From Star India’s distress sale to JioStar’s ICC exit: How cricketing media-rights bubble caught up

New Delhi: JioStar’s decision to walk away from the remaining two years of its $3-billion ICC India media rights deal is the latest and clearest proof that cricket rights in India have been bid up to a level where even the biggest broadcasters cannot sustain them.

This is exactly what BestMediaInfo had flagged on February 28, 2024, when Disney sold Star India to Reliance Industries at a valuation of $3.5 billion, barely seven years after Rupert Murdoch sold the same business to Disney for $14 billion. In simple terms, Star India’s value fell 75% in seven years.

During this period, the entire sports ecosystem prospered on the back of Star’s aggressive rights buying. Sporting bodies, IPL franchises, players, agencies and even advertisers gained from rising payouts, richer sponsorships, and swollen media spends.

Also read: Exclusive: Prasar Bharati explores ICC media rights amid JioStar deal uncertainty

The only entity that could not convert this into sustainable value was the primary broadcaster that funded the boom.

Put bluntly, the ecosystem grew on Star’s money. The broadcaster continued to feed growth for everyone else while its own balance sheet kept weakening, ending in a distressed sale at one-fourth of the earlier valuation.

If this structure is not corrected urgently, any broadcaster risks meeting the same fate.

Five days later, on March 5, 2024, BestMediaInfo laid out two hard tasks before Uday Shankar, now vice chairperson of the combined entity.

The first was to correct TV ad rates using the scale of a 100-plus-channel network. The second was “to bring the cost of media rights down heavily, with the expectation that the absence of equally deep-pocketed competition could bring costs down by at least 50 per cent over time.

At that time, this sounded like a forward-looking challenge.

Six months later, in August 2024, Star India wrote to the ICC seeking a renegotiation of the $3-billion deal. Star pointed to lower Indian viewership for the T20 World Cup in the US and West Indies because of unfriendly match timings and weather-disrupted games, including an India match.

Cut to today. JioStar has reportedly told the ICC that it cannot service the remaining two years (2026 and 2027) of the four-year India contract because of heavy losses.

The ICC has already begun a fresh sale process for 2026–29, reportedly targeting about $2.4 billion and sounding out Sony Pictures Networks India, Netflix and Amazon Prime Video as potential buyers.

The ICC deal that wrote its own warning

The ICC rights story itself shows how far the cricket economics have drifted from reality.

In 2022, then Disney Star (now JioStar) acquired the ICC India media rights for 2024–27 at around $3.2 billion. This was just for the Indian market for four years.

By comparison, Star’s earlier eight-year global ICC deal for 2015–23 was about $2.02 billion across multiple territories. The UK, the second-largest cricket market, was worth only around $260 million in that cycle.

Today, India alone is priced at more than ten times the UK on an annualised basis. One market is carrying an unprecedented share of cricket’s commercial risk globally.

For the 2023 Men’s ODI World Cup in India, which is a reasonable proxy for market potential, the combined TV plus digital ad revenue was roughly Rs 2,000-2,200 crore.

Except for one men’s World Cup in some format every year, most ICC tournaments generate modest advertising interest. A four-year revenue pie cannot keep pace with a four-year rights bill of this magnitude.

The stress showed up quickly in JioStar’s books. For the year ended March 31, 2024, JioStar reported a standalone net loss of Rs 12,548 crore. Of this, Rs 12,319 crore was a provision against an “onerous contract” linked to the ICC rights.

In accounting terms, an onerous contract is one where expected cash outflows exceed expected cash inflows. Once such a provision is booked, the company is admitting that, on its own assessment, the deal will not recover its cost base under any reasonable revenue scenario.

In other words, JioStar itself acknowledged that the ICC India rights package, at that price, was commercially unsustainable.

Matters got worse when the $1.5-billion TV sublicensing agreement with Zee for ICC men’s and Under-19 events collapsed at the beginning of 2024. That deal was supposed to de-risk the linear TV side. When it fell through, the entire burden snapped back to JioStar, triggering arbitration and a damages claim of over $1 billion. The arbitration is still going on in London.

Put together, the onerous contract provision, the failed sublicensing, the arbitration and now the reported early exit. These developments show that even for a consolidated giant like JioStar, the current ICC India rights are financially unsustainable.

IPL: Rights growing 3-4X, revenues 10-15%

The same mismatch is visible, in even starker form, in the IPL. When the league launched, Sony-World Sports Group bought the 2008-2017 broadcast rights for about Rs 8,200 crore. In 2017, Star India secured a global TV plus digital package for 2018-22 at Rs 16,347.5 crore.

For the 2023-27 cycle, the BCCI sold IPL media rights for Rs 48,390 crore, a near three-fold jump in just one cycle. TV rights cost Rs 23,575 crore, and India digital rights cost Rs 23,758 crore. On an annualised basis, the media rights bill alone is roughly Rs 9,678 crore a season.

What about revenues?

Redseer and other analysts estimate total advertising around IPL 2023 at about Rs 10,121 crore.

This covers everyone: Broadcasters, BCCI, teams and associated platforms. Out of this, broadcaster ad revenue (Star Sports plus JioCinema) was roughly Rs 4,700 crore.

The same reports suggest only single-digit to low double-digit growth in ad revenues going forward.

Contrast this with JioStar’s actual outgo. Per year, it is paying around Rs 10,000 crore to the BCCI for IPL media rights, while earning roughly Rs 5,000 crore in ad revenue.

Even allowing for subscription income and future price hikes, there is a large gap between visible, reportable revenues and the rights bill, and this is before spending a rupee on production, distribution, marketing, technology or platform costs.

Rights values have been growing at 3-4X every five years. Market monetisation is growing at 10-15%. That gap is the core problem.

Bilateral cricket and the broader pattern

BCCI’s home international rights show a similar pattern, albeit on a smaller base.

In 2018, Star India acquired the 2018-23 BCCI India media rights package, covering home internationals and some domestic matches, for Rs 6,138.1 crore.

For the 2023-28 cycle, Viacom18 took over at Rs 5,963 crore for 88 matches. On the surface, the headline value is slightly lower. But the average per-match cost has risen to around Rs 68 crore, higher than the previous cycle.

Again, rights inflation outpaces realistic monetisation, especially outside the marquee India-Pakistan or World Cup context.

The myth of OTT-led salvation

For years, the defence of aggressive bidding has rested on a single idea: OTT will save us.

Rights holders argued that streaming growth would, one day, make high rights costs profitable. Platforms were expected to scale like Netflix, with subscription, data and cross-selling offsets making up for losses on pure ad inventory.

That day has not come. The Indian market has moved at its own cautious pace, growing steadily but not exponentially. ARPUs are low, churn is high, and consumers are price-sensitive.

Yet the same assumptions persisted. OTT growth, distribution power and “intangible benefits” continued to be cited as reasons to bid aggressively for cricket rights.

The linear broadcasting is still popular and affordable to the Indian population, but unfortunately, the sector continues to face artificial hurdles due to heavy handed regulatory regime that refuses to reform itself even though there is writing on the wall. The stakeholders believe the frequent tariff changes sound a death knell to the sector, as the regulatory uncertainty disincentivises fresh investment or the introduction of new or innovative business models to recover investment, particularly in genres like sports, which require huge investment.

In other words, this is the 1991 moment for the Indian broadcasting sector - now or never!!

As the broadcast rights for the Indian market run in billions of dollars, here is the trillion-dollar question: why should any broadcaster invest tens of thousands of crores if the so-called intangible benefits do not show up in profit and loss accounts?