Undeclared billions from SEAG broadcasts?

It isn’t over.

The public talked about all the money that was spent in staging the 30th Southeast Asian Games. But what about all the money that the broadcasts of the Games earned?

Even before The STAR exposed the P55.9-million price tag on the SEA Games’ cauldron, legislators were already questioning the budget for the event, which was 20 times what the Philippine government spent when it last hosted the biennial meet just 14 years ago. The cauldron appeared to be merely the tip of the iceberg. Inquiries soon spread laterally to whether or not government procurement procedures – specifically bidding – were even followed in the mad dash to put on a great show. Then, other items on the two-page budget came under scrutiny, as PHISGOC officials tried to deflect the questions by blaming the Philippine Sports Commission and even Congress itself for delays in budget disbursement and procurement. The STAR also discovered that the PSC released an additional P522 million to ensure the efficient conduct of the Games. But all the questions so far have inky revolved around the money that went out. Thus far, government regulators and the national and sports media have only been looking at one side of the ledger: how much was spent.

What about all the money that came in?

Major SEA Games event sponsorships were pegged at a million US dollars up, though some available smaller packages were merely in the hundreds of thousands of pesos. But what remains unaccounted for and has no paper trail is all the revenue from broadcast rights for the 12 days of competition and ancillary events leading up to it.

Before we extrapolate a ballpark figure for the unaccounted income, let’s explain how broadcast entities make money. Bear with me. A broadcast producer (a network or independent) spends money either creating or acquiring content. Creating content means hiring and paying writers, directors, actors, editors, crew and the like. Acquiring the broadcast rights to an event like the Miss Universe pageant, Olympics, NBA, World Cup, Asian Games, SEA Games and so on means paying a fixed fee to be allowed to broadcast in a limited geographical area like your country. Then you either pay another fee for the commentators, or send your own to the site of the event, or have them commentate while watching the event off-tube. You then package the broadcast as a product to sell to advertisers. Advertisers have the option to place 30-second TV or radio ads, have their logos flashed onscreen, get their products shown on the air, and so on. They basically rent a piece of the airtime that the producer paid for. For the 30th SEA Games, the Philippines had the rights to the event in its entirety or any of the 56 sports individually, and thus could determine for how much to sell those rights to the 10 other participating countries and other interested parties.

In the Philippines, a top television program, say a primetime evening newscast, can charge up to P1 million for every 30-second ad placement (in a maximum of four-minute blocks per commercial break). In theory, you are allowed up to 15 to 16 minutes of ads for every hour, though networks are hardly policed. This does not include other revenue streams like live mentions, product displays and so on. So you are looking at a minimum of roughly P30 to P32 million per day for every high-rating hour of prime time programming, give or take.

Here’s the best part: organic live events like sports competitions are exempted from the limit on number of ads, since natural breaks in action are unpredictable. Thus, most sporting events have the potential to earn more. That gave birth to the “television timeout” twice a quarter during basketball games, for example. This is also why boxing matches are prerecorded, so that the breaks in between rounds may be extended and filled with even more commercials. (In 1988, a grave abuse of this exemption led to the audacious 21-minute barrage of commercials right before the broadcast of the 91-second Mike Tyson knockout of Leon Spinks.)

Since broadcasting is not the SEA Games organizers’ core competence, they generally contract an international broadcast group to create broadcast packages, provide uniformity, and ensure the highest possible revenue. For most ASEAN countries, football and other Commonwealth sports are top sellers. Indonesia and Malaysia have great demand for e-games. For the 30th SEA Games, the name NEP Group, Inc. came up as host broadcaster. On their website, they say NEP is based in Pennsylvania and has existed since 1984. They have been involved in large international TV productions such as Game of Thrones and live broadcasts of UEFA matches, the Oscar Awards and the Olympic Games. This means that they acquired the international broadcast rights of the entire SEA Games. If so, they could therefore sell those rights piecemeal or in their entirety not only throughout ASEAN, but elsewhere. If a single hour of in-demand television in the Philippines can pull in P32 million, we can factor in higher advertising rates for other countries and event premiums on top of that. Then, we are seriously looking at billions of pesos in revenue. Add to this the accepted practice of “pay before broadcast (PBB),” and you have a huge inflow of cash, easily in the billions of pesos.

The question now is how much was really earned from selling the broadcast rights of the SEA Games and all its sports to those other territories.  We may never know the exact amount that was earned for the SEA Games unless the information is volunteered. But given that it was government money that was used to put together the SEAG in the first place, shouldn’t the government get a substantial share of the income generated? This would go a long way in getting back at least the extra public funds spent to prevent any mishaps on the part of the organizers.