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Winner’s curse IPL remains money-spinner for BCCI

To say that it was a hectic and tense three days for the Indian Premier League auction would be an understatement. Ask the big broadcasters who were in the fray for the media rights to the property for the next five years (2023 to 2027) and they admit that the process, though transparent, was nerve-wracking.

Cricket’s Indian Premier League (IPL), now 15 years old, has been called a winner’s curse given that five years ago Star India paid an unthinkable 16,374 crore for its global media rights and barely broke even. Yet Disney Star bid and won the TV rights again for 23,575 crore and Viacom18 paid a princely sum of 23,758 crore for total digital rights.

Obviously, the tournament, which saw a 300% increase in value in five years, will not turn in profits in a hurry. However, it’s a must-have in a broadcaster’s portfolio as it’s a marquee property with a national footprint. It also eclipses competition for those 45 days of the tournament.

This year’s auction narrative was skewed towards digital media rights that came neck-and-neck in costs with TV rights. Five years ago, Star India paid upwards of 3,000 crore for digital media rights. This year Viacom18 bagged them for 23,000 crore. Streaming is the future, explained Viacom, for betting on digital. The company has the Jio Cinema app and streaming service Voot in its stable. However, nothing stops it from launching a new platform, rebranding an old one or leveraging all three for IPL.

Paying big bucks for streaming rights makes sense as paid video subscriptions rose to 80 million in 2021. While smartphone users reached 503 million, connected TVs crossed the 10 million mark, said a Ficci-EY report. Additionally, digital media spends are expected to grow at 30% a year for the next five years. “Digital marketing has a lot untapped avenues that brands and IPs can capitalise on. IPL has become a platform for a lot of brands and startups to advertise on,” said Himanshu Arora, co-founder of digital agency Social Panga.

Disney Star, meanwhile, though keen on retaining both digital and TV rights pulled back when the cost of acquisition became unviable for business, said a person close to the company’s bidding strategy. The strategy was led by Rebecca Campbell, chairman, international content and operations, The Walt Disney Co.

On TV rights, a Disney Star executive said, “We’re confident of our business plan given that the Star network enjoys 29% market share in total TV consumption across all its channels.”

Disney Star’s confidence also stems from the room for growth for TV in India. IN 2020, Broadcast Audience Research Council (BARC) India, said TV homes in the country increased by 6.9% to 210 million, up from 197 million in 2018. TV viewing individuals also grew by 6.7%, it said.

Still, not having IPL on Hotstar will cost the platform its subscribers. Currently, Disney Hotstar is the market leader in streaming with nearly 45 million subscribers in India.

However, Campbell tried to soften the blow when she said the company was focused on growing its robust slate of original entertainment content for Disney+ Hotstar and its regional television channels.

“We made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights, given the price required to secure that package,” she said.

Disney Star will explore “other multi-platform cricket rights, including future rights for International Cricket Council (ICC) and BCCI, which we currently hold through the 2023 and 2024 seasons, respectively,” she said.

Abneesh Roy, executive director, Institutional Equities at Edelweiss, on Tuesday said it would be difficult for the winners to make any profits in initial years. Two big revenue streams for sports channels could potentially get impacted with the government banning surrogate advertising by liquor and pan masala companies.

Also, media has been asked to refrain from carrying ads from online betting companies. These bans would accordingly make it difficult for sports channels to air a disproportionate share of such ads, he said in a report.

Yet IPL advocates said innovation and new revenue streams and not just dependence on advertising will determine the success of the league for the rights holders.

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