IPL Media Rights: BCCI hits a six while Viacom18 and Star India scramble for the ball

The IPL media rights for 2023-27 was sold for Rs 48,390 by the BCCI with TV rights accounting for Rs 23,575 crore and digital fetching Rs 23,758 crore for 410 matches

IPL Media Rights, BCCI, Viacom18, Star India
Viacom18 and Times Internet together won the Package D for Rs 1,058 crore.

After a rigorous three-day bidding war, The Board of Control for Cricket in India (BCCI) has announced the winners of the Indian Premier League’s media rights for the period 2023-2027. At Rs 48,390, IPL is now the second most valued sporting event, right after United States’ National Football League (NFL) and has recorded a three-fold increase from what The Walt Disney-Star  had paid at Rs 16,347 crore in 2017. For the first time, the media rights have been spread across broadcasters, breaking the monopoly of one company. For instance, television rights for the Indian subcontinent have been sold for Rs 23,575 crore to The Walt Disney Company India owned Star, while the digital rights have been bagged by Viacom18 for Rs 23,758 crore for 410 matches. This is the first time in India when digital rights have fetched more money than the television rights. “

Viacom18 and Times Internet together won the Package D for Rs 1,058 crore. While Viacom18 has Australia, New Zealand, Singapore, Caribbean, South Africa, Sub Saharan Africa, UK, Ireland and Continental Europe rights; Times Internet got Middle East and North Africa (MENA) as well as the United States region in their kitty.

BrandWagon Explained: IPL Media Rights Winners

The Game of Packages

It is to be noted that in this media rights cycle the bidding has been for 410 matches as opposed to 370 matches. This means that while currently there are 74 matches, there is a possibility that within this cycle (2023-27), BCCI may increase the number of games from 74 to 84 and then finally to 94. Sources state that the bidding has been done on a pro-rata basis on when/if the BCCI decided to increase the number of matches in a tourney.

Package A, which consisted of television rights, had a base price of Rs 49 crore per game. The price increased to Rs 57.5 crore per game by the end of the bidding war, clocking a 17.3% rise. From 2023, the Star India will pay Rs 4,255 crore for 74 matches tourney to the BCCI every year. The amount is subject to change in case the number of matches increases.  The Walt Disney-Star India will then have to shell out Rs 4,830 in the case of 84 matches and finally Rs 5,405 crores for 94 matches. As per industry estimates, The Walt Disney-Star India claims to have clocked anywhere between Rs 4,900-6,500 crores as revenue from the last IPL. 

As for Package B, which encapsulated digital rights for the Indian subcontinent region, Viacom18 has won the rights for Rs 20,500 crore for five years, this comes to about Rs 50 crore per game, marking 51.51% rise from its base price. Breaking this down for 74 matches Viacom18 will pay Rs 3,700 for 74 matches to the BCCI. This might increase to Rs 4,200 crore for 84 matches and lastly, Rs 4,700 crore to BCCI if the number of matches touches 94. 

Just to clarify, Viacom paid Rs 23,758 crore for both Package B and Package C (non-exclusive 18 matches rights). Which means that BCCI will get additional Rs 33.24 crore per game for Package C– which was a newly introduced non-exclusive 18 matches package. This brings Viacom’s total to Rs 4,298.32 crore for 74 matches. Interestingly, the total number of games in Package C is 98. This means that if/when BCCI increases the overall matches from 74 to 84, Package C’s number will also increase from 18-20. Similarly, for 94 matches, Package C will encapsulate 22 matches. With this in mind, Viacom will pay a total sum of Rs 4,864 crore for 84 matches, and Rs 5,364.8 crore for 94 matches. “The game has never been just about money, it is about talent. The IPL e-auction just showed how strong the game is in our country. The numbers should be the biggest motivation for all the young players to take their ability and Team India to the highest level,” Sourav Ganguly, president, BCCI, said in a press note.

This year, BCCI had further broken down Package D (international TV and digital rights) into four groups. Group A consisted of Australia, NZ, Singapore, Caribbean region; Group B had MENA and the US region; Group C was South Africa, Sub Saharan Africa region while Group D encapsulated UK, Ireland, Continental Europe region. Viacom18 managed to bag the majority of international rights by winning Group A. C and D for a total amount of Rs 594 crore for 410 matches. Times Internet won the bid for Group B for Rs 464 crore.

What Does this Mean for the Broadcasters?

As per media experts, despite bagging the rights at a higher cost, it is believed that The Walt Disney-Star India, will be able to break-even and make money as the tourney will attract new advertisers. To give perspective, a T20 match has about 2,200-2,400 seconds of ad slots available which translates into 49.3 hours of ad inventory for 74 matches per channel. However, with the increase in number of matches, there will be an increase in ad inventory as well. This means that The Walt Disney-Star India’s ad inventory will increase to 56 hours for 84 matches and further to 62.6 hours for 94 matches. Now add to this the 17 channels on which The Walt Disney Company India will telecast the matches. “Every year IPL establishes a fresh benchmark, next year as well, ad rates on television during the T20 tourney will see a rise. For advertisers, the question will be of recovery of cost by conversion into ROI. IPL has always managed to deliver to brands with the scale and helped the brand to build quick reach and awareness, upcoming years will be no different,” Ramsai Panchapakesan, SVP and national head – media buying, Zenith India, told BrandWagon Online.

As for digital, the challenge for Viacom18 is believed to be able to demonstrate value, industry experts claimed. IPL ad rates already run at a premium and the value of this bid means that Viacom18 may need to raise them even further. It is expected that advertisers might not be willing to spend at this level unless they are clearly convinced of effectiveness and value. “Performance advertising will definitely be the way forward, however, there is a limit to this shift of marketing dollars, and performance as a share of total adex is likely to flatten out. It will be crucial for Viacom18 to prove to their advertisers that they have highly-engaged audiences, with the right demographics, in order to attract the adex that they need to make back their money. It is crucial that they make good use of their first-party data,” Kavita Shenoy, founder and CEO, Voiro, highlighted. Voiro is an ad-tech and SaaS start-up that provides revenue analytics and workflow automation solutions to media and content-led companies.

But, the other way the company will be able to recover the money is through the telecom company – Jio. It is believed that IPL will help in gaining captive customers for Jio, as all its users will have viewing rights. Furthermore, subscription is another area for both Voot and Jio to make money.  As per industry estimates, most of the subscription revenue of Disney+Hotstar was on the back of IPL. Now this subscription is likely to move to Reliance owned two digital platforms- Voot and JioTV. Furthermore, television has a finite inventory while digital doesn’t. And on digital, impressions matter more than ad inventory slots. The more viewership the platform garners, the more money it will earn. Industry experts opined that currently 27-30% of IPL viewership comes from digital, thereby enabling the medium to unlock its potential growth in tier 2 and tier 3 as well as rural India– a key demography which advertisers are eyeing presently, while TV has reached maturity  in terms of inventory innovation as well as reach.

As per industry estimates ad rates will also be impacted. While, television may clock its usual 10-15% rise in ad rates, digital might soar to 60%, in the upcoming IPL in 2023. While Star to make profit on the IPL is a done-deal, Viacom18 might take some time and  probably will be able to break-even by the third year if they play the right cards and roll out their monetisation game properly, experts believed. “The smart thing Viacom18 did was to buy Package C so as to avoid any cannibalisation of viewership on the digital front in India. Now they can establish a benchmark in the market and command a price on the audience it will serve by rolling out cohort specific bundles,” Panchapakesan added.

Hence, while the BCCI has definitely scored a big win, whether the broadcasters will also hit a sixer, only time will tell.

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