Bidding was aggressive for digital media rights with the per match price inching close to Rs 50 crore per match.
After a day of aggressive bidding, the price for the media rights of the Indian Premier League (IPL) for the next cycle of 2023-27 has reached Rs 43,050 crore (linear TV and digital). The digital rights, as expected, were highly coveted and the bids for digital rights have inched very close to the bids for linear TV rights. The auction will resume on June 13 at 11 am.
At the end of day one, the bid for category A (linear TV rights) concluded at Rs 23,370 crore (Rs 57 crore per match) and category B (digital rights) at Rs 19,680 crore (Rs 48 crore per match). The Board of Control for Cricket in India (BCCI) had set the reserve price for the media rights at Rs 32,890 crore (Rs 89 crore per match for a total of 370 matches). While BCCI had set the number of matches to be 74 per season in the tender document, the total number of matches is expected to hit 410 by 2027.
The bidding, which started on Sunday morning at 11 am, concluded at 6 pm and will continue on June 13. The winners are expected to be announced after the entire bidding process is completed.
“With the price of Rs 105 crore per match it seems like the bidding has entered a slightly irrational territory,” says N Santosh, managing partner, D and P Advisory. He expects the final figure to not significantly exceed Rs 115-120 crore per match for television and digital media rights.
The frenzy around securing the rights to this cricketing league could prove Santosh’s estimates wrong. He says that he may be proved wrong by bidders who may choose growth over profitability. An Elara Capital study had pegged the magic figure at Rs 135 crore per match for all four categories.
IPL, which reaches about 400 million households on linear TV and about 300 million people (as per Disney+ Hotstar) has evolved into an annual media extravaganza over the last 15 years. Disney+ Hotstar has become India’s leading SVoD platform thanks to IPL.
In the rapidly growing video streaming market, owning exclusive rights to a highly entertaining media property like the IPL is being seen as the golden ticket to success. Karan Taurani, senior vice president, Elara Capital, predicts that the digital rights revenue may surge six times compared to the previous cycle.
According to Taurani, on a per match cost basis, “the digital segment will at best come at par with television and not move beyond TV.” In 2017, the highest bidder in the digital rights category – Facebook - bid a whopping Rs 3,900 crore as per 2017 standards. The highest bidder for TV rights – Sony Pictures Networks India – bid Rs 11,050 crore. Star India (now Disney Star) topped it up with a consolidated bid of Rs 16,347.50 crore.
The rest of the world and 18 matches non-exclusive bundles could fetch a premium of 30-45% as per industry experts. Taurani expects the total value of rights to breach Rs 50,000 crore on day two of the auction.
The IPL media rights have been split into four categories - TV rights for the Indian subcontinent (category A), digital rights for the Indian subcontinent (category B), special matches (category C), and Rest of the World (RoW) rights (category D).
The key bidders are Viacom18, Disney Star, Sony Pictures Networks India, Zee Entertainment Enterprises Limited (ZEEL). Amazon got out of the race after it did not participate in the technical bid valuation on June 10.
Speaking about Amazon’s decision to sit this one out despite investing in cricket rights earlier, Santosh says, “Amazon must have decided not to take part in this bid because there could be some who may be irrational with their bidding and have a win it at all costs attitude.”