IPL – THE Rs 48,000 CRORE JUGGERNAUT
14th June 2022 will go down in the annals of Indian cricket history as a landmark day when the Indian Premier League (IPL) announced its arrival on the global stage in style. The Board of Cricket for Control in India (BCCI) has sold the media rights to the IPL for a staggering sum of Rs 48,390 crore for the 2023-27 cycle which is not just a record in international cricket but also in the global sports industry. While it has fallen short of the magic figure of Rs 50,000 crore, the media rights value has seen a near 200% growth over the previous five-year rights cycle. Digital overtakes TV Jay Shah Since its inception, the IPL has been synonymous with growth & today is a red-letter day for Indian Cricket, with Brand IPL touching a new high with e-auction resulting in INR 48,390 cr value. IPL is now the 2nd most valued sporting league in the world in terms of per match value! We are pleased to extend our association with the Indian Premier League and look forward to offering the next five seasons across our portfolio of television channels. We made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights given the price required to secure that package. IPL is an important component of our portfolio of television channels in India, providing an incredible opportunity for us to showcase The Walt Disney Company’s powerful global brands and iconic storytelling, as well as Disney Star’s impressive collection of local original content, to millions of viewers in India. I want to begin by congratulating and thanking BCCI for an extremely well-managed and transparent bidding process. Next, I want to congratulate the winners of the four IPL media rights packages. The IPL began with SPN and has since developed into one of the world’s most popular sporting leagues in its 15-year history. We’ve seen the league grow and would have liked to see it on the Sony Network again. In this regard, we made a reasonable bid, considering all the expected returns. We had to factor in the market’s anticipated expansion and potential economic and other concerns over the next five years. Fiscal prudence, in my opinion, is critical for strategic management.” Way forward for Disney Star ZEE would like to congratulate the Board of Control for Cricket in India (BCCI) for running an extremely efficient and transparent e-auction process. We are grateful to the BCCI, President, Mr. Sourav Ganguly, Hon’ble Secretary, Mr. Jay Shah and Hon’ble Treasurer, Mr. Arun Dhumal; for their able leadership and unwavering support in enabling ZEE’s participation in the IPL Media Rights tender process. At ZEE, we evaluate all business decisions through the prism of value creation for all our stakeholders and we will continue to evaluate every sports property with the same prism.” Split in media rights to impact monetisation? Way forward for Sony-Zee
Shortly after the e-auction concluded on 14th June, BCCI Secretary Jay Shah declared that the IPL is now the second most valued property in the world. “Since its inception, the IPL has been synonymous with growth & today is a red-letter day for Indian Cricket, with Brand IPL touching a new high with e-auction resulting in INR 48,390 crore value. IPL is now the 2nd most valued sporting league in the world in terms of per match value!” Shah, who is the son of Union Home Minister Amit Shah, exulted.
Launched in 2008, the IPL’s growth has been rapid. For a property that is into its 15th year, the jump in the media rights value of IPL has been nothing short of a dream run. In its first 10 years, Sony Pictures Networks India (SPNI) held the TV rights of IPL by paying a hefty sum of Rs 8200 crore. In February 2015, Star India surprised everyone by picking up the digital rights of IPL for Rs 302 crore for a three-year period.
Then came the landmark year of 2017 when the IPL media rights were put up for bidding. In a way, the seeds of IPL’s future success were sown in September 2017 when Star India broke the bank to pay Rs 16,347.5 crore for the five-year media rights. Facebook’s ambitious bid of Rs 3900 crore for digital rights was the first sign of IPL’s potential value in the digital medium.
Cut to 2022, the IPL’s digital rights value has surpassed the TV rights value by a small margin. Incumbent rights holder Disney Star India has retained the TV rights for the Indian sub-continent for a sum of Rs 23,575 crore even as it lost the digital rights for the Indian sub-continent to Viacom18, which has paid Rs 23,758 crore for controlling the exclusive and non-exclusive digital rights.
Besides digital rights, Viacom18 has also got media rights for Australia, South Africa, and the UK. Bennett Coleman & Company Limited (BCCL) owned Times Internet has snatched the Middle East & North Africa, and the US rights.
