SO FINALLY, AFTER FIVE MONTHS OF DELAYS, the Board of Control for Cricket in India has released the Invitation to Tender (ITT) for the media rights to world cricket’s most valuable property for its next five-year cycle – 2023-2027.
For the record, the BCCI released the tender for the Indian Premier League media rights on Tuesday, March 29.
The BCCI will arrange an e-auction for the new bidders for the first time in IPL history and it will commence from June 12, board secretary Jay Shah confirmed.
“With two new teams, more matches, more engagement, more venues, we are looking to take #TataIPL to newer and greater heights,” Shah posted on his Twitter handle. “I’ve no doubts that with this process there will not only be revenue maximisation but also value maximisation, which will benefit India Cricket immensely.”
As for the terms and conditions that have been set out for the bid process, what can be understood from the reports circulating are as under:
74 games per season across all 5 years.
The rights packages on offer are 4. And they break down thus:
TV linear – India (Bundle A)
Base price Rs 49 cr ($6.4m) per game
Overall base price Rs 18,130 cr
Digital – India (Bundle B)
Base price Rs 33 cr ($4.4m) per game
For 5 years Rs 12,210 cr
18 Games Non-exclusive (Bundle C)
[Opening match, 4 playoffs, night games of the double header]
Base price Rs 16 cr ($2m) per game
For 5 years Rs 1,440 cr
For the non-exclusive digital rights, the BCCI is broadly following the Premier League model in the UK where Amazon has taken 20 games, with the crucial difference there being that said rights are exclusive.
Rest of World TV and Digital (Bundle D)
Base price Rs 3 cr ($400,000) per game
For 5 years Rs 1,110 cr
Consolidated base price
Rs 32,890 cr
The first level filter that has been put in place by the Indian cricket board is regarding what entities can place bids. Not really relevant for the purposes of this article but just as an aside, a net worth of Rs 1,000 crores ($131 million) is reportedly required for any bidding company.
What is more relevant is two-fold. First is that consortium bids have been barred and second and even more important (as far as we are concerned at least) is that consolidated bids will NOT be considered. Four packages, four separate bids. That is the way it will play out.
What this precludes is the situation last time round where then Star India’s winning bid of Rs 16347.5 cores for the 2018-2022 cycle of rights gave the network the “whole caboodle” as far as the IPL was concerned.
Referring back to Shah’s comments of “revenue and value maximisation “, what this also ensures is that a monopoly hold of the IPL rights is prevented, as is the case in developed sports media markets when high value rights are put up for bidding. Read Premier League, NFL, NBA, MLB and the like.
If that be the case, what of the fact that the BCCI has set a base price of Rs 32,890 crore for consolidated IPL bids. This would just be a notional number, one that is derived from adding the base prices of each package on offer to arrive at a number that provides context when referring back to Star India’s winning bid in the previous cycle.
Now coming to the bar on consortium bids. Seen from this perch, what needs keeping in mind from the get go is that while consortium bidding will not be in play, nothing prevents pre-bid agreements for post-bid alliances.
This is immediately clear in the case of Sony Pictures Networks India and Zee Entertainment Enterprises Ltd, which are actively in the process of a merger. While this means that the two companies will be bidding separately for any of the 4 rights packages that they publicly indicate an interest in, it is fairly obvious that strategy wise they will be operating in tandem.
A digression is warranted here. Sony will but naturally think back to the previous IPL rights cycle bidding and contemplate what might have been if the clauses that have reportedly been introduced this time round were in place then. It is worth recalling that Star wouldn’t even have been in the frame if such conditions had existed then. To rewind. At Rs 6,196.94 cr, Star’s bid for India television rights would have fallen far, far short compared to Sony’s bid of Rs 11,050 crore. This may all be in the realm of ifs and buts, but still worth noting.
Coming back on topic, there is also the case of Amazon and Airtel, which this website understands, are “in this together”. If such is indeed the case, then a post-bidding arrangement between the ecommerce and media giant and the telecom major would be par for the course.
Now we can delve into the bidding possibilities that devolve around the four packages.
India television rights
Four serious competitors expected – incumbent Disney Star, SPNI, Viacom18 and the potential joker in the pack Zee.
Nothing really beyond what has already been written that this author can add as to the credentials of Disney Star and SPNI. They are the two that have had direct experience with the IPL and it only boils down to who bids more aggressively. Having said that, if Sony took the more traditional route vis-a-vis monetising the most valuable media rights in cricket, it was Star that really upped the game big time in terms of IPL’s revenue potential.
In the case of Viacom18, the bald truth is that the network is a small player in the Indian television broadcasting business when stacked up against the other two and has zero experience with monetising big ticket sports media properties in India.
But it does have two positives going for it. The lower on impact positive is having onboarded Anil Jayaraj from Star as its CEO for the sports business. He knows everything there is to know about monetising the IPL from his time at Star.
The big impact development (if true) is the news reported in January (after which there has been radio silence it needs noting), that Uday Shankar, former boss of Star India, and James Murdoch, his boss from then Star parent 21st Century Fox, will pick up a 39% stake in Viacom18 in a deal size estimated to be in excess of Rs 12,000 cr. The strategic chutzpah that Shankar and his former sports business CEO at Star Nitin Kureja bring makes for a potent force. As CEO of the Indian arm of Murdoch’s investment company Lupa Systems, Kukreja will be integral to the strategy that will be unwrapped in the IPL bid. Presuming again that Shankar-Murdoch and Viacom18’s controlling stakeholder Reliance Industries Ltd are indeed proceeding on the strategic partnership.
Then there is Zee. This website sees a Zee bid as a certainty and one that offers Sony a “flanking attack” option. They are technically, two separate companies at the moment and so have a clear legal case for bidding separately. If potentially either Sony or Zee do end up winning the bid, they will be a merged entity before this year is out, so it will all be “in-house” before IPL 2023 comes around.
Digital – India
Disney Hotstar is the incumbent but it would be a brave punt to bet against the RIL-owned telecom major Jio. It has the added advantage that internet giants Facebook(9.9%) and Google (7.73%) are stakeholders.
As for Amazon and Airtel, as already noted, if a post bidding arrangement is in place, then it would make for a formidable competitor.
Non exclusive rights (digital) – India
What can be stated with certainty here is that Amazon and DreamSports-owned digital sports platform Fancode (whose sister concern Dream11 is the most dominant fantasy sports platform in the country) will both be in the fray.
Rest of World (RoW)
Disney Star is a cert as they say and the best placed to monetise it assuming it wins the bid. Zee could possibly make a bid but Sony and Viacom18 are non-contenders as far as this website is concerned.
There is also talk in industry circles that global agencies could put in bids for RoW rights. What immediately comes to mind is Endeavor Group Holdings, which owns global sports, events and talent management company IMG. For the record, IMG held the event management rights of the IPL for 13 years from 2008 to 2020.
So what of the potential composite bid sizes that BCCI has been talking up (naturally) and the media has been rife with speculation around? That deserves separate examination/s.
(An earlier and less detailed version of this article appeared first as a signed column on TV9 Digital)
