Reliance is believed to be creating a strong sports content play to give the much-needed boost to its telecom operations
On September 11, Viacom18, the 51:49 joint venture between Mukesh Ambani-owned Network18 and ViacomCBS, bagged the media telecast rights for FIFA World Cup 2022 scheduled to be held in Qatar, for an estimated $60 million (Rs 450 crore). Interestingly, till 2010, the broadcast rights resided with Walt Disney Company India’s sports network Star Sports. To be sure, Viacom18 has been gradually accruing the telecast rights for a range of sports tourneys. Interestingly, a lot of these rights have been acquired by Reliance Industries-owned sports management firm RISE Worldwide (previously known as IMG Reliance). All these signal to the fact that Reliance Industries is getting serious about running sports as a business unit, besides the fact that the company is looking at building a solid content pipeline for Jio and establishing it in the subscription business.
“Reliance which runs its telecom business through Jio is working its way to create a super app and building up the content pipeline is just one part of the strategy. Add to that the e-commerce and the retail play that the company is setting up through Reliance Brands, Digital, Jewels, and Ajio among others. The other side of the strategy being a future-ready company. A case in point is Reliance BP Mobility Ltd’s (RBML) recent tie-up with Gurugram-based BluSmart to set up electric vehicle (EV) charging infrastructure,” said a person close to the development, on condition of anonymity.
As sports seems to occupy an important position in its scheme of things when it comes to building the content pipeline for its telecom venture Jio, the company journey didn’t start just this year through its broadcast business Viacom18. In fact, there are many pieces to this puzzle and Viacom18 is just one of them.
Emails sent to Reliance Industries Ltd, RISE WorldWide and Viacom18, remained unanswered till the time of publishing this story.
Laying the Foundation for Talent
While all kinds of sports are played in India, cricket still rules. So how does one create a steady supply chain of the talent pool? Starting from the Indian Premier League (IPL) team Mumbai Indians, to running a football academy under Reliance Foundation Youth Sports – the project is headed by Akash Ambani, who also leads Reliance Jio – it has created several programmes which now scout and provide talent to many clubs.
“The idea is to follow and model the sports journey based on how European football clubs operate. So not only through various programmes talents are identified, these are then provided with a career backed by different clubs whether its football or cricket,” said a close source. The academy has provided as many as eight talents including Jasprit Bumrah, to the Mumbai Indians (IPL) team. All these have been selected by Zaheer Khan, director of cricket operations, MI.
Similarly, through the programme Reliance Foundation Young Champs, which was started in 2015, select talents are provided with a complete scholarship, which thereby allows them to complete their studies at the fully residential academy, while they continue to pursue sports. The academy located at Navi Mumbai has its own stadium. Every year 1o students are provided with scholarships after they are scouted. As per a senior official, these students are usually scouted at the age of 10-11 years and are then made part of a five-year programme. Interestingly, this also acts as a source of talent for Indian Super League (ISL) football clubs. Last October, it was announced that nine talents from Reliance Foundations were selected to play for ISL Clubs. While Aritra Das, Muhammed Basith PT and Birendra Singh were picked up by Kerala Blasters FC, G Balaji and Aqib Nawab joined Chennaiyin FC, Muhammed Nemil, FC Goa, Thoi Singh at Bengaluru FC, Ayush Chhikara joined Mumbai City FC and Koustav Dutta – Hyderabad FC. “In the last two years as many as 12 talents have been scouted and picked up by ISL Clubs,” a senior source revealed. It should be noted that these deals are non-commercial.
Furthermore, RIL rolled out Reliance Foundation Youth Sports in 2016, across eight cities. The programme in 2019 expanded into 60 cities. “The objective was to reinvent and start competitions at college and school levels,” said a senior source. About 3,500-4,000 participate in the programme which focuses on football and athletics. The programme is run under Corporate Social Responsibility, claims the firm. The programme aids schools and colleges in scouting talents, which are otherwise too difficult to find. What’s more, RIL in partnership with the Odisha government has opened Reliance Foundation Odisha Athletics High-Performance Center (HPC) in Bhubaneswar, to future nurture talent.