IPL has surpassed many global sporting leagues not just on the overall value but also in terms of the per match value that the rights owners will pay to the BCCI in the next five years. The average per match value of IPL media rights is Rs 118.02 crore. Disney Star is paying a whopping Rs 57.5 crore per match for TV rights while Viacom18 which has secured both Package B and C rights will be paying a cumulative sum of Rs 83.24 crore.
Media Partners Asia (MPA) Vice President Mihir Shah noted that digital surpassing TV signifies the potential of streaming in India. “The fact that digital rights value is higher than television showcases the scale and future potential of streaming in India,” Shah said.
According to sources, the TV rights had seen a three-way fight between Disney Star India, Sony Pictures Networks India (SPNI), and Viacom18. The digital rights saw a four-way fight with Zee Entertainment Enterprises Limited (ZEEL) also bidding strongly along with Disney Star, Sony, and Viacom18.‘IPL 2nd most valued sporting league in the world’
BCCI Secretary
I am thrilled to announce that STAR INDIA wins India TV rights with their bid of Rs 23,575 crores. The bid is a direct testimony to the BCCI’s organizational capabilities despite two pandemic years.
Viacom18 bags digital rights with its winning bid of Rs 23,758 cr. India has seen a digital revolution & the sector has endless potential. The digital landscape has changed the way cricket is watched. It has been a big factor in the growth of the game & the Digital India vision.
I congratulate Viacome18 for winning Aus, SA, UK, Times have got MENA & US, who win the Rest of the World Rights. The IPL is as popular outside India as it is here and the viewers will be able to enjoy top-class cricket.
I thank all the bidders for their active interest in securing the IPL Media Rights. As a key stakeholder, the BCCI will do everything possible to help you realise the full value of your investments.
The BCCI will utilize the revenue generated from IPL to strengthen our domestic cricket structure starting from grassroots, to boost infrastructure and spruce up facilities across India and enrich the overall cricket-watching experience.
Now, it’s time for our state associations, IPL Franchises to work together with the IPL to enhance the fan experience and ensure that our biggest stakeholder – ‘the cricket fan’ is well looked after and enjoys high quality cricket in world-class facilities.
Such is the importance of digital rights that Disney Star, which had won Package A, had decided to challenge Viacom18, the Package B winner, for another round of bidding. The IPL e-auction norms permitted the Package A winner to better the bid price of the Package B winner. Despite the re-bidding, Viacom18 held onto the rights at a hefty price tag of Rs 50 crore per match compared to a base price of Rs 33 crore per match. Disney and Viacom18 were once again locked in a bidding frenzy for Package C or the Special Rights Package which includes 18 to 22 matches (depending on the format) including the opening match, playoff, and double-header games which are scheduled to start between 7 pm and 9 pm.
The bidding war ended with Viacom18 coming up trumps against Disney Star which was desperate to get at least a slice of the digital rights pie even if it was non-exclusive. Disney Star’s desperation to get digital rights is understandable as Disney+ Hotstar, which has 50 million+ paid subscribers, owes its success to IPL. The launch of Reliance Jio in 2017 and the subsequent crash in data prices coupled with live cricket had propelled Disney+ Hotstar to the numero uno position in the digital video space.
Disney, which had acquired Star India as part of its $71.3 billion acquisition of 21st Century Fox assets, had a lot riding on the IPL digital rights particularly since Disney+ Hotstar contributed almost 36% of Disney+’s overall subscriber base. In Q2 FY22, Walt Disney had reported 138 million subscribers for Disney+ with Disney+ Hotstar comprising 50.1 million of the total base. Although there is a huge difference between the average revenue per user (APRU) of the two services. Disney+ Hotstar’s ARPU was a measly $0.76 while Disney+’s ARPU stood at $4.35. Disney+ Hotstar and cricket are key to Disney+ achieving its target of 230-260 million subscribers by 2024.
In a statement issued after the conclusion of the media rights, The Walt Disney Company Chairman, International Content and Operations Rebecca Campbell said Disney Star “chose not to proceed with the digital rights given the price required to secure that package”.
“We made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights given the price required to secure that package. IPL is an important component of our portfolio of television channels in India, providing an incredible opportunity for us to showcase The Walt Disney Company’s powerful global brands and iconic storytelling, as well as Disney Star’s impressive collection of local original content, to millions of viewers in India,” she stated.
