If you thought the BCCI was rich earlier, it has just gotten a whole lot richer. On Tuesday, the media rights for Indian Premier League were sold for the next five years for a collective sum of Rs 48,390.32 crore.
In September 2021, Viacom18 (a joint venture between Reliance’s TV18 and US-based Viacom CBS c/o Paramount Global) picked up the 2022 Fifa World Cup broadcast rights for the Indian sub-continent. The value paid was Rs 450 crore, or roughly $58 million.
It sent shockwaves through the Indian sports broadcast ecosystem that has been dominated by two players – Star Sports (now owned by Disney) and Sony – for the past decade. Why? Just the numbers were staggering. Sony had paid $60 million for two Fifa World Cup editions previously – 2014 and 2018. In 2010, Star had paid $12 million for the same Fifa broadcast. Considering how the INR-USD valuation has changed during this timeframe, it is staggering money for one stand-alone tournament.
Even so, the tectonic jolt came in early 2022. Star India’s former boss Uday Shankar picked up a 39% stake in Viacom18. Shankar had played a pivotal role in Star Sports’ clean sweep of all available cricket properties since 2018 – IPL, ICC and Indian bilateral cricket – and the development of its digital property Hotstar. Back then Star India was part of 21st Century Fox, before the business was sold off to Disney.
As also widely noted in the broadcast ecosystem, Shankar – and his partner James Murdoch (former CEO of 21st Century Fox) – had entered into this JV with Reliance-Viacom solely for the purpose of building a new sports business. From that moment onwards, the clock began ticking down to the IPL media rights’ auction for 2023-2027.
Big payday for the BCCI
For the previous 2018-2023 cycle, the IPL media rights had fetched Rs 16,347.5 crore for 300 games across five seasons. It amounted to Rs 54.5 crore per IPL game for 60 games every season (the overall value increased to Rs 17,110 crore because the 2022 IPL season had 74 games). Star Sports (then c/o of Star India) was the big winner in the 2017 auction – it exploited TV rights for five years and built a 40-million plus subscriber base for Hotstar.
This time, the value has nearly tripled to Rs 48,390.32 crore (roughly $6.2 billion). It amounts to Rs 118 crore per IPL match for the next five years (74 matches in 2023 and 2024, 84 matches in 2025 and 2026, and 94 matches in 2027).
And, the devil is in the detail.
Disney (Star Sports) has retained the TV rights (Package A) at Rs 23,575 crore, i.e. Rs 57.40 crore per match for 410 matches. Viacom18 won the digital rights (Package B) at Rs 20,500 crore (Rs 50 crore per match for 410 matches). It also grabbed Package C at Rs 3,273 crore (Rs 33.24 crore per match for 98 matches) that ensured digital exclusivity.
Package C is where the value per match skyrockets. This is a collection of select games – season opener, night games on double-header days and knockouts – that were available non-exclusive for digital broadcast. Disney went hammer and tongs to gain this package in order to compliment its TV broadcast and retain value for its Hotstar subscribers. Viacom18 went higher, simply because it did not want to lose exclusivity for its digital content.
(Note: Packages A, B and C are for Indian Territory only. The remaining minuscule value is made up of overseas rights, i.e. Package D is split between Viacom18 and Times Internet for various territories.)
Digital numbers skyrocket
It provides for staggering contrast to the 2018-2023 cycle. While Star’s valuation of Rs 54.5 crore per match was an overall one across both TV and digital, the highest individual digital bid was from Facebook for Rs 3900 crore, i.e. Rs 13 crore per match (300 matches across five seasons). For the same, Airtel had put in a bid of Rs 3280 crore while Reliance’s Jio had put in a bid of Rs 3075 crore. Now, five years hence, Viacom18 (read Reliance) has won these rights for approximately 7.8 times that value.
Disney/Star’s TV valuation has only grown from Rs 54.5 crore to 57.40 crore in five years. Sony’s individual TV bid in 2017 was Rs 11050 crore, i.e. Rs 36.8 crore per match. Moreover, Sony reportedly put in the second highest bid this time too for TV rights after Disney, and surprisingly not Viacom18. There is suggestion that Viacom18 was ready to compromise on the TV valuation but went all out to grab the digital properties.
