IPL media rights: From broadcasters to tech giants, what will be the gameplan for Sunday's e-auction

The stage is set and strategies are almost finalised for the much talked about IPL media rights e-auction to be held on Sunday. The outcome of the auction is expected to be announced on the same day, unless the bidding does not turn into a full-blown war.

Players in the fray this time are Disney-Star, Sony, Zee, Viacom18/Reliance, Google, Netflix, Amazon, Apple, Facebook, Dream11, Sky Sports UK, SuperSport SA and Fancode.

Almost all the big broadcast and digital players seem to have fallen prey to BCCI’s plan. The board did not fix the base price on the basis of valuation and projected ROI, sensing that no one can afford to leave the tournament’s rights at any cost.

While BCCI officials have been quoted multiple times in media reports saying that they expect to earn up to Rs 50,000 crores from IPL media rights, the board has kept the base price at Rs 32,890 crore.

Media analysts are of the view that this kind of valuation game is harmful for both broadcasting and sports businesses and this is akin to killing the golden goose.

Until a few days back, the incumbent media rights holder Disney Star India wasn’t being considered as an aggressive bidder but with Walt Disney Chairman, International Content and Operations, Rebecca Campbell camping in India, the broadcast and digital player is again in the limelight as a strong contender.

“As we speak, only Star will be able to monetise the broadcast rights. But they might not go beyond a sustainable amount for broadcast business. Sony is said to be in deep trouble if they pick up the broadcast rights. They recently bought Zee and if they go for IPL’s broadcast rights, they will run into debts as the amount required is as big as is needed for acquiring an entire network,” a media observer said.

“The biggest gameplan for the media rights is the coming together of Google, Jio and Viacom18. Google has stakes in Jio and the global tech giant is eying to build its YouTube premium business in India which has not taken off well so far. Google wants to ride on IPL to build its YouTube premium business. They may have arrangements to make IPL matches available on Jio platforms as well.”

“At the same time, Viacom18 led by Uday Shankar will focus on building their broadcast business. The irony is that he bought 39% stake in Viacom18 for Rs 12,000 crore and if he buys IPL broadcast rights for five years, it would surpass the value of the entire company,” the observer added. “Having said that, in all likelihood, Viacom18 and Google will not leave any stone unturned to grab the broadcast and digital rights, respectively, at any cost.”

Although Reliance has an edge with telecom among many heads including broadcast and digital, Star, which built Hotstar riding on the IPL wave, is said to be set to put up a strong fight for digital rights this time.

Digital’s base price is Rs 12,210 crore, which comes down to Rs 33 crore per match. 

“Looking at the scope of revenues from digital that includes both SVOD and AVOD models and the audience acquisition for the entire platform, any large digital player can bet on this amount. Plus, there is no leakage on digital like broadcasting,” a head of a large media agency told BestMediaInfo.com.

“Even if you lose money, it is required for long-term plan and any player will pick the rights considering this amount against high volume customer acquisition,” the media agency head added.

When asked about a broadcaster’s return on investment, the media agency head said, “Broadcast rights will surely be a winner’s curse as no broadcaster will be able to earn Rs 100 crore per match (including all expenses) to meet its investment. Star may give it a try but beyond a point, it will have to let it go. In the current scenario, FMCG has pulled out money from television advertising.”

The eSports companies will go for non-exclusive rights for 16 matches.

Info@BestMediaInfo.com