The ball is now in Star's court, caution experts.
The Board for Control of Cricket in India (BCCI) announced the winner for IPL's media rights yesterday after opening and evaluating all the submitted bids. For a whopping Rs 16,347.50 crore, Star India won the global rights for a period of five years i.e. 2018-2022. The rights include television broadcast and streaming rights in the Indian subcontinent and ROW (Rest-of-the-World - Australia, New Zealand, Middle East, South Africa, United Kingdom, and United States of America)
BCCI issued an ITT (Invitation to Tender) for IPL media rights for a period of five years (2018-2022). There are eight categories that potential media partners can bid for: Global Rights, Indian subcontinent television and Indian subcontinent digital rights, ROW-A (Australia and New Zealand), ROW-B (Middle East), ROW-C (South Africa), ROW-D (UK), and ROW-E (USA).
24 companies picked up the tender documents; 14 submitted their bids on September 4th, 2017 in the media rights auction event organised by BCCI. These 14 companies included:- beIN sports, Super Sport, Follow On, YuppTV, Times Internet, OSN Gulf DTH, Facebook, Airtel, Star India, Bam Tech, Sony Pictures Networks India, Econet, Perform, and Reliance Jio.
Each company submitted technical and financial bids; the technical bids were evaluated first and each company was required to meet specific criteria to qualify for the financial bid evaluation. Bam Tech's technical bid failed to qualify as all of the required documents were not submitted. The remaining companies qualified and their financial bids were considered and evaluated.
Star India was the only company to bid for Global rights with a bid of Rs 16,347.50 crore. In order to gain the rights, Star India's bid had to be more than the sum total of highest bids in each category. Sony Pictures Networks India was the highest bidder in the Indian subcontinent television category with a bid amount of Rs 11,050 crore. Facebook's Rs 3,900 crore bid was the highest in the Indian subcontinent digital category; Follow On's Rs 70.01 crore led the ROW-A category; beIN sports' Rs 390 crore bid topped the ROW-B category; Super Sports' Rs 120.25 crore led ROW-C; Star India's Rs 48.75 topped ROW-D; and Perform's Rs 240.50 crore was the highest in ROW-E. The sum total of all these bids, across all categories, amounted to Rs 15,819.51 crore which puts Star India's final bid at Rs 527.99 crore ahead of the rest.
Uday Shankar, Chairman & CEO, Star India:
We are honoured to be selected as IPL's Global Media Rights Partner and we thank BCCI for conducting such a transparent process. The VIVO Indian Premier League is undoubtedly one of the most exciting sporting leagues in the world and the acquisition of the media rights reaffirms our commitment to serve cricket fans and make the game even bigger than it is. We are delighted that in Star, IPL has found its natural home. We look forward to bringing this exciting format to our audiences across the world in the quality that all our viewers are accustomed to, both on television as well as on digital via Hotstar.
What was paid in 2008 was the story of 2008; India, cricket and IPL, all three have changed dramatically over the last decade. If we had paid a little less we would not have obtained the rights and that tells us if the price was justified.
Rahul Johri, CEO, BCCI:
We are grateful to the Supreme Court, the Committee of Administrators and the office bearers of BCCI. We are also thankful to Deloitte and our Legal partners, Cyril Amarchand Mangaldas, for their support in carrying out an efficient, fair and transparent bidding process. We would like to welcome Star India on board as our IPL Global Media and Digital partner. We believe this is a global benchmark and all stakeholders of IPL will significantly benefit from this association with Star India.
Ashish Bhasin, Chairman and CEO, Dentsu Aegis Network (DAN), South Asia:
Cricket as a sport, is of very high interest in India and within that, IPL is one of the biggest properties. Star has made a big play in cricket; Hotstar had the digital rights they acquired for BCCI and ICC cricket and now they have forayed into IPL which gives them a very strong position in the sport. Viewership of cricket in India is only going to grow and IPL is one of the few segments in sports where you get female and family viewership. Despite so many other leagues being launched in India, close to 85 per cent and more of total sports ad-spends in India goes to cricket; so it does put Star in a very good position.
I don't think the amount can be recovered only through advertising revenue, however, keep in mind that properties like these come with several other benefits. Star, for example, has a bouquet of channels and this acquisition can help pull up those channels; at the same time a lot of subscription revenues should come in as well. Advertising rates will grow a little bit, but not substantially enough to recover the entire amount. Star is a very smart company and I am sure they must have done their mathematics.
Vinit Karnik, Business Head - Entertainment, Sports & Live Events at GroupM:
This is a brilliant win for Star India. Star India is a global network and they have proved it with the way they placed their bids. Their focus throughout the process was on global rights and they got it. Having these rights will not only help Star from a broadcast point of view but will also be a huge advantage for them from a marketing perspective.
For the last three years, Hotstar had a five minutes delayed feed but going forward, it's up to them. if they want they can simulcast. From an advertising point of view they can package their offering; we all agree that digital is a great space hence Star can roll out a series of creative packages to monetise better. It's too early to comment, but it's totally up to them; if they wish to push subscription revenues they can, they can package and sell it in different options to up advertising revenue.
Another important aspect, from a content point of view, is that now that they have all the rights, they can create non-live content around IPL and that is a big space to be in, opening new doors.
A statement from Sony Pictures Networks India:
A statement from Sony Pictures Networks India, the network that nurtured the IPL since its inception and within a span of 10 years established it as one of the most popular sporting properties out there, reads: "... We would like to thank all those who supported us in curating the lineage and legacy of IPL. At the same time, we take this opportunity to wish Star India the best as they shape IPL over the next five years. With our recent acquisition of the Ten Sports Network, the sports arm of Sony Pictures Networks India holds the broadcast rights to five Cricket Boards, guaranteeing that our channels will continue to offer a strong mix of programming for cricket fans."