A WEEK TO THE DAY after the thirteenth edition of the Indian Premier League completed its 2020 innings, official broadcaster Star Sports has ticked off all the boxes as far as viewership, subscription numbers are concerned. Ergo OTT platform Disney+ Hotstar, which is where parent company Walt Disney has (and will have) its primary focus in the post COVID-19 era.
Speaking of Disney+ Hotstar, in its earning call late last week, the media behemoth declared that Disney Plus ended Q4 with 73.7 million paid subscribers globally. Of this, India’s Disney+ Hotstar subscribers now account for roughly 18 million (a little under 25%). It goes without saying of course that it was the IPL that was the biggest contributor to Disney’s streaming growth story in India.
So back to the IPL and its deliveries. In terms of viewership, IPL 2020 has broken viewership records for Star Sports, seeing a 28% increase as compared to IPL 2019.
How did that translate to revenues? According to exchange4media, quoting industry estimates, the broadcaster has clocked around Rs 2.3 to Rs 2.4 billion of advertising revenue from TV and Rs 250 million from Hotstar. How does that compare to 2019? As per e4m, last year’s figures were close to Rs 20 to Rs 21 billion from TV.
As for SportzPower, industry conversations that this website has had on the matter are aligned with e4m as far as Disney+ Hotstar is concerned, not so for Star Sports. This is how we see revenues from the IPL as having panned out:
Advertising sales from television – Rs 26 billion.
Ad sales from streaming – Rs 2.5 billion
Distribution revenues from TV and streaming – Rs 11 billion.
All told, it totals Rs 39.5 billion as accruals from IPL 2020.
As for the debit column, there is of course the Rs 30.03 billion that is the media rights fees that Disney had to pay to the BCCI.
What of marketing costs? Ironically, COVID-19 helped the broadcaster on that score. Why? Well for starters, seeing as the nation is still pretty much in lockdown, no costs for outdoor media marketing. Pretty much the same applies for print advertising, for which, as per SportzPower’s reckoning, outgoes were down 75% at the very least.
In terms of production costs, the commentary crew as well as the production crew were were paid their usual rates. As far as the production crew were concerned, they had to brought to the UAE 14 days ahead, hotels were sanitised, bio bubbles were created so this would have added to costs. However, as the whole tournament was delivered out of three venues and it entailed no air travel, net net there would likely have been a cost benefit is how SportzPower sees it.
Additionally, Star operated remotely for its studio and language feeds. And while the host broadcaster feeds were all produced from the ground, the fact that Star is paid a fee for managing the production for all BCCI owned cricket properties, means that there was no additional costs for the broadcaster on that score at least.
Keeping all this in mind, and while SportzPower can’t claim to have accessed exact data, as per this website’s reckoning, approximately Rs 500 million would have covered both external marketing and internal production costs.
So totalling media rights fees and broadcast delivery costs, Rs 30.53 billion would have been the approximate cost of mounting IPL 2020 for Star Sports.
Based on these numbers, SportzPower calculates that Disney is in the region of Rs 9 billion to the good from this year’s IPL.
However, it can be stated unequivocally, that this WILL NOT be the case in 2021 when international cricket returns to India.
The big one of course is India hosting the ICC World Twenty20 in October-November. Will Disney come out in the plus from the mega-event? All indications are that it will.
The same, however, cannot be said of the bilateral tours that BCCI will be hosting in 2021.
A look at the ICC Future Tour Programme for 2021 shows India hosting the following series:
1. England for 5 Tests in Feb-March
2. Afghanistan for 3 ODIs in March
3. South Africa for 3 ODIs and 3 T20s in Oct
4. New Zealand for 2 Tests and 3 T20s in Nov.
That totals 19 bilateral fixtures in 2021. For each game, just the media rights fee that Star has to pay the BCCI is Rs 700 million. That is a massive Rs 13.3 billion for the year. What this translates to is that Disney will perforce have to account for BIG losses from the 7 Tests, medium losses from the 6 ODIs and (maybe) break-even from 6 T20s.
POSTSCRIPT: The COVID-induced cancellation of the Australia T20 World Cup 2020 and the absence of BCCI-hosted bilateral cricket this year will ensure that Disney’s P&L account from India cricket for 2020 makes for positive reading for the House of Mouse’s leadership team in Burbank, California.
