Broadcaster Sony, Dentsu trade legal notices over IPL ad agreements: report

21 August 2008

Mumbai: Broadcaster Sony Entertainment Television and advertising agency Dentsu India seem to be headed to the courts in a dispute around the success of Indian Premier League (IPL) 2008, The Economic Times today reported.

It said that s that broadcaster Sony withdrew from an agreement after selling almost Rs100-crore worth of ad inventory for IPL to ad agency Dentsu, 10 days after the tournament started.

Dentsu is reported to have acquired 800 seconds of advertising inventory for each of the 59 IPL matches, at a fixed base price of Rs2.1 lakh per 10 second slot. That makes an inventory total of 47,200 seconds, valued at around Rs99 crore.

For its part, Sony was to directly sell an inventory of 1,200 seconds per match to five large sponsors, averaging around 240 seconds per sponsor.

In effect, that made Dentsu the aggregator of all open advertising inventory for the IPL, with the entire retail advertising inventory being owned by the agency. Dentsu would then have exclusive rights to sell the inventory directly or through partners in its buying consortium.

However, 10 days after the IPL tournament started, IPL ratings far exceeded expectations, and even beat Start TV's premium eye-ball gatherer ''Paanchvi Pass'' by a very large margin. With Dentsu owning the marketable advertising inventory, Sony had no opportunity to harvest a windfall from the higher-than-expected ratings, which led to its decision to exit the deal with Dentsu and sell ad spots to clients itself at rates higher than what Dentsu had paid.