Monday, March 19, 2007

How ThaiBev got two World Cups for only $7.5M

Thai football fans were able to watch all 64 FIFA World Cup matches uninterrupted for the first time.when DhosPaak, the Thai Beverage Plc subsidiary, bought the 2006 broadcast rights. Then Managing Director Vorawoot Rojanaparnich had been able to persuaded his ultimate boss, Charoen Sirivadhanabhakdi, to televise every match continuously with no TV commercials. The move proved lucrative for Beer Chang, ThaiBev's flagship beer. The company drew some complaints when it asked pub and restaurant operators for "co-operation" in selling only Chang beer in exchange for permission to broadcast the games but the gripes faded when huge crowds of feverish fans came to see the games each night. By the time the final whistle of the 2006 World Cup blew, Mr Vorawoot told Woranuj Maneerungsee and Walailak Keeratipipatpong of the Bangkok Post, sales revenue from Chang beer had reached 6.5 billion baht, an 80% market share in the low-priced beer segment.

After five years at DhosPaak, Vorawoot decided he wanted his own business. ''It was time for me to benefit from managing the broadcasting rights,'' he recalled. After a discussion with RS Plc CEO Surachai Chetchotisak, the two joined hands to set up RS International Broadcasting and Sports Management Co (RSbs) last November. Mr Vorawoot put up half of the initial capital of 50 million baht and became the operation's CEO. To secure the television rights for the World Cup in 2010 and 2014, Mr Vorawoot relied on long-time connections he has made with prominent figures in sports built since he was a sports reporter more than three decades ago. It also helped that he sits on the board of the Football Association of Thailand along with Secretary-General, now FAT President, Worawi Makudi.

According to the Bangkok Post Worawi, who holds executive positions with the Asian Football Confederation and the world football body FIFA, helped Vorawoot secure the broadcasting rights for the 2002 and 2006 World Cups at a very low fee. ''I told the FIFA men that I would use the game to entertain Thais via free TV, not through paid channels,'' Vorawoot said. His offer convinced FIFA and DhosPaak landed the two tournaments for just US$7.5 million. Some operators in Asian countries paid as much as $5.5 million for just one tournament but charged viewers to offset the costs.

With RSbs, Vorawoot used the same ad-free proposal to win the rights for the 2010 and 2014 World Cups, although he did not disclose the price. Besides television, RSbs gets exclusive rights for additional media, including broadband Internet, electronic media, radio, literature and even the tournament logo.

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