IPL media rights auction: The numbers that matter

Winning the bid for Indian Premier League’s media rights is likely to give rise to a loss-leader. With the base price set to double that of what Disney Star bid in 2017, the Board of Control for Cricket in India (BCCI) has set the stage for an intense battle among television broadcasters and video streaming platforms. Media analysts are expecting the highest bidder to suffer the winner’s curse.

According to media analysts the final magic number at which the media rights will be sold will lie somewhere around Rs 50,000 crore to Rs 60,000 crore. For the cycle that just ended, Star Sports paid Rs 54.5 crore per match to BCCI; this could go as high as Rs 135 crore per match as per an analysis by Elara Capital.

For now, BCCI has set the number of matches to be 74 per season. However, after two years the number of matches is expected to be 84 per season and with the addition of more teams it will touch 94 matches per season by 2026 — taking the total number of matchtes to 410.

The higher the magic winning number goes, the harder it will become for the winning bidder to recoup the costs. “No one really knows if Star Sports made profits the end of five years with its Rs 16,347 crore bid,” says a senior media analyst who does not wish to be named. With a premium set on IPL, it will be unlikely that the winning bidder will see profits until the fourth year of the five year cycle.

IPL catapulted Disney+ Hotstar into a leadership position with about 40 million paying subscribers (in India as per Omdia). The platform aimed to bag about Rs 700 crore in ad revenue from IPL in 2022. During the same edition, Disney Star is said to have targeted a total advertising revenue of Rs 4,000 crore. The broadcaster will wish to retain these rights to maintain its edge in video streaming. According to sources, Rebecca Campbell chairman, international content and operations, Disney, is in India ahead of the auction.

Among all the categories, it is the rights for online streaming that will be hotly contested by all interested parties. Both, Category B and Category C rights will be coveted by Amazon in particular.

The Viacom-JV backed by Jio Platforms has its eyes on IPL to consolidate its telecom, media and e-tail ventures. Amazon would like to own IPL media rights to expand its e-commerce presence in India. Amazon Prime Video currently has the rights to stream all cricket matches played in New Zealand in India.

For the last five years Sony has lost its edge in the television space. It is worth remembering that Sony did not want to let go of IPL in 2017 and was the highest bidder for TV-only rights at Rs 11,050 crore. In the meantime, SonyLiv has emerged as a destination for a wide sprecturm of cricket and non-cricket sports events.

Zee which is in the midst of a merger with Sony will seek to demonstrate a solid partnership. MD and CEO Puneet Goenka has made it clear that Zee is in a position to bid for the media rights on its own.