Market price

‘Good market price’ as BCCI targets windfall from IPL media rights | locust

The past is the benchmark for price estimates for big ticket auctions, and none will be more important in Indian sport or world cricket than the June 12 electronic auction for Premier media rights. Indian League (IPL) (2023-27). This is why BCCI has ensured that when the auctions begin, it will have already secured double what it won in the last round of rights. 16,347.50 crores.

Although the collective reserve price is set at approximately 33,000 crore, bidding is sure to go much higher in each of the four categories on offer. “I have no doubt that with this process there will not only be revenue maximization, but also value maximization,” BCCI Secretary Jay Shah said on Tuesday.

Will income from IPL rights affect 50,000 crore this time? Will digital rights bring in more than linear TV revenue? Keeping digital (India) and television (India) in separate categories could speed up this process. The reserve price of TV rights is not significantly higher than that of digital. If the last auction had these rules, Sony as the highest bidder in the TV rights category ( 11,050 crore) and Facebook with the highest digital bid ( 3,900 crore) would have been the winners.

It can be argued that Star’s current beneficiaries would then have used a different strategy. They didn’t bid aggressively in the “digital-only” and “TV-only” categories last time around. Star’s winning consolidated bid (India TV + Digital India + Rest of the World) was only 3.34% higher than the combined value of the highest bid for separate categories.

“What we are looking for is the right market price for each vertical sector,” a BCCI official said. “There are some players who may only want digital. Some may only want linear. There are those who may want both. In a consolidated auction, you don’t get the true value of each section.”

DIGITAL FOCUS

While the big TV players are few – Disney Star, Sony-Zee and Reliance Viacom 18 (which will soon launch a sports channel) – BCCI wants the digital offering to take off, aware that digital penetration in India could accelerate with the imminent deployment of 5G. In the absence of a consolidated offering, standalone digital giants like Amazon Prime, Facebook and Google could help maximize value in the category. Facebook and Google, being minority stakeholders in Reliance Jio, add intrigue to what the post-auction picture might be. Disney Star and Sony Liv’s Hotstar bidding strategy will be decided collectively with their television approach.

An additional non-exclusive bundle of 18 selected IPL matches, modeled after Premier League football, is also being sold. BCCI insiders say it’s for smaller parties (read FanCode) who want to join the race. Amazon, Facebook, Google and others could also use this route to enter the Indian cricket market.

Such a move could devalue digital rights as exclusivity will be affected. But unlike the Premier League where live matches are shared by Sky Sports, BT and Amazon Prime – they have a separate non-live (BBC) highlights package – the IPL tender allows a media company to bid for this 18-game package as well should he be keen to retain exclusivity. The fourth package offered is the “rest of the world” category.

In the absence of authorized consortia, Sony and Zee cannot bid together, but they can use their collective post-bidding resources once their merger is complete.

It is learned that the bidding document states that the current bid of 74 matches could go up to 94 if a suitable playing window in the cricket schedule is made available.


  • ABOUT THE AUTHOR

    Rasesh Mandani loves straight runs. He has covered cricket, governance and the business side of the sport for nearly two decades. He writes and publishes video blogs for HT.
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