A weakening advertising market and a lacklustre response from broadcasters appear to be weighing on the upcoming auction of bilateral cricket media rights for 2023-27, for which the Board of Control for Cricket in India (BCCI) requested tenders this week.
While the BCCI has reportedly approached companies such as Amazon and Google to gauge their interest in bidding for the bilateral cricket rights, informed sources have told FE that the cricket body, which is the richest in the world, may extend the date of submission of tenders if the response is weak. The last date for tender submission is August 25.
The BCCI expects to get around Rs 6,300-6,500 crore, according to media industry sources, from the sale of 102 matches from the upcoming auction. This is just a little over what it got in 2018, when it had raked in Rs 6,138.10 crore from the auction of bilateral rights for the same number of matches (for 2018-2023 cycle).
At that time, the winning bidder, Disney Star, had paid over one-a-half times more versus the previous cycle (2012-18), when it had secured the rights for Rs 3,851 crore.
Some media experts say that the bidding could touch Rs 9,000-10,000 crore, but that is provided the key broadcaster networks including Disney-Star, Sony-Zee and Viacom18 participate in the auction process, which is unclear at this stage.
“Disney is considering strategic options for its Indian business and Sony and Zee are in the midst of a proposed merger that has been delayed,” says Karan Taurani, senior vice-president (research) at Mumbai-based brokerage Elara Capital.
That leaves the Reliance-backed Viacom18 in the race. After picking up the digital media rights to the Indian Premier League (IPL) for Rs 23,758 crore last year, Viacom18 has reportedly been aiming to consolidate the majority of cricket media rights under its umbrella. But unlike the aggressive bidding it engaged in during the IPL media rights auction, Viacom18 may bid cautiously this time.
While the IPL auction last year saw the BCCI cumulatively earning nearly three times that of what it had in the previous cycle (Rs 48,390 crore for 2023-27 versus Rs 16,348 crore in 2018-22), this was done in anticipation of viewer and advertiser interest in the T20 tournament. Bilateral cricket, say experts, may not attract that kind of attention.
“Bilateral cricket has been on the wane for some time now,” says Sajal Gupta, chief executive officer at Gurugram-based Kiaos Marketing, a media and marketing consultancy.
“This year, advertisers are also conserving their resources for the upcoming ODI Cricket World Cup, which is expected to attract significant viewer interest. The Cricket World Cup is also happening in India, which is a plus. And it coincides with the festive season, which makes perfect sense for advertisers to invest behind the property,” Gupta says.
Media agency GroupM’s mid-year advertising forecast has trimmed India’s advertising growth rate for the calendar year 2023 from 16.8% projected earlier to 12% now. Experts, however, cite macro-economic challenges including inflationary pressures, especially, food inflation, weather uncertainty and rural demand still being weak for a lower advertising growth rate this year. The advertising growth rate next year for India is projected at 13.6% by GroupM.
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