Coronavirus impact: IPL and Star India’s fate hangs by a thread

Between Star Sports, BCCI and the 8 franchises, the tournament stands to lose Rs 3,500 crore – Rs 4,000 crore

Star Sports – the official broadcaster for the Indian Premier League (IPL), the Board of Control for Cricket in India (BCCI) and the eight franchises of the T20 tourney together is believed to may lose anywhere between Rs 3,500 crore – Rs 4,000 crore as advertising revenue, if the IPL is cancelled due to the rise in number of cases of coronavirus in India. “We are getting ready to give our viewers a spectacular Vivo IPL experience on Star Sports and Hotstar once again.” said a Star Sports spokesperson.

IPL is slated to begin from March 29 with the first match being played between Mumbai Indians (MI) and Chennai Super Kings (CSK) at the Wankhede Stadium, Mumbai. The final match of the T20 tournament will be played on May 24, 2020.

“Even if the T20 tourney is postponed by 15 days, the three key stakeholders will incur a notional loss of Rs 500 crore, as venues, hotel and travels have been booked apart from other logistic arrangements,” said a senior media planner on the condition of anonymity. Star India is expected to rake in a total of Rs 3,000 crore as advertising revenue from this year’s IPL, as per industry estimates. Of this, its video streaming platform Hotstar is expected to earn Rs 600 crore from advertising. As per sources, presenting sponsorship deals have been closed in the range of Rs 75 crore – Rs 80 crore. The deal includes free commercial time (FCT) of 240 seconds to 180 seconds across channels including HD, SD and regional besides Hotstar. Moreover, associate sponsors have paid anywhere between Rs 65 crore – Rs 70 crore. This includes access to 120 seconds of FCT across channels including HD, and some SD regional channels. Other associate sponsors are understood to have paid in the range of Rs 45 crore – Rs 49 crore. While these sponsors will have access to 90-100 seconds of FCT, the deal, however, does not give access to any integration across channels. “It is a very precarious situation but there is no other option other than to wait and watch,” Sujata Dwibedy, group trading director, Amplifi, Dentsu Aegis Network India. According to industry estimates, every season a broadcaster is estimated to have an advertising inventory of about 2,500 seconds per IPL match.

The eight franchises in total are expected to make anywhere between Rs 450 crore – Rs 500 crore from sponsorship revenue, this year, thereby recording a 20% – 25% increase, as per industry estimates. According to Mohit Burman, co-0wner Kings XI Punjab and vice-chairman, only time will tell. “There is a scare for sure. Whatever the BCCI decides, we will follow the mandate. Nonetheless, we hope that the tourney is played,” he said.

Industry analysts believe that only 15%-20% that is about Rs 450 crore – Rs 600 crore may be invested in other mediums including other TV channels. “Hindi general entertainment channels (GECs) are expected to benefit the most, followed by regional GECs and movie theatres,” Lloyd Mathias, angel investor, marketing and business strategists, said.

The other way to manage the situation would be to follow the example of international leagues such as LaLiga. The matches are being played in empty stadiums due to the outbreak of coronavirus in Italy. As per a senior official, IPL can be turned into a complete TV property being played in empty stadiums. “This would ensure that advertisers continue to spend on the property,” the official added. Meanwhile, according to several media reports, BCCI president, Sourav Ganguly, said that the IPL will be held as per the schedule. So far, 31 cases of coronavirus (COVID-19) have been detected in India.

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