ESPN Challenges Cricket Contract

Walt Disney Co. and News Corp. are challenging in court the conditional award of Indian cricket TV rights to media firm Zee Telefilms Ltd., their ESPN Star Sports joint venture said Tuesday.

On Sunday, the Indian cricket board awarded Zee, India’s biggest listed media company, rights to telecast all of the Indian team’s home matches for the next four years. Zee had been in a fierce bidding war with ESPN.

ESPN said a hearing would be held Thursday.

Zee emerged the victor over the global TV heavyweight pairing after raising its bid to $308 million from $260 million, compared with ESPN Star’s $230-million bid.

The cost is equal to Zee’s sales over the last three years, but at stake is a potential revenue pie of as much as $350 million. Cricket corners more than three-quarters of sports advertising spending in India and draws tens of millions of viewers.

Provided Zee meets certain initial payment conditions, the Board of Control for Cricket in India has promised it 144 days of international cricket over four years starting in October.

ESPN Star filed its petition against the decision in the Bombay High Court, said a spokesman for ESPN Software India, which provides programming to ESPN Star.

ESPN Star said Zee was not qualified to bid because it did not have experience in broadcasting or producing live international cricket events as specified in the tender.

“ESPN maintains it is still the highest eligible bidder and charges that [the cricket board] violated the rules it laid down for the bidding process,” the ESPN spokesman said.

Zee said it did nothing wrong.

“We wouldn’t have been in the fray from the start if we were not eligible to bid,” said Ashish Kaul, a vice president at Essel Group, which owns Zee.

The cricket board declined to comment.