ICC TV rights deal: A foothold for ZEEL in cricket, a lever for Disney to focus on digital

The deal also signifies that the days of a single broadcaster owning all major cricketing rights are gone, say experts

e4m by Javed Farooqui
Published: Aug 31, 2022 9:08 AM  | 6 min read
zee star

Disney Star's strategic licensing agreement with Zee Entertainment Enterprises Limited (ZEEL) for exclusive TV rights of ICC men’s events from 2024-27 has taken most people in the media industry by surprise. After all, Disney Star won the ICC media rights only last week, and now, within three days, has sold a major portion of the rights to its rival ZEEL.

The Disney-Zee deal is a departure from the old strategy of buying sports media rights and building a walled garden around them to ensure exclusivity, which helped the rights owner to command high advertising rates.

Even though the financial details of the deals are under wraps, speculation is rife that ZEEL would have committed anywhere between $1.5 billion and $1.8 billion for the TV rights. The deal, which will come into effect in 2024, is likely to be funded through the cash infusion that will come from Sony Corp post the merger with Sony Pictures Networks India (SPNI), industry sources say.

With this deal, ZEEL has also announced its big bang entry into sports broadcasting after securing the media rights to UAE-based International League T20. Experts believe that the decision to acquire ICC TV rights would have been taken in tandem with SPNI. However, the two companies continue to operate separately since the regulatory approvals for the merger are still awaited.

The deal also signifies that the days of a single broadcaster owning all the major cricketing rights are gone. In the last couple of months, Disney Star had bought IPL, ICC, and Cricket Australia rights for a cumulative value of Rs 50,000 crore. Even if the payout for the rights is spread over four to five years, the investment is too much for a single broadcaster to manage.

By retaining the ICC digital rights for India, Disney Star has made it amply clear that its focus will be on scaling up the digital business. The Walt Disney Company has been shutting down its linear channels internationally to focus on expanding Disney+ globally. This strategy doesn't apply to India where the linear TV business is still going strong even as the digital growth is leapfrogging.

ITW Consulting MD Bhairav Shanth said ZEEL becomes a new player in the space with the ICC TV rights. He also believes that the increase in the number of broadcasters for different events means that viewers will have to access different services for their sports. This, he said, will ultimately continue to drive up the value of the sports media landscape.

With the majority of the cricketing properties getting decided this year, broadcasters will have to look at alternative sports to build their sports business. "Also, as cricket properties are limited, broadcasters might now look at other, non-cricket sports properties to distinguish themselves. This means more attention to the production and promotion of these sports, ultimately benefiting sports in the country as a whole. Moreover, fans will also have more easy access to them," Shanth said.

According to him, the $10-12 billion content investment in cricket over the next 5 years is to establish the platform to serve cricket’s digital-first audience and find new ways to engage and then monetise them. "Think of this spend as a spend on a highway network on which Indian sport’s broadcast commerce will run over the next decade."

Sandeep Goyal, MD, Rediffusion, says the deal is good for both the networks. “Star can now concentrate on the selling of IPL while Zee can put its fullest might behind the ICC offering. The arrangement is a bit unusual but cooperation is the new norm across industries,” he explained.

A veteran media professional with experience in running the sports broadcasting business in the past said that the ICC TV deal with Disney will give ZEEL a foothold in cricket. He also said that the deal will provide a lever for Disney to continue its strategic focus on digital.


Sports broadcasting will continue to be a three-horse race

The sports broadcasting genre will remain a three-horse race since Sony and Zee are in the process of getting merged. Disney Star will have IPL TV rights, ICC digital rights, Cricket Australia media rights, and Cricket South Africa media rights along with other non-cricketing properties. Sony-Zee will have ICC TV rights, and England Cricket Board (ECB) media rights besides other sporting properties. Apart from the IPL digital rights, Viacom18 will have a strong presence in football.

It is pertinent to note that Zee and Sony had lost out on both the IPL and the ICC media rights. By picking up the ICC TV rights, the merged entity will boast of a tentpole property that has been missing from the SPNI portfolio so far. Although ZEEL has re-entered the sports business, it doesn't have a sports channel. SPNI, though, has multiple sports channels in SD and HD.

Triplecom Media iTap Founder-CEO Kunal Dasgupta said that the escalation in rights cost has meant that a single broadcaster cannot digest all three rights. He also said that the ICC is an overpriced property when looked at from the lens of the lesser number of India matches. He also said that Disney Star will strengthen its balancesheet due to this strategic partnership.

"Sports rights will get divided between the three broadcasters. This is how it should be anyway, otherwise it's difficult to digest all the rights," he stated.

Speaking about the monetisation potential of the ICC rights, an industry source pointed out that the lack of exclusivity (TV and digital rights going to different players) will prove to be a big challenge for both Disney and Zee. "They also have to share the feeds with Prasar Bharati, which kills exclusivity and impinges monetisation," the source said.

Another media professional with experience in sports broadcasting said that the two parties must have agreed on the deal beforehand. "It has to be a prior agreement. It cannot be done after getting the media rights," the media professional said.

He also said that the swag of being the home of cricket is a thing of the past. He noted that sports media rights globally are getting fragmented and the global trend is now getting replicated in India. Disney, he said, has also sent out a signal that they want to bolster the digital business in a major way.


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