From Reliance IMG to RISE
Flashback! It was in 2010 that Reliance Industries Ltd had rolled out the sports marketing firm through a 50:50 joint venture with IMG WorldWide. As per the deal, the mandate was to develop, besides market, and manage sports and entertainment properties. Over the last 10 years, the company has not only bagged many sports media rights on behalf of various broadcasters, but it also had set up the ISL along with the then Star India (Now Walt Disney Company India). Last year, RIL ended its 10-year-old partnership with IMG as it bought back the shares from IMG Singapore. As per BSE filings, the company had paid Rs 52.08 crore to IMG Singapore, to complete the acquisition. According to regulatory filings (standalone) accessed by data intelligence platform Tofler, RISE posted a 6.40% drop in revenue from operations to Rs 155.9 crore in FY20 as against Rs 166.6 crore in FY19. The company profit shrunk 15% to Rs 16.34 crore in FY20.
Over the years, RISE Worldwide has closed several sponsorship deals. For example, last October it inked as many as 36 deals for the IPL including closing the title sponsorship deal between Dream11 and the BCCI, which was valued at Rs 222 crore. Additionally, it had closed five commercial deals for Tamil Nadu Premier League.
The Viacom18 Story
Lately, the sports marketing company has clinched several sports broadcast rights for Viacom18 including Abu Dhabi T10, FIFA WorldCup 2022, among others. “While at a broad level RISE functions independently thereby earning a commission for every deal, the other key role being played is in the acquisition of media rights of tourneys,” said a person close to the development, on condition of anonymity.
Add to that, Viacom18 has hired former Star Sports India executive, Anil Jayaraj as CEO, Sports. “Reliance has been deep into sports from ISL to NBA, among other leagues. In many ways, it has played a critical role in shaping sports. Even as Viacom18 has of late acquired many broadcast rights for several tournaments, in India it is cricket which still rules the chart and with the IPL rights up grabs next year, a lot will depend on it,” said a senior sports analyst, on condition of anonymity.
Industry observers point out that Viacom18’s strategy currently looks like a borrowed one from Sony Pictures Networks India (SPN), the critical difference being the former is backed by the might of RIL. When SPN first acquired the rights of IPL in 2008 for 10 years for $918 million, the matches were at the time being telecast on SET Max and other channels. In 2016, the scenario changed as the network entered into a joint venture as ESPN returned to India, with the rollout of Sony-ESPN channels, post which it acquired TEN Sports channels for Rs 2,600 crore from Zee Entertainment Enterprises (ZEEL). With this SPN, became a serious player in the sports of business. “One should not forget that a lot has changed in the last 10 years. Today it’s not only traditional broadcasters who are gunning for these rights, but even online streaming platforms such as Amazon and Facebook have also made a dash for it,” said a senior former sports executive.
The IPL Conundrum
IPL over the years has become what EPL is to football fans. STAR India (now The Walt Disney India Company) won the IPL global media rights from 2018-2022 with a consolidated bid of Rs 16,347.5 crore. With BCCI set to initiate a fresh bid at the end of this year or early next year, industry observers point out that this time, one can expect different kinds of winners emerging. “The bidding amount may not go up to as much as what STAR had paid, but what might happen is that different organisations may grab different rights,” said a senior analyst.
With companies such as Amazon, Flipkart, besides Facebook and YouTube getting serious about original content, digital rights may be split by the BCCI.
The Jio Connection
And finally, it is all about Jio and creating a steady stream of content for the telecom operator. As per the latest Annual Performance Indicator 2020 report by the Telecom Regulatory Authority of India (Trai), Reliance Jio witnessed 10.9% growth in user base to 411.53 million (December 2020). The company’s market share rose to 35% at the end of December 2020. Content plays a significant role in RIL’s plan to promote Jio especially when the company is looking at launching an array of products including phones as well as laptops. It all comes down to one thing, with Jio being the main product, the company is building different elements such as Ajio, Reliance Retail, Reliance Brands (premium products), among others which will help in creating a loyal consumer base. To be precise, a one-stop-shop for the Indian consumer.