The after-effects of the bombing of Kites are coming out in the open. So miserable has the theatrical performance of the film been that it prompted Colors channel to renegotiate its deal with the film’s worldwide distributor, Reliance Big Pictures, for the satellite rights of the film.

To understand the exact impact of the flop, one first needs to understand the deal between Reliance Big Pictures and Colors. Anil Ambani’s company reportedly sold the satellite rights of Kites and Raavan to Colors in a combined deal alongwith the second-run rights of a library of 20-odd films, for Rs. 45 crore. The second-run rights were exclusive rights of films after the completion of 18 months (of which more than 12 months are already over) for which the first-run rights were sold to another channel. Colors also holds the syndication rights of the old library.

Once Kites bombed in the cinemas, Colors was quick to tell Reliance Big Pictures that it would not be able to pay Rs. 45 crore as agreed upon. The main argument it put forth before Reliance Big Pictures was that the channel had struck a deal for Kites as a Hindi film but it had turned out to be an English film. After a lot of discussions, the deal amount was reduced by 33%, to Rs. 30 crore. It is learnt that Colors even offered to forgo the signing amount of Rs. 2.5 crore it had paid Reliance Big Pictures if it did not agree to bring down the price to Rs. 30 crore.

“The main argument it put forth before Reliance Big Pictures was that the channel had struck a deal for Kites as a Hindi film but it had turned out to be an English film.”

It may be noted here that Colors is said to have put forth the very argument which Reliance Big Pictures used in its court battle against Percept Picture Company in the case of Aashayein. Reliance Big Pictures had told the court that it would not honour its agreement for distributing Aashayein worldwide because after watching the film in a preview show, it felt the film was not what it had bargained for. Colors told Reliance Big Pictures that similarly, Kites was not the film it had bargained for.

“Reliance Big Pictures used in its court battle against Percept Picture Company in the case of Aashayein.”

Meanwhile, it is learnt from reliable sources that Colors has sold the syndication rights of the old library of films which are covered under the deal with Reliance Big Pictures, to NDTV Imagine for Rs. 12 crore. So, effectively, the risk of Colors in acquiring the satellite rights of Kites and Raavan is to the tune of Rs. 18 crore only (the renegotiated amount of Rs. 30 crore minus Rs. 18 crore being the revenue for sale of syndication rights of old library).

It may be mentioned here that going back on a contract is quite unheard of among television channels. Circuit distributors have since times immemorial been known to renegotiate terms if a film does not carry good reports but it is not usual for TV channels to go back on their commitments, whatever the box-office fate of the film in question. But Kites has changed all that.

The case of Colors and Kites underlines the fact that television channels are paying unrealistically high prices to films without waiting for their box-office results because most deals for satellite rights of big films are concluded before their theatrical release. This would probably change. In the alternative, prices for satellite rights would come down to more realistic levels. In either case, the losers would be the producers because, after all, barely 15% of the films manage to fare well at the ticket windows.

By Komal Nahta

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