Ad revenues from brands on Star Sports are getting impacted due to the frequent rains during the ICC Cricket World Cup matches. This World Cup is seeing more number of washouts than the previous washouts of 2 matches each in the 1992 and 2003. To give you an idea of how big this world cup is for Star Sports, the channel changed all-time high from advertisers by selling a 10-second spot for Rs 25 lakh during the most awaited India vs Pakistan match.
Till now, 4 matches have been completely washed due to rain, including India vs New Zealand match which would have helped Star Sports to earn big. Currently, the channel is showing free time commercials on washout games. Even the loss due to rain in between matches is making things difficult for the sports network.
According to experts, because of the cancelled matches, Star Sports’ ad revenue has faced a loss of around Rs 140 crore. However, as the matched are insured, the broadcaster won’t see much of an impact. Because of the unpredictable weather, the insurance companies have increased their charges seeing the risk involved. Star is looking to compensate the losses through make-goods (commercials during wash-out games).
Talking about Indian Insurance companies, sources reveal that they can lose around Rs 150-180 crore on account of the three canceled matches of World Cup matches in the UK. The sum insured for a single match would be around Rs 60 crore. For special matches like finals or semi-finals, this can be around Rs 70-80 crore. For the India-Pak match, it was around Rs 125 crore.
Although, the risk is not for a single company. New India Assurance, General Insurance Corporation, ICICI Lombard General Insurance and Oriental Insurance are some names which typically do such business in India.
Numbers source: Economic Times