A large group of players like tech giants and broadcasting majors will pull it out for a multi-crore media rights auction on June 12.
A large group of players like tech giants and broadcasting majors will pull it out for a multi-crore media rights auction on June 12.
The Underdogs had a field day in the Indian Premier League (IPL) 15, garnering a record sponsorship of over ₹1,000 crore, and a new title sponsor. Bye. New Franchise Gujarat Titans Beating all odds to win the tournament, even fictional franchises Mumbai Indians and Chennai Super Kings stunned fans with their poor performances.
Will the next IPL battle – the media rights auction on June 12 – cause similar surprises? A lot depends on these auctions, which are said to be worth around ₹50,000 crore, for the 10-odd companies that have received the bidding documents, especially the current Disney star.
Media consultants believe that the combined rights (global TV rights plus digital) could go anywhere between ₹40,000 crore and ₹50,000 crore – Star picked it up in 2018 for ₹16,347.50 crore.
Although the dwindling viewership of the Tata IPL – a 33% drop in TV’s eyes – and the discounted advertising rates have raised questions about the high cost of media rights, experts believe this is a reasonable increase.
asking price
A senior media analyst justifies the increase, pointing out that the previous winning bid five years ago was for 60 matches. There are now 74 matches as well as an increase in inflation from year to year. Also he says that the rights of the digital audience were indexed earlier as well.
In addition, broadcasters can use IPL rights to create many other programming and gain viewership. As Sandeep Goel, head of advertising firm Rediffusion argues, “The dominance of media companies and groups is in many ways determined by whether they have IPL rights or not. For example, the years in which Star India held the rights. were, they took away all the competitors by many miles.”
Shailesh Kapoor, founder and CEO of Ormax Media, says no other content can match the way IPL is viewed – back in the day when you still had one mother-in-law Or a KBC. Also, as he points out, IPL is the engine that drives digital subscriptions. For Hotstar, India reportedly contributes 30% of its global revenue. Unlike Amazon and Netflix, India earns barely five to 10% of its revenue. IPL is the differentiating factor.
Even for franchise owners, IPL relies heavily on media rights as a major part of their revenue rests on it. Dabur’s Mohit Burman, who co-owns the Punjab Kings franchise, points out that the owners of the new Lucknow and Gujarat teams paid huge sums of money to buy these franchises (₹7,090 crore and ₹5,625 crore), they must Factor in upcoming media rights.
But Mr Burman gives a caveat that the Board of Control for Cricket in India (BCCI) should not cost more than media rights. “It should not happen that media rights are bought by companies at such high prices that it becomes ineffective for advertisers and it becomes difficult for media companies to recover their money. ,
drop in viewership
While IPL 15 has broken all the records in terms of sponsorship, the bearish trend has affected the advertising rates. Media planners believe that it will be difficult to attract advertisements in the next edition. The drop in viewership in IPL 15 will also not help. There are concerns that the 10 team format is causing fatigue.
Vineet Karnik, Head, Sports, Esports & Entertainment, GroupM South Asia, says the lack of team loyalty played a part in the decline. “We had a big auction and so key players moved teams and it would take a season to build team loyalty, especially for the two new teams.”
Mr. Goyal feels that the IPL needs a serious rethink in terms of format, talent and innovations. Mr Burman has one suggestion to take the league to a global level to expand its audience base.
Who can get the rights?
Ultimately, according to experts, authority will go to those who are most desperate. And these appear to be a combination of the star and the new Uday Shankar-Viacom Sports 18.
Mr. Goel feels that for Star, Zee or Sony, if they get the rights to cricket, it will have far-reaching implications for their network of channels, including general entertainment. “There is cross pollination of benefits in the network which is invaluable.”
However, this year, the BCCI has thrown a number of twisted balls into its bidding documents – such as a controversial special non-exclusive package (Bundle D) that allows those who cannot win media rights to certain matches digitally . This could open a window for pure digital players like Amazon and Apple.
This game is on!