All eyes on IPL media rights tender as BCCI completes auction of two new teams

The Board's earnings are set to skyrocket with the addition of the franchises, which are expected to fetch at least $5 billion or more

e4m by Javed Farooqui
Updated: Oct 26, 2021 8:55 AM



With the successful conclusion of the two new Indian Premier League (IPL) teams, the focus has now shifted to the upcoming IPL media rights auction, which is expected to fetch at least $5 billion or more to the Board of Control for Cricket in India (BCCI).
Last month, the IPL Governing Council had announced that the IPL media rights tender for the 2023-2027 cycle will be released immediately after the announcement of the two new teams on 25th October. “The IPL Media Rights tender for the cycle 2023-2027 will be released immediately after the appointment of two new IPL teams, which is scheduled to be announced on 25th October 2021,” the IPL GC had said in a statement.
The BCCI wants to checkmate the International Cricket Council (ICC) by auctioning IPL media rights before the international cricket body can sell off its India rights package for a period of five years. The ICC media rights are held by Star Sports till 2023. The sports broadcasters had paid close to $2 billion for the eight-year cycle. 
The BCCI has sold the two new franchises for approximately Rs 12,715 crore. RPSG has bid Rs 7090 crore to win the Lucknow franchise, while Irelia Company Pte Ltd (CVC Capital Partners) bagged the Ahmedabad franchise with a winning bid of Rs 5625 crore. The Adani Group lost the Ahmedabad franchise narrowly with a bid of Rs 5100 crore.

The new franchises will participate in IPL from 2022 season onwards which will comprise 10 teams and will have 74 matches, wherein each team will play 7 home and 7 away matches. The BCCI's earnings will see a huge growth due to the addition of the new franchises.

According to an experienced media professional, the IPL team auctions will set the ball rolling for the BCCI to auction the IPL media rights. “It is difficult to predict the IPL media rights value, but if we take the current five-year rights value as the base price, then it should easily cross $5 billion. The interested players for IPL rights would be Star, Sony, Reliance and Amazon. The upcoming auction will elevate the status of IPL globally as a valuable sports property,” the professional said.

A top-level official from a leading media company said that the IPL media rights tender will come any time soon, as indicated by the BCCI. He also feels that the IPL media rights value will gain from the fact that two new franchises have been sold at over Rs 12,000 crore. “The auction of two new teams will boost the overall value of IPL including the media rights. The IPL media rights value will only go up further than what was anticipated earlier,” the official said.

The professional quoted above had a different take. He said that buying an IPL franchise and acquiring media rights are two different things. “Buying an IPL team is like buying an IP for perpetuity. Even if the new franchises don't make money for the first 10 years, they have time to build this business and become profitable since the team is owned for perpetuity. Unlike a franchise owner, the media rights' holder will only own the rights for five years. They will have different considerations while deciding on the bid amount for the property,” the professional stated.
A senior BCCI official had recently told PTI that there is a well-known US-based company that did send BCCI feelers some time back, expressing their serious interest in bidding for IPL media rights. “With 10 teams playing IPL from 2022, the matches will go up to 74 and in any case, the valuation of the property increases,” the official had said.

“But with two new teams about to fetch anything between Rs 7000 crore to 10,000 crore, the broadcast rights are certainly going to shoot through the roof. So expect the IPL broadcast rights to go for anything above USD 4 billion and may be up to USD 5 billion,” the official had stated. 
Disney-owned Star India is the incumbent media rights owner of IPL till 2022. It had paid Rs 16,347.5 core to acquire the rights for five years. The IPL media rights holders will have to pay a higher fee to the BCCI for the 2022 season. As per the agreement between BCCI and Star India, the board had received Rs 4086.87 crore of the media rights payment in the first year and will receive Rs 3065.15 crore each in the subsequent years.

For IPL 2022, Star might have to cough up an additional Rs 715.2 crore for the additional 14 matches, at Rs 51.08 crore per match. With a Rs 3065.15 crore payout for 60 games, Star is paying an estimated Rs 51.08 crore per game for the IPL.

The auction of two new teams has set the momentum for the BCCI to rake in big monies from the IPL media rights auction, which is expected to see participation from Star India, Sony Pictures Networks India (SPNI), Reliance Jio-Viacom18, and Amazon.

As reported earlier, the upside in media rights value will be determined by the competitive intensity due to the entry of new players (Viacom18 and Amazon), expansion of the tournament through two new teams resulting in more number of matches, and the fact that it is a profitable property. The value of the next five-year cycle of IPL media rights is projected to be anywhere in the region from Rs 24,000 crore to Rs 40,000 crore depending on the bidding frenzy.

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