The Indian Premier League, which is a borrowed concept from the English Premier League (EPL), is perhaps one of the most successful gambles by the Board of Control for Cricket in India (BCCI). In its 15th year, the BCCI is expected to earn additional revenue of Rs 1,271.5 crore per year (Rs 12,715 crore for 10 years) from the new teams besides Rs 444 crore which it has received from VIVO as a reassessment fee. Add to this, the money earned from other sponsorship deals and media rights from Walt Disney Company India. “Cricket garnered over 80% of sports TV viewership in 2021 and the IPL was a significant contributor to that. The property has cemented its position as one of the most effective impact properties for advertisers in India, as well as a key driver of SVoD revenues,” Ashish Pherwani, partner, Media and Entertainment Advisory Services, EY, told FinancialExpress.com.
Extra IPL – Extra Overs
With two new teams in the pocket, the BCCI has increased the number of matches to 74, from 60. What this means is that the revenue from the central pool which consists of lead sponsors such as the TATA group, among others is expected to increase by 30% to anywhere between Rs 700-800 crore. Add to this the 30% increase in media rights that Walt Disney Company India (former Star India) is expected to pay. This amounts to about Rs 4,255 crore from Rs 3,269.6 crore.
The Walt Disney Company had won the broadcasting rights including digital for the IPL for Rs 16,347.5 crore (US$ 2.55 billion) for a period of five years in 2017. An email sent to The Walt Disney Company, remained unanswered till the time of publishing of this story.
In all, the total earning from the central pool is expected to increase to about Rs 5,300 crore. This however does not include the money earned from gate revenues which are somewhere between Rs 100 – 200 crore. While the increase in earnings shows that both the BCCI and the teams will end up earning more this year, it is not quite true. “There will be a proportionate increase in the central revenue pool on account of the increase in the total number of matches from 60 to 74, but that gets nullified because of the distribution of this money amongst 10 teams instead of 8. So the figure will be more or less the same per team in terms of share of each team from the central revenue pool,” Mohit Burman, co-owner, Punjab Kings, said. Usually, 50% of the revenue earned from the central pool is passed on to the franchises by the BCCI. However, this year, the money earned will be distributed among 10 teams as opposed to 8 teams.
As per several news reports, BCCI clocked a turnover of Rs 14,489.80 crore at the end of FY19.
Team Spirits
With the IPL being round the corner, teams have begun to sign up for sponsorships. Usually, it is the tier -1 teams including Mumbai Indians (MI) , Chennai Super Kings (CSK) , Royal Challengers Bangalore (RCB), Kolkata Knight Riders (KKR), that draw more sponsorship revenue compared to the tier-2 teams – Sunrisers Hyderabad (SRH), Delhi Capitals (DC) or tier-3 teams such as Rajasthan Royals (RR) and Punjab Kings. As per sources, Mumbai Indians have signed a three year deal with Slice – a fintech company, valued at Rs 100 crore. According to industry estimates, typically premium franchises such as MI and CSK charge anywhere in the range of Rs 30-33 crore to advertisers for a spot on the front of the jersey. Despite being in the top tier, the cost of sponsorship on front of the jersey when it comes to RCB and KKR, is around Rs 23-25 crore. The sponsorship rate for other teams such as Delhi Capitals, Sunrisers Hyderabad, Gujarat Titans and Lucknow Super Giants ranges between Rs 17-18 crore. And lastly, the cost is between Rs 12-14 crore for Rajasthan Royals and Punjab Kings.
As for a slot on the back of team jerseys, the cost halves. For instance, a sponsor typically pays between Rs 6-7 crore in case of Punjab Kings, and so on and so forth. Moreover, a premium team earns between Rs 4-5 crore from helmet sponsorship, and the price reduces to Rs 1-1.5 crore for others. In the case of shoulder spots, the cost of sponsorship for the leading arm is about Rs 6 crore for tier – 1 teams, and Rs 2 crore for tier-2 teams.
