MUMBAI: “Every bidder has its threshold. They are slowly reaching that point. If it reaches Rs 7000 crore (Rs 70 billion), it will be another landmark financial deal for Indian cricket,” a senior board official tracking the e-auction for the next BCCI media rights cycle told PTI on Wednesday.
Well, SportzPower has definitive information on the threshold figure set by at least one of the three eligible bidders – Star India, Sony Pictures Network India (SPN) and Reliance Jio – in the running for Global Consolidated Rights (GCR) category. It is Rs 65 billion ($1 billion), a top industry source has confirmed to this website.
That being the case, the question now is only how much above the Rs 65 billion benchmark the final number will close. If it was a two-horse race between Star and Sony, this website would be betting on Rs67-68 billion being the absolute upper limit walk-away number for both networks. With Reliance Jio also in the frame, the magical Rs 70 billion figure the said BCCI official alluded to could well be reached.
To again quote the same BCCI official telling PTI Wednesday: “This is the power of Indian cricket. It can resist any kind of negativity, administrative mess and even bigger controversies. The potential bidders know that in India, only one sport can give you proper return on investment. We don’t know who has the top bid but the pattern indicates that all three are still in the race if you see the bid amounts.”
The BCCI brass is expecting that a clear winner will emerge by late afternoon on Thursday.
And that winner will basically have to do some serious number crunching on what is the loss burden that will have to be borne at the end of five years. As per Sportzpower’s calculations, Rs 50 billion was the no profit, no loss threshold in terms of value extraction potential from these rights. Anything above that is loss leader territory, which the bidding is already well into. A minimum of Rs 1.5 billion over five years is the loss that the winning bidder will have to account for, is how things stand at present.
That is of course a matter for the winning bidder’s bean counters to figure through.
For the record, some facts
At the end of the e-auction process on Day 2, the last bid placed was for Rs 60.325 billion – this amounts to a per match value of Rs 588.54 million for the 102-game BCCI FTP over the next five years (2018-2023).
As of end-Wednesday’s “trading” therefore, the per match value had surged well past what was assumed to be an unassailable bench mark of Rs 540 million per match value set by Star last year in its winning bid for the IPL rights.
As things stand, Wednesday’s closing bid marks a 36.87 per cent jump over the price that incumbent rights holder Star India was paying the BCCI in per match terms for the 2012-18 cycle (Rs 38.51 billion or Rs 430 million per match).
Three companies – Star India, Sony Pictures Network India (SPN) and Reliance Jio – are currently embroiled in the intense bidding war for the media rights to 102 international matches across 190 days in the 2018-23 cycle.
The bidding started on April 3 and was carried forward to Wednesday with Tuesday’s bid value in the CGR category at Rs 44.42 billion (Rs 4442 crores, approximately $680 million).
Star India owns Indian cricket’s most coveted media property IPL having paid a record Rs 163.475 billion for a consolidated global bid that includes TV as well as digital rights.
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