2017. However, the Champions League property was a burden on the broadcaster. The $975-million buy was expected to provide Star a property as valuable as the IPL, but lack of interest led to the tournament being shut down in 2015.

DRIBBLING ALONG

While IPL was the target, the rights were coming up for renewal only in 2017. Shankar knew that the action had to elsewhere too and football was an obvious play, with all talk about the beautiful game rising to claim a clear second spot. But it had to be a brand new show. Fortunately, the leading sports management company, IMG-Reliance, which had secured all commercial rights to football in India in 2010 was gearing up to launch an IPL-styled league with a cocktail of foreign players and celeb quotient. For Shankar, it was a god-send opportunity; in more ways than one. In normal circumstances, Star would have ended up in a bidding war for the rights, but here they were presented with the prospect of co-owning the league.

“India is hungry for its second sport. Combining top notch infrastructure with our expertise in sports production, our attempt is to bring an unparalleled football experience to our viewers. For far too long, the Indian sports fan has quietly waited for this revolution on the cusp of which we stand today. Our objective is nothing short of creating a movement around football in India. We want to put India on the global map,” he said while announcing the league.

By investing into the Indian Super league (ISL), it was a win-win. Star got compelling content without having to bid for it. But it hasn't been all that rosy on the ISL front. With I-League, the existing and official football league running simultaneously, the real value will be derived only when both leagues are merged and ISL gains top slot. It has been work-in-progress, for the last three years, and despite stumbling on various fronts, it seems likely that everything will fall in place during the 2019-20 season.

With Nita Ambani, founder and chairperson of Football Sports Development Ltd, the organisers of ISL.
With Nita Ambani, founder and chairperson of Football Sports Development Ltd, the organisers of ISL

Another problem has been the challenge of running a league where the franchises do not have access to revenue from media rights sales, the largest revenue generator for any league. This has led to every franchise losing money heavily during the four seasons, with no broadcast revenue in sight in the immediate future. For Shankar and team, the real success will lie in behaving like a co-owner and getting competing broadcasters to pick up the rights of a successful league.

That the thought process is in this direction came across when Sanjay Gupta, managing director, Star India recently told SportzPower: "The question really is, as the primary broadcaster, will we be open to that idea or not? That’s the first stumbling block. Will Sony be willing to do that or not? The only question is, why not? There is no reason from a commercial point of view. And I can give you only a foreign example. The content which is produced by studios... produced by Fox Studio and put on Disney and ABC, we can use the same model. We create movies in Fox Star which get sold to Amazon or even Viacom. And Viacom has made movies and sold to us. If there is real commercial value, people will buy into the idea."

STAR RAIDER

A similar dilemma exists with the Pro Kabaddi League, but here it is more manageable as Star is a 74 per cent owner. Created by commentator Charu Sharma, lawyer Rajiv Luthra, and industrialist Anand Mahindra co-owned Mashal Sports, PKL's success in the first edition can be credited to the total involvement of the Star team and the way they presented the sport to the viewers. According to Shankar, "rarely does a broadcaster create the whole experience and the sport on ground, and then capture it on television. That is what we are trying to do, and that is why I am so excited by the scale of the ambition.”

With Bollywood legend Amitabh Bachchan and industrialist Anand Mahindra during a PKL season launch ceremony.
With Bollywood legend Amitabh Bachchan and industrialist Anand Mahindra during a PKL season launch ceremony

After a sensational first edition in 2014, and having tasted blood of owning a league, Shankar moved to take control of PKL. He was very clear that the acquisition was in line with their vision to create "an even more favourable ecosystem for the great Indian sport of kabaddi and build on its successful launch." He had then said that "the investment is completely in sync with Star's aim to spawn a multi-sport culture in the country will further help in nurturing India's sporting talent."

The property has only grown in leaps and bounds since then. In its sixth season, it is the country's biggest sports league with 12 teams and matches spread over four months. Its viewership is second only to the IPL. These compelling numbers has seen it attract a title sponsor in Vivo mobile phones which shelled out Rs 3 billion for a five-year deal.

While there were high expectations from football, and it is likely to be met in the next few years, kabaddi has emerged as the jewel in the crown for Shankar's non-cricket play. The success and revenues generated from sponsors has managed to keep the media rights revenue banter on the sidelines for now.

GAME CONTROL

Receiving the EY Entrepreneur of the Year Award in the Entrepreneurial CEO category
Receiving the EY Entrepreneur of the Year Award in the Entrepreneurial CEO category

Star also has also got the Premier Badminton League and the Hockey India League, both popular sports, but not yet justifying its following through money generated for the network. While there might not be a viable business proposition for hockey, Shankar feels that it needs to be supported as the national game.

Probably something he can afford to do now, considering that Star has become the home for big-ticket cricket, controls kabaddi, and has reasonable say in the growing football story. "We are very satisfied. We believe while cricket is a very big sport in our country, it can grow bigger. When we got into sports, our strategy was clear, we will try and make cricket bigger than it is. And we will make ourselves home of cricket and along with that we will try to develop a few other sports. We have achieved both our objectives," Shankar told India Today in an interview after locking the BCCI rights.

With India looking good, both on the entertainment and sports portfolios, in December 2017 Shankar was elevated to president of 21st Century Fox, Asia, in addition to his duties as Star India chairman and CEO. It was in December again when the big bang announcement came that the Walt Disney Co. had sealed a $52.4-billion all-stock deal to acquire 21st Century Fox and other entertainment and sports assets from Rupert Murdoch's empire. Within this the Indian sports business alone would be contributing around $ 5.5 billion in asset value (calculated on Star India's valuation being $ 18 billion as per industry sources), underlining Shankar's role and the importance of the sports empire he has built for the group.

For Shankar, the sports + digital play will be top of mind as the first phase of laying the foundation and consolidation is over, and the next innings spread over 3-4 years will determine whether all these punts will bring the moolah, or if they will just remain bragworthy properties. With Hotstar leading the charge as the game resumes, it seems the former scenario is more likely with Shankar emerging top-scorer.