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IPL media rights auction sees frenzied bidding on Day 1

Ayushi Kar | | Updated on: Jun 12, 2022
For the first time rights for digital streaming could be sold at a price that is equal to TV broadcasting rights.

For the first time rights for digital streaming could be sold at a price that is equal to TV broadcasting rights. | Photo Credit: 4825

Top bid for TV broadcasting rights stood at ₹23,370 crore while the digital streaming rises to ₹19,680 crore; BCCI to get over ₹105 crore per match compared to ₹54.5 crore previously

The first day of the auction for the media rights of the Indian Premier League saw intense bidding with the overall bid amount crossing ₹ 43,000-crore mark.

The top bid for TV broadcasting rights stood at ₹23,370 crore, up 16.3 per cent from the reserve price, while the rights for digital streaming went up by 45 per cent to ₹19,680 crore. This is more than double the value compared to the previous auction when Star India bagged the rights for nearly ₹17,000 crore for a five-year period that ended with this year’s IPL.

Auction continues

The auction will continue on Monday but even if the bids close at current levels the Board of Control for Cricket in India, will get over ₹105 crore per match compared to ₹54.5 crore previously. 

Analysts predict that for the first time rights for digital streaming could be sold at a price that is equal to TV broadcasting rights.

Karan Taurani of Elara Capital told BusinessLine, “The number is exactly in line with our estimate, wherein we expected a 30-35 per cent premium over the base price for TV and an 80-85 per cent premium over the base price for digital.” 

Taurani added, “We believe per match cost basis, the digital segment will come at par with TV at best, and we do not see it moving beyond TV, as TV still has a lot of FMCG advertisers and digital despite strong growth has concerns on monetisation and subscription.” 

Bidding is expected to pick up the pace on the second day, and with no end date set by the BCCI, the bidding process could go on for a few days. Bidding on package C (a bouquet of 18 matches with no exclusive digital rights) and package D (world rights for TV and digital) can only start once bidding for TV and digital rights are concluded. Taurani predicts that these categories will also go at least 40-45 per cent over the base price. 

Seven participants

There are likely seven participants in the e-auction, however, it is likely to be a four-way match between Mukesh Ambani-backed Viacom 18, Sony, Zee, and the incumbent Disney Star. 

BCCI has not disclosed which of the seven participants are in the lead at the moment. It is also not known, whether the same broadcaster is leading both the television and digital categories. However, if the same broadcaster bags both rights, they will be paying a minimum of ₹105 crore per match.

“This could be slightly overpriced,” said brand expert Santosh N, Managing Partner at D & P Advisory. He further added, “broadcasters make ₹3,000 crore in ad revenue per season, and even if you further add the intangible revenue of having IPL such as increased reach, market share supremacy, you can expect yearly revenue to be around ₹6,000 crore. At this price point, the cost of acquiring the sports property will touch a yearly sum of ₹8,000 crore, and it might be hard to recover that cost as a broadcaster.”

Santosh further added that new-age businesses such as digital broadcasting could warrant growth over the cost at the moment, and it could be the reason why broadcasters are willing to spend the big bucks. 

Overall, the trends on the first day suggest that the premier cricketing league will fetch a hefty sum, even as declining IPL viewership and withdrawal of Amazon from the bidding race indicated otherwise.

Published on June 12, 2022
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