Mumbai Indians posted a decline of 16.4% to Rs 317 crore in revenue in FY21 when compared to FY20. Similarly, Chennai Super Kings also posted a decline in revenue of 29.2% to Rs 247.8 crore in FY21.
BCCI’s Media Play
Meanwhile, The Walt Disney Company India, which is the official broadcaster, is about to pay Rs 4,255 crore to the BCCI, an almost 30% increase due to the rise in number of matches to 74. In order to break-even, the broadcaster needs to earn somewhere around Rs 4,500 crore. However, as per industry analysts, the broadcaster would end up earning about Rs 3,900-4,100 crore. “This year, IPL is expected to clock higher traction. On the back of this, a lot of new age clients are expected to onboard this year. Thereby, it looks like Star will be able meet the ad sales targets,” Ramsai Panchapakesan, SVP and national head – media buying, Zenith India, said.
It is believed that Star has increased its ad rates by 10-15% depending upon the category. Usually, a T20 match has 2,200-2,400 seconds of ad slots available. With 74 matches to be played this year, what this means is that just one channel will provide Star with ad inventory worth 1,77,600 seconds – this translates to 49.3 hours. Now add to this the 17 channels on which The Walt Disney Company India will telecast the matches – this takes the inventory to 838.1 hours of ad slots. But not all slots are sold on a standalone basis. Usually HD is sold separately for a premium, but there are times some portion of the inventory is bundled with English SD channels.
According to industry estimates, the broadcaster is charging anywhere between Rs 14.85 – 15.20 lakhs for a 10-second slot. Furthermore, the sports broadcaster has rolled out various sponsorship packages starting from Rs 130-180 crore for a co-presenting package and associate sponsor package worth Rs 85 – 105 crore. Additionally, other packages such as sixes, fours and outs highlights are being sold for Rs 7-10 crore for half tournaments. The broadcaster has onboarded 15 sponsors including Dream11, Tata Corporate, Byju’s, CRED, Kamla Pasand, Asian Paints, Phone Pe, Swiggy Instamart, Meesho, Spotify, Pepsi, Havells, Muthoot Fincorp, AMFI and Mondelez.
As for Disney+ Hotstar, the over-the-top (OTT) platform is believed to be charging Rs 22 – 26 crore for associate sponsorship. Further, the OTT platform is said to be charging Rs 200-215 per 10 seconds for a mid-roll ad to advertisers. The streaming platform recently announced Dream11 as the co-presenting sponsor with Tata and Samsung as the ‘co-powered by’ sponsors. This year the broadcaster claims to be witnessing significant interest from multiple brand categories including FMCG, BFSI, automobile, consumer durables, gaming, e-commerce, telecom and handsets.
“Star has been taking inflation of about 15-20% every year on IPL. This year, the demand has gone up with newer brands and categories being interested. There is also an increase in the number of matches and teams, thus, leading to more opportunities. Advertisers choose the platform as the recall value is higher. The inflation they take varies depending upon multiple factors. For instance, for the semifinals and final matches, the ad inventories are sold at a much higher rate,” Sujata Dwibedy, group trading director, Amplifi India, highlighted.
Even though it seems that this year too the BCCI has managed to hit a jackpot, what is to be seen is how it manages to continue to reinvent the IPL in the coming years. With the broadcast rights up for renewal this year, what is to be seen is if the terrestrial and digital rights are sold separately, thereby allowing the sports body to earn more money. “The BCCI can also borrow formats from the National Football League (NFL), where the telecast rights are awarded to different players on weekdays and weekends,” said a senior analyst, on the condition of anonymity.
NFL signed media rights deals for $110 billion over 11 years on March 18, 2021. In the new contracts, ABC will air the Super Bowl for the first time since Super Bowl XL in 2006. Starting 2022, Amazon will be the new home for Thursday Night Football.
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