ADVERTISEMENT

IPL Media Rights: Viacom18, Disney Star Bag Laurels, But The Real Winner Is...

The winners and losers of IPL media rights.

<div class="paragraphs"><p>The IPL final: (Source: BCCI/IPL)</p></div>
The IPL final: (Source: BCCI/IPL)

Viacom18 Media Pvt. wrested the streaming rights for the Indian Premier League from Disney Star, which retained TV broadcast rights for one of the most popular sporting events in the world.

Viacom18, part of Mukesh Ambani-controlled Network18 Group and backed by James Murdoch and media veteran Uday Shankar, bid Rs 23,758 crore for the digital rights, Jay Shah, honorary secretary at the Board of Control for Cricket in India, tweeted. Disney Star won TV rights for the Indian subcontinent for Rs 23,575 crore.

Times Internet bagged rest of the the world rights for the Middle East North Africa and the United States, while Viacom18 won Australia, South Africa, and United Kingdom.

The real winner, however, is the BCCI. The auction fetched it Rs 48,390 crore for the next five years. That's nearly three times what the cricket board earned from Star in the previous five years. Shah said IPL is now the world's second most valued sporting league by value per match.

Here's what the auction means for each of the parties involved:

What It Means For Viacom18

The digital rights are a lucrative win for Viacom, marking its entry into IPL broadcasting. The group has two streaming platforms--Viacom's Voot and Reliance's JioTV.

It was Ambani’s Reliance Jio Infocomm Ltd. that triggered India’s cheap data revolution. And he will now gain from growing online audience for IPL.

"For Viacom, digital is a big opportunity. Especially for Jio with its 450 million mobile (45 crore) subscribers," Sandeep Goyal, managing director at advertising agency Rediffusion, told BQ Prime. "Jio can fundamentally redefine the data and mobile market and sharpen its content strategy. Cricket is a big lubricant for that."

Voot will benefit too, he said. But it’s current subscriber base will need a big fillip. "Cricket can help but Voot will need an aggressive acquisition strategy."

According to a June 3 Elara Capital report, IPL digital viewership is expected to rise at an annualised rate of 14% in 10 years through March 2028. For TV, it forecast a CAGR of 1%.

A large-ticket property such as IPL is very important for any broadcaster so as to drive its digital strategy, the report said. “…We continue to believe that IPL leads to a big surge in various metrics such as monthly active users (MAU)/daily active users (DAU) for any OTT platform.”

What It Means For Disney+

While Disney Star won the TV broadcast rights, the loss of streaming rights is a setback. That's because Hotstar, driven by India’s cricket viewership, accounts for more than a third (over 36%) of Disney+'s 138 million paid subscribers, according to the latest subscriber data disclosed by the company.

A third of Star’s revenue is IPL-led (TV+digital), which reaffirms the cricket league's importance, Elara Capital had said in a June 3 report. This would have risen to 40% on the back of digital growth had it won the bid, it said.

"With these bids, monopoly of one media player in IPL ends," Abneesh Roy, executive vice president and consumer and media analyst at Edelweiss Financial Services, said in a note shared with BQ Prime. "[But] Hotstar would need to go back to planning with a higher focus on non-Sports."

Agreed Goyal. "For Hotstar, it is a big loss. Difficult to fill as the OTT was entirely dependent on cricket. Rebuilding Hotstar will be a significant challenge."

TV rights, however, cushions some of that loss.

"For Star, the broadcast rights have come surprisingly cheap. I think they are the big winners of this auction," Goyal said. "Far more number of matches, and a not so debilitating payout. Star will, I think now try to retain its other cricket rights to keep its monopoly alive in the next few years."

TV spending momentum revived in 2021 when brands started to increase their advertising expenses, according the Elara Capital report. Cricket was the frontrunner with its share in total sports sponsorship spends increasing to 77% from 60% pre-Covid in 2019 and 64% in 2020.

Roy, however, cautious. With the government banning surrogate advertising and ads from betting companies, it will become that much more difficult to make any money in the media rights, at least in initial years, he said.

Zee-Sony Combine

Zee Entertainment Enterprises and Sony Pictures India Pvt., which have agreed to merge, failed to either win television or digital rights. They are still in the race for Package C, which offers rights for a select number of games, and Package D that offers overseas rights.

It's a sigh of relief that till now neither Zee nor Sony have won, Roy said. "Zee and Sony should continue existing low-cost sustainable strategy," Roy said in a note shared with BQ Prime. "Zee has got rights of UAE T20 which is much cheaper. Plus they should continue to focus on Non-cricket such as Olympics, tennis, etc."

The Real Winner(s)

The only entities who makes money are the Board of Control for Cricket in India and teams as they get a share in BCCI's IPL revenue, according to Roy. The auction made the BCCI richer by Rs 48,390 crore.

(Updates an earlier version with the final numbers announced by the BCCI)