The next big challenge for Disney Star will be to retain the International Cricket Council (ICC) and Board of Control for Cricket in India (BCCI) media rights in the face of an aggressive Sony-Zee merged entity and a combative Viacom18, which ventured into sports recently. Sony-Zee, which couldn’t win either the TV or the digital rights, will be gunning for both the ICC and the BCCI rights.
“We will be exploring other multiplatform cricket rights, including future rights for ICC and BCCI, which we currently hold through the 2023 and 2024 seasons, respectively. Additionally, we hold Pro Kabaddi League rights, Indian Super League football rights, as well as various international sports rights, including the Wimbledon Championships and the English Premier League,” Campbell added.‘Chose not to proceed with the digital rights given the price required’
Rebecca Campbell
Chairman, International Content and Operations, The Walt Disney Company
We will be exploring other multiplatform cricket rights, including future rights for International Cricket Council (ICC) and Board of Control for Cricket in India (BCCI), which we currently hold through the 2023 and 2024 seasons, respectively. Additionally, we hold Pro Kabaddi League rights, Indian Super League football rights, as well as various international sports rights, including the Wimbledon Championships and the English Premier League.
At the same time, we are focused on growing our robust slate of original entertainment content for Disney+ Hotstar and our television channels in the region. Our vast portfolio of more than 70 television channels in India cuts across general entertainment, films, sports, infotainment, kids, and lifestyle content, reaching 90% of pay cable and satellite TV homes in the region.
Disney+ Hotstar has changed the way Indians watch their entertainment - from favorite locally produced original TV shows, to global blockbuster films, and popular sporting events. Last year, Disney+ Hotstar was home to seven of the Top Ten Hindi SVOD entertainment series in India, and we currently have more than 100 local original titles in our content pipeline -- with over 80 local originals slated to premiere this fiscal year.
Viacom18 gains at Disney Star’s expense
Disney+ Hotstar’s pain will be Voot and Jio Cinema’s gain. Viacom18’s video streaming service Voot/Voot Select has got the perfect opportunity to scale up its operations. IPL will be a perfect product to catapult the platform to the top end of the OTT funnel. As per a recent deal between Reliance Industries and Uday Shankar and James Murdoch’s Lupa Systems, Viacom18 will get a fund infusion of Rs 15,145 crore from the two companies besides the JioCinema app becoming part of the TV broadcasting network.‘Fiscal prudence, in my opinion, is critical for strategic management.’
NP Singh
MD & CEO, Sony Pictures Networks India
“Sony Sports Network will broadcast over 1800 hours of cricket this year. In addition to the marquee India tour of England, the team plays three T20Is and three ODIs in the country. This will happen between India’s games in Ireland and India’s games in Zimbabwe. In addition to this action-packed calendar of Indian men’s cricket, we have the women’s team touring England and an enviable bilateral men’s cricket calendar featuring England vs New Zealand, Australia vs South Africa, Sri Lanka vs Australia, England vs South Africa, Australia vs England, and more, as well as popular T20i tournaments like the Big Bash League, Pakistan Super League, Women’s Big Bash League and more.”
Elara Capital SVP Karan Taurani believes that the shift of IPL digital rights to Viacom18 from Disney Star will alter the over-the-top (OTT) video streaming landscape. “With IPL moving away from Star, Disney+ Hotstar as a platform will become much smaller, a tad above vs. other broadcaster OTT apps helped by other cricket content.”
According to Omdia, Disney+ Hotstar had a 50% share of the Indian SVOD market of 73 million subscribers. Disney+ Hotstar was also the largest AVOD platform in India with ad revenue worth Rs 830 crore in FY21. Its subscription revenue in FY21 stood at Rs 831 crore.
He also said that the SVOD subscribers and AVOD users might shift to Voot or Jio Platforms. “We believe Voot or Jio Platforms, will get an instant benefit in terms of the number of users/subs due to IPL, however monetisation on digital won’t be easy as user experience is a key monitorable for customer retention and ARPU’s; Voot or Jio Platform will have a huge edge in terms of distribution and this May propel ARPU growth for Jio, as it may be sold as a bundled deal,” he said.