So much so, Viacom18 will now pay Rs 83.24 crore (per match) for 98 matches and another Rs 50 crore (per match) for the remaining 312 matches, both across five seasons. It is a maddening number – the BCCI put a premium on exclusivity and this digital valuation has elevated an IPL match to the second-most valuable sports property after the NFL (USA) and ahead of the Premier League (UK).
The conclusion is an obvious one – digital is the way forward.
Can Viacom18 monetise its digital property in the face of linear competition from Disney? Perhaps yes, for digital is not only about content anymore. Consider Amazon – you don’t purchase a Prime account for its video or audio content; you buy it for marketplace distribution (read fast delivery).
Amazon may have surprisingly pulled out of the IPL rights’ race, but it leaves behind a blueprint for Viacom18 (and its digital platforms Jio TV/Voot or perhaps something new). When it comes to consumerism in India, from telecom to groceries, Reliance has a finger in every pie. This model – inspired by arch-rival Amazon – is where the monetisation will come from.
In simpler terms, maybe buy a refrigerator from Reliance Digital (retail), and win a free Voot account. Or better, order groceries from Jio Mart on Monday morning and watch that evening’s IPL match for free.
Who gains from the BCCI’s mega payday?
Indian cricket is the real winner, as the cliché goes. The ten IPL teams will get a larger share of the media rights’ pie, and it will push their purses and players’ salaries higher. While Indian cricketers will mint more money, foreign cricketers will be keen to ply their wares here, even at the cost of international cricket.
Indian domestic cricket will win too. There is no doubt that the domestic structure has gained from IPL over the past 15 years, both in infrastructure, finances and opportunities for players. Maybe there is the odd case of financial disbursement being delayed, but that makes for a cynical argument. Already, for example, the BCCI heeded popular demand and raised the pensions for former cricketers (both men and women) and umpires.
Perhaps, the BCCI will also shift focus to strengthening the women’s cricket structure, and it must put in place women’s IPL from 2023. Some part of this financial package should be attributed towards driving the women’s IPL for initial years, until it becomes a self-serving entity like the men’s IPL.
Can the fan win?
What of the average Indian cricket fan? Does he/she get something out of this?
Hopefully, and arguably, yes.
The state associations will all share in this financial windfall and they must improve the in-stadia facilities for the spectators. We are in 2022, going into 2023, and Indian cricket fans deserve better than to worry about lack of water and proper seating, and poor quality, expensive food, every time they decide to go watch their favourite stars in action. This is the hopeful part.
The arguably assertive bit is to do with the two broadcasters – Disney (Star) and Viacom18. Ignoring cricket broadcasts on Doordarshan, this is the first time an Indian cricket property will be simultaneously broadcast on two different platforms. Whether the in-stadia experience improves or not, this is a chance to improve the living room experience.
The IPL may be fetching top-dollar, but does it make for top-quality viewing on the television/digital platforms? No, and that is because the powers that be – whether BCCI or broadcasters – do not pay enough attention to content creation. The IPL 2022 is a pertinent example wherein Twitter was abuzz with complaints about the overall quality of the commentary barring a few exceptions, especially on the BCCI-produced world feed (English).
Two different broadcasters will make tremendous room for improvement and innovation to present high-quality products. Both Disney and Viacom18 will be vying for the same set of eyeballs, which in-turn will drive advertising revenue. This is an opportunity to better curate their content, vis-à-vis, differential pre and post match programming, vernacular languages, and other forms of creative content. Heck, it might even drive the BCCI production to improve its world feed.
From 2023, if you don’t like what you are watching (or hearing) on TV, you will be free to switch to digital, or vice-versa, which will reflect in the ratings. With the end of broadcast monopoly, these ratings will matter more than they ever have, for they will drive all monetisation. The days of pointless complaining on social media are gone, and going ahead, the broadcasters will have to pay attention, surely.
Across the next five years of IPL broadcast, the audience shall call the shots.