How the IPL Media Rights Auction indicates a new era for sports broadcasting in India

IPL Media Rights
IPL Media Rights

IPL Media Rights: There were some absolutely mind-blowing sums during the IPL Media Rights Auction (TV & Digital).

IPL Media Rights: There are so many similarities between moths drawn to light and India’s love of cricket that just a little bit of evidence from the last three days will be enough to prove this link. Since the e-auction for the IPL Media Rights for the next five-year cycle (both TV and digital) started, sports fans and marketing experts have gathered on different social platforms to add to the crazy buzz that follows cricket in India like a magnet. The fact that the buzz is so high this time is also not a surprise, since the country has never spent so much money on Media Rights before. The rising numbers we’ve seen in the past few days have given us a lot to think about when it comes to the future of IPL and its broadcast.

Aakash Chopra tweeted

IPL Media Rights: “IPL becomes the second most lucrative sporting property in the world. Wow

That’s when India is a ‘developing country’ and is apparently, not a ‘sporting nation’ either. The potential of our nation is limitless. Extremely proud Jai Hind”.

Let’s examine the chain of events that led up to the e-auction:

IPL Media Rights: Most global leagues, like the National Football League (NFL), the English Premier League (EPL), the Champions League, etc., offer TV and digital rights packages that include both. This time, IPL kept up with the trend and went ahead with 4 different packages that helped build up to the mega auction.

Also, there is a lot of money in sports broadcasting. For comparison, the NFL just signed a new 11-year media rights deal that will last until 2033 and could be worth over $100 billion. Amazon will pay about $1 billion a year, ViacomCBS, Fox Corporation, and Comcast will each pay more than $2 billion a year, and The Walt Disney Company, which owns ESPN and ABC, will pay around $2.7 billion a year.  Even before the e-auctions for the IPL Media Rights were set to start, it was thought that the highest bids would be between 50 CR and 60 CR. In the end, this became less of a problem after Amazon left. The new estimate was 45–50k CR, which is exactly what happened.

The packages contained what, exactly?

IPL Media Rights: Star India bought global media rights for INR 16,347.50 billion in 2017. Facebook’s 3900 crores proposal raised eyebrows. The BCCI separated the IPL’s TV and Digital Rights this year, offering bidders four packages: (A) India sub-continent television, (B) India sub-continent digital, (C) India digital non-exclusive special package, and (D) Rest of the globe. The winner of Package B would never want to let go of Package C to avoid revenue leakage and maintain exclusivity, as both are connected digitally. Package C saw a lot of rivalry with other players keen to bag the rights and spoil the party for the winner of Package B and also create some digital presence through these 18 titles, given Star’s digital responsibilities (Hotstar) to their US headquarters.

Viacom paid a 100 percent premium for Package C to ensure no revenue leakage and exclusivity. Package C cost INR 3,273 cr, or 33.24 cr each match for 98 matches. Disney Star, with a ready infrastructure of numerous sports channels, including vernaculars, preferred Package A. Viacom, which still broadcasts sports, focused on digital because to its greater infrastructure. Jio bid for digital rights before and was third after Facebook and Airtel.

Broadcasting’s ROI and the Effects on the Industry

IPL Media Rights: TV ad rates will likely rise. Star raised 10-second ad rates throughout the last 5 years. Vernacular feeds helped them increase inventory and income. Star earned 4000cr. in ad income last year, and with more games and higher prices, they’ll earn more and make a profit. Star would have had its 5-year balance sheet and bid accordingly. Digitally, it’s a bigger play. Cricket’s the bait. The platform needs subscribers, data, and more monetization. Digital Rights gained a 50% premium above its initial price of 33 crores, illustrating the digital boom that has swept the globe. Digital Rights was just 13% less than TV Rights, but when Package C is included, it’s more.

Effects on the Teams and the Fans

IPL Media Rights: When the IPL makes this much money, the team’s brand value goes up because they get a fair share of the Media Rights Revenues. So, the Player Purse would also go up in the same way, which means that players will get more money. The question of whether this kind of money would make them want to focus more on the IPL than on other leagues or even on international duty is one for another day.

Amul.coop tweeted

#Amul Topical: “The buying of media rights for IPL!”

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