Rs 550 crore — that is the amount that Hrithik Roshan is believed to have been paid in an exclusive deal with a TV network, in return for the satellite rights of all his films that will release in 2017, beginning with Kaabil in January.

With the deal, Hrithik has broken the record set by Salman Khan when he inked a Rs 500 crore agreement with the Star network for satellite rights to all his films released between 2014 and 2019.

Just a little while ago, there were rumours that Varun Dhawan too had scored a huge Rs 300 crore deal for the satellite rights to his films in 2017, excluding Judwa 2.

Just what do satellite rights deals entail?

Hrithik Roshan is seen with his sons Hrehaan and Hridhaan in this photo, uploaded to Facebook. The actor is believed to have signed off the satellite rights for all his films for 2017 for Rs 550 crores.

 

The satellite rights of a film give a TV network/channel the exclusive privilege of premiering and broadcasting certain films on the small screen.

These deals are brokered between a production house and a TV network (or an actor and a channel) for specific films or a certain number of films as a package.

The rights may be sold before the film releases — in which case, money from the satellite rights can be used to defray shooting costs — or once it is in theatres, where producers may directly count it as part of their gross earnings.

How did the race to bag rights become so intense?

While major satellite rights deals have been announced by TV networks before, the Salman Khan five-year contract was the first of its kind in many ways, and not just for the staggering amount of money involved.

It gave the Star Network an undisputed fillip — last year, when Bajrangi Bhaijaan and Prem Ratan Dhan Paayopremiered one of their channels, they received a huge boost in TRPs.

Star India had signed a similar deal with Ajay Devgn, buying rights to several of his old and upcoming films for Rs 400 crore. This included money-churners like Singham and the Golmaal franchise. Devgn’s film premiers brought the TV network TRPs (television rating points) in excess of 6.2 on three occasions — 2.5 is considered a successful benchmark in the industry. Devgn’s deal ends in 2017 — and there is not much information at this point on whether or not Star will renew the contract.

Why would the network not renew a contract though?

Deal with Hrithik to the contrary — and as of now, there are no details yet on which network has secured the deal, or even if the agreement has actually been signed — 2015 onwards has seen a steady drop in the general rate being offered for satellite rights by TV channels.

Experts have said that the “drop” is more a “correction” — they point out that prices had skyrocketed in the first place because there were a plethora of new TV channels, all in the General Entertainment (GEC) domain, that had been introduced. GECs — both the new and the older ones — were looking to capture the highest TRPs, and a Bollywood blockbuster seemed like a sure formula to get the audience numbers.

Last year, Mint carried an extensive report on how the general euphoria over satellite rights seemed to have faded. With budgets exhausted by mega deals (and with exclusive contracts with some stars precluding the possibility of inking deals with other actors) channels were missing out on surprise hits — like a Tanu Weds Manu.

Films that would have garnered a cool Rs 25 crore in satellite rights — like a Welcome Back — now could close deals only in the vicinity of Rs 12 crores.

There were still a few major deals — it is said that Dilwale earned Rs 60 core by selling satellite rights, while Bajirao Mastani got about Rs 50 crore.

Baahubali, it was said, had got Rs 20+ crores — only for the satellite rights to its dubbed Hindi version. Rights for the Telugu and Tamil versions were sold separately, to different channels, making its total haul considerably larger.

These numbers, however, are not confirmed.

In fact, contradictory reports peg the Dilwale satellite rights deal as being closer to Rs 35-40 crore in the changed scenario and Bajirao Mastani at 35.

And for Fan this year, widely different reports pegged the satellite rights sale at Rs 80 core — or Rs 55 crore.

It must also be noted that none of the parties involved — production houses, studios, actors or TV networks — ever confirms the figures for these deals. In an older interview, Star India honcho Sanjay Gupta had said the numbers quoted in media reports “are conjectural”.

In the current scenario, some films struggle to find buyers (2 States apparently did) but others, like Dhoom 3, have coasted home.

It must be noted here that Aamir Khan is not among the superstars who factors in satellite rights when calculating his films’ profits. His PK was supposed to be among the landmark deals of the small screen, with its rights sold for Rs 85 crore. Aamir has not commented on the number, although he has said in an interview that satellite rights are lower now than they used to be, and that producers will now have to “factor in the reality”.

Against this background, how does the Rs 550 crore deal with Hrithik make sense?

One reason is the past performance of his films — Bang Bang, Agneepath, Zindagi Na Milegi Dobara and Krrish 3have all been 100-crore+ earners, and the anticipation is that his future films will work as well.

What is clear, however, is that the trend of humongous satellite deals with stars — downswing be damned — is far from finished.