MPA’s Shah also believes that Viacom18 will leverage Reliance Jio’s strength in the telecom market to monetise the digital rights. “The new streaming platform from Reliance-controlled Viacom18 will leverage from gaining Day 1 access to Jio’s 400 million broadband customers. Moreover, the rights value could be justified as the venture aims to address a much larger revenue pool of video, data, and e-commerce.”
Having lost the IPL digital rights, Disney Star’s first priority will be to renew ICC and BCCI media rights and try to stem the likely subscriber loss that will happen due to IPL. The platform is doubling down on entertainment content to protect its subscriber/user base.
“We are focused on growing our robust slate of original entertainment content for Disney+ Hotstar and our television channels in the region. Our vast portfolio of more than 70 television channels in India cuts across general entertainment, films, sports, infotainment, kids, and lifestyle content, reaching 90% of pay cable and satellite TV homes in the region,” said Campbell, while speaking about the way forward.‘We evaluate all business decisions through the prism of value creation’
Rahul Johri
President, Business - ZEE Entertainment Enterprises Ltd
She also noted that Disney+ Hotstar has changed the way Indians watch their entertainment - from favorite locally produced original TV shows to global blockbuster films, and popular sporting events. “We currently have more than 100 local original titles in our content pipeline -- with over 80 local originals slated to premiere this fiscal year.”
MPA’s Shah said Disney will have to capitalise on TV ad growth of 8-10% p.a. though growth in affiliate fees may be challenged due to rate regulation and growing adoption of CTV.
While these are early days to make a prediction on how Disney Star and Viacom18 will go about monetizing their respective rights but media experts believe that the split in media rights between two separate players doesn’t augur well for either of the players. While TV is an established medium with a stable monetisation model, digital is a fast-growing medium where content consumption and revenues are growing rapidly.
“It will be a challenge for both Disney and Viacom18 to monetise the rights considering the price they have paid for the rights. TV is a mass medium with established revenue streams of subscription and advertising. Even for IPL as a property, a bulk of monetisation happened on TV. On the other hand, digital is the medium of the future and is growing at a breakneck speed in India. So both have their advantages and challenges,” a veteran sports media professional said on condition of anonymity.
Over the years, the gap between those watching IPL on TV versus those who consume it on digital has been reducing. In 2021, IPL on Star Sports was watched by 400 million viewers compared to 260 million users who streamed it on Disney+ Hotstar. Adding to the woes of the TV industry, the pay-TV universe in the country is shrinking particularly in urban pockets where OTT has become the platform of choice for consuming content.
The launch of Google and Reliance Jio co-developed Jio Phone Next is expected to bring the next 300 million users to the internet. The number of smartphone users in India was pegged at 85 crores in 2021.
Experts note that properties like IPL which cut across gender, language, and the socio-economic barrier will come in handy for Reliance Jio to bring new users to the platform and prevent subscriber churn.
Having lost out on IPL, SPNI, and ZEEL, which are expected to get merged soon once the regulatory approvals are in place, will go the whole hog for ICC and BCCI rights. While SPNI already has a strong presence in sports, ZEEL has also identified sports as a major focus area.
Bagging the IPL TV or digital rights would have helped Sony-Zee become the most powerful media network in the country. However, the combined entity will still be strong in both TV and digital markets event without the IPL. Sony-Zee combined will have 75 channels and over 25% viewership share. Even on OTT, SonyLIV and ZEE5 will have a strong share in the SVOD and the AVOD markets.
Speaking about the loss of IPL rights, SPNI MD & CEO NP Singh said that the company had made a reasonable bid, considering all the expected returns. “We had to factor in the market’s anticipated expansion and potential economic and other concerns over the next five years. Fiscal prudence, in my opinion, is critical for strategic management.”
He also stated that Sony Sports Network will broadcast over 1800 hours of cricket this year.
ZEEL on its part said that the value creation for shareholders has been a key focus area for the company even while evaluating sports rights.
“ZEE would like to congratulate the Board of Control for Cricket in India (BCCI) for running an extremely efficient and transparent e-auction process. At ZEE, we evaluate all business decisions through the prism of value creation for all our stakeholders and we will continue to evaluate every sports property with the same prism,” ZEEL President Business Rahul Johri said.
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