IPL valuation drops to Rs 82,700 cr amid concerns over fewer media rights bidders in next cycle

New Delhi: According to D&P Advisory's latest report on IPL and WPL valuations, the IPL ecosystem value has dropped from Rs 92,500 crore to Rs 82,700 crore, a decrease of approximately 10.6% compared to the previous edition. 

Santosh N, Managing Partner of D & P Advisory said, “We anticipate certain demand-side constraints in the next IPL media rights cycle auction due to a decrease in number of potential bidders. Several significant developments from the past year have led us to revise our media rights value estimates.”

Throwing light on the reasons for the decreasing value of IPL, the report stated that the failed merger between Zee and Sony (which was expected to go through as of the last valuation) impacted market dynamics. 

On top of it, the merging of Reliance-owned Viacom18 and Disney-owned Star India has essentially created monopolistic control over television and digital broadcasting.

The report further highlighted that the delay in the entry of major tech players such as Amazon, Meta, and Apple into the IPL media rights arena exacerbates the situation.

In last year’s report, D&P Advisory noted that the IPL ecosystem had grown from Rs 87,000 crore in 2022 to Rs 92,500 crore in 2023, showing a significant 6.3% increase.

2023 was also the first year that separate media entities held the digital and television rights for the IPL. In their previous valuation report, D&P Advisory had already accounted for the expected boost from the media rights renewal after the current cycle.

In 2023, Viacom18 outbid Disney Star to secure IPL streaming rights for five years, paying Rs 23,757 crore, while Disney Star held onto the TV rights for Rs 23,575 crore.

Therefore, the potential dearth of vigorous competition could lead to a more conservative approach in the bidding for IPL media rights. 

According to Santosh N, “The days of escalating bid prices driven by fierce competition may be behind us, casting a shadow over the future growth trajectory of IPL’s media rights valuation. Despite a substantial growth opportunity for digital platforms, the pivotal question remains: will market forces generate sufficient competition to drive up the per-match value of IPL rights?”

However, compared to the previous edition, the WPL ecosystem's value has increased from Rs 1,250 crore to Rs 1,350 crore, marking an 8.0% rise. 

The report goes on to emphasise that a league's media rights are its most valuable asset, underscored by the massive investments from broadcasters, tech giants, and OTT platforms seeking to capture their content. 

 The report suggested that the future of media rights for major sporting events like the IPL is increasingly shifting towards digital platforms rather than traditional television broadcasting as they cater to modern viewers' preferences for on-demand and personalised content consumption.

Some industry experts advocate for the BCCI to adopt a strategy similar to that of American sports leagues by segmenting and packaging IPL media rights. “This method has become a global benchmark for enhancing the value of sports media rights, setting a precedent that can significantly benefit the IPL,” the report added.

If tech giants like Amazon, Google, Apple, and Meta enter into the IPL broadcasting arena, it could further revolutionise sports media in India, as they leverage their digital infrastructure to enhance viewing experience and innovate on content delivery, highlighted the report.