Reliance sets sights on scoring big with sports business

RIL will plug the only gap in its media and entertainment portfolio with the launch of its sports channels

e4m by Javed Farooqui
Updated: Sep 13, 2021 1:38 PM

Mukesh Ambani-promoted Reliance Industries Limited (RIL) has a strong presence in sports business through entities like sports management company RISE Worldwide, franchise-based football tournament Indian Super League (ISL), and Indian Premier League (IPL) franchise Mumbai Indians.

It also boasts of a massive media empire in the form of Network18 and TV18, which operates Viacom18 JV with American entertainment major ViacomCBS. It also owns stakes in content production companies like Eros International Media and Balaji Telefilms besides DEN Networks, Hathway Cable, and GTPL Hathway, which operate in cable TV distribution space.

In December 2020, RIL had acquired sports management company IMG's 50% stake in IMG Reliance for a cash consideration of Rs 52.08 crore. Subsequently, IMG Reliance was rebranded as RISE Worldwide. Football Sports Development Limited (FSDL), which owns and operates ISL, is a 65:35 JV between RIL and Disney-owned Star India.

Today, Mukesh Ambani's Media & Entertainment (M&E) empire spans TV broadcasting (news + entertainment), cable distribution, sports, film production, over the top (OTT), and publishing. Between these diverse M&E businesses, the one big missing piece was sports broadcasting.

The Oil-to-Retail conglomerate will soon fill that gap with the launch of its own sports channels. The sports broadcasting expansion will be undertaken through Viacom18, which is helmed by Network18 and TV18 MD Rahul Joshi. The company has already received licences from the ministry of information and broadcasting (MIB) to launch new channels, including sports.

To build its sports TV business, Viacom18 has roped in Anil Jayaraj as the CEO of Sports Business. Jayaraj is no stranger to sports business, as he spearheaded the ad sales division of the country's largest sports broadcaster, Star Sports. He spent over six years in nurturing and growing Star Sports' ad revenue from a diverse range of properties.

exchange4media had hinted in its report dated 9th August that the Reliance-backed company is venturing into sports broadcasting and has been scouting for talent from rival networks including Star India to build its team. Jayaraj had put in his papers at Star Sports in July after a 6.5-year stint.

As the head of the sports business, Jayaraj will face his biggest test when the IPL media rights will be put up for auction by the BCCI. As reported earlier, Reliance Jio will most likely mount a consolidated bid for the IPL rights. It will be in direct competition with Star India and Sony Pictures Networks India (SPNI) for the consolidated rights apart from tech giants like Amazon and Facebook who are interested in IPL digital rights.

If industry sources are to be believed, the International Cricket Council (ICC) is also expected to hit the market soon for awarding the next cycle of media rights. Star India is the incumbent rights holder for both IPL and ICC. It had acquired IPL media rights for $2.5 billion till 2022. For ICC, it had paid close to $1.8-1.9 billion for the eight-year rights till 2023.

Reliance's interest in sports and entertainment is driven purely by its synergistic nature with the telecom business. Reliance Jio is the country's biggest telecom operator with a total customer base of 440.6 million in Q1 FY22. Its data traffic during the quarter was 20 exabytes or 20 billion GB.

Speaking to exchange4media earlier, a source had noted that Jio has built the infrastructure to grow the digital viewership of a property like IPL by 3x to 4x on a base of 260-280 million viewers. “If Jio manages to win IPL media rights, the scale of the tournament will reach an unprecedented level. It will be a never seen before scale,” the source had said, on condition of anonymity.

The source had further stated that the launch of a sports channel will create a walled garden as users will not be able to go to any other platform outside Reliance Jio/Network18. “A sports channel will also bring in big bang sponsorship money to recover the high cost of acquisition,” the source added. “This kind of scale will also likely bring unseen levels of monetisation. Thus, also significantly impacting the value of media rights.”

Of late, Viacom18 has been on an acquisition spree. It has bought several football properties like LaLiga, Serie A, and Ligue1. The company has reportedly acquired the FIFA World Cup 2022 media rights for a princely sum of $55 million. SPNI, the incumbent rights holder for FIFA, is believed to have paid an estimated $105 million for 2014 and 2018 FIFA World Cups.

According to market sources, FIFA World Cup is the only football property that has seen inflation in rights value. “Most football properties that have come up for renewal have seen a decline in rights fee. FIFA World Cup is the only exception,” an industry source said.

Viacom18 has been experimenting with niche sports properties for the last 3-4 years. Its youth GEC MTV had acquired TV and digital rights of the now-defunct Super Fight League in 2017. Its biggest experiment with sports was in the form of the 2018 Nidahas Trophy tri-series featuring India, Sri Lanka, and Bangladesh.

Similarly, Colors Marathi had showcased Kusti Champions League in 2018. In the same year, Colors Kannada Cinema had aired the Kannada feed of ISL. The company's English GEC Vh1 along with Jio TV had aired the second leg of the semi-finals of Copa Del Ray in 2019. MTV had also teamed up with Indo International Premier Kabaddi League (IPKL) to telecast the tournament, along with DSport and DD Sports.

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