Media Rights: BCCI real winner as IPL value jumps 196%
According to BCCI Secretary Jay Shah, the league has now become the second most valuable sports property globally
The Indian Premier League (IPL) media rights e-auction is finally done and dusted. Disney Star India, Viacom18, and Times Internet were announced as the winners of different packages. However, it is the Board of Control for Cricket in India (BCCI) that has emerged as the real winner with the IPL media rights fetching a record Rs 48,390 crore or Rs 118.02 crore per match over the next five-year cycle from 2023 to 27. The media rights value fell short of Rs 1610 crore to touch the magic figure of Rs 50,000 crore.
The media rights value for the next media rights cycle comprising 410 games has recorded a huge appreciation, of nearly 196 per cent, over the Rs 16,347.5 crore that Star paid for the previous five-year cycle at Rs 54.5 crore per match. After being with a single player for the last five years, the IPL TV and digital rights will now be owned by separate companies which will have huge implications on both viewership and monetisation front.
After a three-day gruelling battle for one of India's most loved media properties, BCCI Secretary Jay Shah on Tuesday officially declared Disney Star India as the winner of TV rights for the India sub-continent with a bid of Rs 23,575 crore. He also stated that Viacom18 has won the exclusive and non-exclusive digital rights package for Rs 23,758 crore.
In terms of media rights for international territories, Shah revealed that Viacom18 has won the international media rights for Australia, South Africa, and the UK while Times Internet bagged the Middle East & North Africa (MENA) and US rights. Package D comprising global territories outside the Indian sub-continent also called Rest of World (ROW), received bids worth Rs 1058 crore or Rs 2.58 crore per match.
The third day of the e-auction began with Disney Star and Viacom18 slugging it out for Package C rights. After a bidding war, Viacom18 cornered Package C rights with a payout of Rs 3,257.52 crore for five years. The per match value for Package C stands at Rs 33.24 crore. Package C includes the opening match, playoff matches, and double-header matches which are scheduled to start between 7 pm and 9 pm. Depending on the format, each season will have 18 to 22 non-exclusive games.
With Viacom18 winning both digital packages, the IPL matches will stream exclusively on Viacom18/Jio platforms. The aggressive stance by Viacom18 to retain the Package C rights has dashed the hopes of Disney Star India which was desperately looking to grab the non-exclusive rights for its Disney+ Hotstar platform.
Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Limited (ZEEL) were unlucky as neither company was able to win any of the packages. Going into the e-auction, SPNI is believed to have identified TV rights as its key target while ZEEL had decided to go after digital rights.
The main highlight of the three-day e-auction was the fact that digital overtook TV in value. Viacom18's Rs 23,758 crore bid for digital rights was higher than Disney Star's Rs 23,575 crore bid for TV rights.
Following the conclusion of the e-auction, BCCI Secretary Jay Shah tweeted that IPL has become the second most valuable property globally. "Since its inception, the IPL has been synonymous with growth & today is a red-letter day for India Cricket, with Brand IPL touching a new high with e-auction resulting in INR 48,390 crore value. IPL is now the 2nd most valued sporting league in the world in terms of per match value!" Shah said in a series of tweets.
He also said that the BCCI, its state associations, and IPL franchises will work together to bring world-class cricket action to the fan. "Now, it’s time for our state associations, IPL Franchises to work together with the IPL to enhance the fan experience and ensure that our biggest stakeholder – ‘the cricket fan’ is well looked after and enjoys high-quality cricket in world-class facilities," Shah noted.
Expert views on IPL media rights
Media Partners Asia VP Mihir Shah said that the fact that digital rights value is higher than television showcases the scale and future potential of streaming in India. He noted that Disney will have to capitalise on TV ad growth of 8-10% p.a. though growth in affiliate fees may be challenged due to rate regulation and growing adoption of CTV.
“The new streaming platform from Reliance-controlled Viacom18 will leverage from gaining Day 1 access to Jio’s 400 million broadband customers. Moreover, the rights value could be justified as the venture aims to address a much larger revenue pool of video, data, and e-commerce," Shah said.
Elara Capital SVP Karan Taurani noted that 49% of media rights is from digital, however, this segment accounts for a mere 22% of revenue. "We believe the hefty premium paid by Viacom18 is more from a strategic standpoint, to benefit 1) Jio subs retention (possibility of a bundling plan) and 2) improve valuation for the OTT platforms. Digital media revenues are estimated to grow at a faster pace of 30% (SVOD and AVOD), whereas TV revenue is estimated to grow in a narrow band of 6-8% over the next five years."
With the TV and digital rights going to separate players, Taurani foresees a stiff competition between Disney Star and Viacom18 for ad dollars. He believes that new-age categories will swing towards digital while traditional categories will bet on TV.
"In terms of advertising verticals, key segments like e-comm, FMCG, auto, and banking dominate the overall ad pie across TV and digital (60% of the ad pie). However, in case of IPL rights being sold separately, we expect stiff competition within the TV and digital platforms for advertising budgets. We expect some verticals like fintech, commerce, Ed-tech, and EV to see a rapid shift towards digital, whereas FMCG and auto will continue to rely heavily on TV for their mass campaigns," he stated.
A veteran sports media executive said that the TV and digital have their inherent strengths and weaknesses when it comes to IPL. "TV is an established medium which will allow the broadcast rights owner to monetise IPL on an immediate basis. Digital is a growing medium which will get its due share of subscription and ad dollars as the market expands," he stated.
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