And the IPL media rights go to…
As the bidding for the IPL rights is scheduled to open today, we take a look at the speculations on the amount BCCI can procure from the auction and the property’s brand power
Published - Sep 4, 2017 7:30 AM Updated: Aug 21, 2019 5:28 PM
With two dozen companies bidding for the broadcast and digital rights of the next five years of the Indian Premier League (IPL), the market is abuzz with speculations. According to our estimates, the rights could fetch cricket body Board of Control for Cricket in India (BCCI) around Rs 15,000 crore looking at IPL’s brand value. There are also talks about an international digital firm wanting to form a consortium with an Indian television channel but the concerned parties have refused to comment.
In its tenth year, the property is worth Rs 34,000 crore ($5.3 billion) and has posted a 26 per cent increase in its overall business from Rs 27,000 crore ($4.2 billion) last year. The league has seen a three-year CAGR (compound annual growth rate) of 13.9 per cent according to Duff & Phelps, a global valuation and corporate finance advisory.
The same advisory estimated that the TV rights could fetch the BCCI close $1.8 billion (Rs 11,540 crore) for five years.
The bidding story
Besides broadcaster majors Star India, Sony Pictures Network and Discovery Communications, new entrants in the digital category include Reliance Jio Digital, Amazon Seller Service, Yupp TV, Airtel, Twitter, ESPN Digital Media, Times Internet, Facebook, Yahoo, BAMTech and DAZN/Perform group, among others. A relatively new entrant in sports broadcasting space, Discovery Communications’ DSPORT is rumoured to be bullish about its bidding.
BCCI has made few key changes in the process. IPL media rights are divided into three categories: television rights for the Indian subcontinent, digital rights and five international media rights (in Middle East, Africa, Europe, the US and rest of the world).
BCCI from its last deal with Sony reportedly fetched Rs 6,700 crore across the ten-year period. It has to be noted that in 2008, the Singapore-based World Sports Group bagged the IPL television rights for a ten-year period with a $918 million bid. It simultaneously signed a deal with Multi Screen Media Pvt. Ltd. (MSM) that Sony would be the official broadcaster.
Sony Pictures Network earned reasonably well over the decade starting from Rs 300 crore in the first season to Rs 1300 crore in the tenth season.
When it comes to digital rights, most of the above mentioned players will make an aggressive bid for it. According to Duff & Phelps, the internet and mobile rights could land in the region of $210 million (approximate Rs 1344 crore). In February 2015, Star India had got the internet and mobile rights for three years for Rs 302.2 crore. In 2015, its OTT platform Hotstar netted advertising revenue of around Rs 50 crore, followed by Rs 65 crore in 2016 and Rs 150 crore in 2017, according to media reports.
This year, Hotstar had signed up five marquee sponsors: Vivo, Maruti Suzuki, Reliance Jio, Dream 11, and AMFI. The sponsorship deals with Vivo and Maruti Suzuki are reported to be of Rs 20 crore each.
Bringing IPL to this stature
Vinit Karnik, Business Head - Entertainment, Sports & Live Events at GroupM, points out that IPL’s fixed timing has worked to its favour and kept the brand relevant. He says, “For the first time in the country you have a sporting league with a fixed calendar which makes the life of a marketer easy as he can plan launches, communication and campaigns around IPL.”
Then comes its positioning as an entertainment segment with a dosage of cricket through its campaigns like ‘Manoranjan ka Baap’, ‘Jumping Japang’ to ‘10 Saal Aapke Naam’ according to Neeraj Vyas, Senior EVP & Business Head – Hindi Movies and Music Cluster at SONY SAB, SPN. He says, “From an advertiser’s perspective, brands want to be around IPL because it cuts across all geographies and builds a reach faster than anything else. That is its biggest advantage.” The same entertainment quotient brought in women audience.
A mention has to be made of its cumulative reach which grew from 102 million in season 1 to 411 million in season 10, according to SPN. This has to be attributed to the distribution of Hindi movie channel Sony MAX. Vyas points out, “Sixty-nine per cent of the numbers has come from Max this year.”
Despite the property hit by so many controversies from the betting fiasco that led to the ban of Chennai Super Kings and Rajasthan Royals for two seasons to the rigging bidding deals by Lalit Modi, IPL’s brand image hasn’t been tainted. N Chandramouli, CEO of TRA, explains, “The audience didn’t change. They felt the game is safe, as the owners have cheated.”
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So, it’s no surprise that all the above factors have made IPL the favourite for brands to leverage at a premium cost in the tenth season. Amazon India, Vodafone, Pepsi, Maruti Suzuki and Parle rolled out their campaigns especially for the league. Rohit Gupta, President – Network Sales & International business, SPN, shares that around 35–40 brands across categories come in every year and that the 10 years have seen major launches with the best creatives. “Brands are spending Rs 40–50 crore over two months. There is pressure on creative agencies to bring out the best. An ecosystem has developed around IPL.”
Siddharth Banerjee, EVP-Marketing, Vodafone India, points out that the league has provided a platform to innovate. Vodafone India happens to be the only Indian brand to associate with the property since its inception. The brand reserves one third of their marketing budget for IPL. It has successfully reaped the fruit of its 10-year labour, given the ‘multiplicity of communications it offers’. He shares, “The 10-year-long association with IPL has created a winning formula for Vodafone and given us a positive ROI. We have always aligned our communication goals around IPL with our key business objectives.”
YES Bank which has associated with the IPL in the past reportedly saw a media value of Rs 58.12 crore delivered for the bank, courtesy the first 20 matches of the 2017 season. Rajat Mehta, Senior President, Marketing and Corporate Communication, YES Bank shares, “YES Bank has further leveraged IPL content rights to attain global leadership within the BFSI segment not only in India but across the world. This year, we used our video and digital rights to achieve 235 million impressions by reaching over 30 million fans; our video views were at a staggering 52 million.”
New categories were born out of IPL, including the Indian handset category with the likes of Karbonn and Micromax. There was even participation from digital wallets like PayTM and Freecharge. Gupta shares, “Three to four years back, there was ecommerce category. Amazon was the first one to come into IPL.” Last year, the handset category contributed to 20 per cent of IPL’s advertising revenues, the highest among all categories.
Will Yang, Brand Director, Oppo India, had shared earlier that IPL has helped it generate increased brand awareness, putting it ahead in ‘top of the mind recall’ brands. “Our association and investment during the IPL period has helped us in connecting with not just current customers but potential consumers as well,” he said. The Chinese handset firm was IPL’s presenting sponsor last year.
IPL’s infectious brand energy and success pulled in FMCG majors like Hindustan Unilever, Godrej and Reckitt Benckiser and invariably Chinese mobile handset players like Vivo, OPPO, Gionee and Lenovo-owned Motorola.
Looking at the above historical viewership data, advertising revenue and active participation by brands over the course of 10 years, the league is only set to grow at least for the next five years, according to Karnik, who believes the ‘property has proved its merit over the last 10 years.’
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