1. Star India beats Facebook, others, wins IPL media rights with Rs 16,347 cr bid

Star India beats Facebook, others, wins IPL media rights with Rs 16,347 cr bid

By coughing up a huge Rs 16,347.5 crore, Star India has claimed the media rights of the Indian Premier League (IPL) for all markets across media and digital platforms for the next five years, from 2018-2022.

By: | New Delhi | Updated: September 5, 2017 3:33 PM
Star India, Facebook, IPL Industry experts had expected the rights to fetch anywhere from Rs 12,000-14,000 crore, but it seems that Star India’s aggressive bid surpassed all expectations. (PTI)

By coughing up a huge Rs 16,347.5 crore, Star India has claimed the media rights of the Indian Premier League (IPL) for all markets across media and digital platforms for the next five years, from 2018-2022. The bid by Star India turned out to be Rs 528 crore more than the sum of all the highest individual bids for the seven categories of rights being sold — Rs 15,819.51 crore.

Star India chairman and CEO Uday Shankar said, “The Vivo Indian Premier League is undoubtedly one of the most exciting sporting leagues in the world and this acquisition of media rights reaffirms our commitment to serve cricket fans and make cricket even bigger than it is. We are delighted that in Star, IPL has found its natural home.”

Star India edged out Sony Pictures Networks India (SPN), which held the IPL TV rights from inception for 10 years (until 2017), as well as other biggies like Reliance Jio, Facebook and Airtel. Star India’s Hotstar held the digital rights of the property over the last three years.

Vinit Karnik, business head at GroupM’s entertainment and sports division ESP Properties India, told FE, “The way Star has strategised for the rights, it has done a fantastic job as it allows the company to do multiple things at a time. Earlier, the rights were scattered. Whether it will translate into more revenues or not, is still too early to say, but the meter has started ticking.”

While SPN had the highest bid for the TV rights, at Rs 11,050 crore, the highest digital bid was from Facebook at Rs 3,900 crore. However, Star India had a much larger composite bid even though individually its bids were quite low. But as per the rules, the companies can form a consortium and if any company’s consolidated global bid happens to be greater than the sum total of every individual bid, it stands to win the rights.

“We believe that Indian sports have barely scratched the surface of its potential. Both the viewership of sports and participation in sports is something that we would like to grow substantially over the next few years,” Shankar added.

Industry experts had expected the rights to fetch anywhere from Rs 12,000-14,000 crore, but it seems that Star India’s aggressive bid surpassed all expectations. With the Indian sports broadcasting market becoming a duopoly between Sony and Star, competition was expected to be high.

But given that the rights period has been reduced from 10 years to five, will Star India be able to recover the cost? While industry experts say it is too early to calculate, this will not give Star India a monopoly.

“Before the 2018 IPL, Star India’s cricket rights for some other India-centric properties are set to expire. This could be up for grabs for anyone. So how can Star have a monopoly?” asked Karnik. He added that the value of the TV rights have gone up by almost three times what they were earlier.

It is pertinent to note that the rights were split into three sections — TV rights for the Indian subcontinent, digital rights and overseas media rights (television and digital). All three rights deals are for a five-year term. In the fray were 24 companies that picked up the invitation to tender (ITT) to bid for the broadcast and digital rights. However, only 14 of the 24 companies turned up with their final bids for the auction. Key names missing from the auction were Amazon, Yahoo, Twitter, Discovery, ESPN Digital Media and the UK-based network Sky.

The final list of contenders for the rights included Facebook, Reliance Jio, Bharti Airtel, YuppTV, Times Internet, Star India, SPN, beIN Sports, Gulf DTH OSN, BamTech, Supersport, Perform Media, Followon Interactive and Econet. However, BamTech was disqualified as a lot of fundamental documents were missing from its bid.

The Board of Control for Cricket in India (BCCI) had decided last September to sell the rights for the five-year window through an open-tender process. Initially, 18 companies were in contention with the bids scheduled to be opened on October 25 last year. However, intervention from the Supreme Court forced the BCCI to delay the process.

Earlier this year, the court-appointed Committee of Administrators (CoA) allowed the bidding to open once again on July 17. While the final bidding process was slated to take place on August 28, BCCI pushed the media rights auction date for IPL to September 4 in the wake of a case pending in the Supreme Court.

The SC had asked Vinod Rai, who heads BCCI’s court-appointed CoA, to report by August 28 whether electronic auctions could be held for the media rights.

Earlier in June 2017, Chinese mobile firm Vivo retained the IPL title sponsorship for the next five years with a mammoth bid of Rs 2,199 crore, an over 500% increase from its previous deal. It had held the rights for 2016 and 2017 editions of the tournament.

  1. No Comments.

Go to Top