After two days of intense bidding, the bidding for media rights for the Indian Premier League has racked up a value of ₹46,700 crore, almost three times Disney Star’s winning bid in 2017. While Mukesh Ambani-backed Viacom18 has won the rights for online streaming of the cricket league, there is no clarity on whether Disney Star has retained its hold over TV broadcasting rights.

The Board of Cricket Control of India is yet to formally announce the winners, but sources said Viacom18 emerged as the top bidder for digital rights at ₹20,500 crore. The top bid for the television rights stood at ₹23,575 crore, but there is no confirmation on who has bagged it .Star had acquired both TV and digital rights for ₹16,347 crore during the previous auction in 2017. In comparison, BCCI will get a cumulative sum of ₹44,075 crore for Viacom18 and Disney Star.

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Fight for exclusive digital rights

The overall bid amount could still go up as the bidding for the non-exclusive digital rights to stream 18 important matches in the Premier League is still ongoing. The top bid for this segment stood at ₹1,700 crore. So far, the premier cricketing league has racked up a value of ₹46,700 crore, almost three times Disney Star’s winning bid in 2017. The total bid amount could touch ₹50,000 crore as Viacom18 is likely to put up a fight to retain exclusive digital rights, according to experts.

The broadcasting rights for the rest of the world is still to be auctioned. Thus, the e-auction will continue, at least for an additional day. The BCCI will make a formal announcement about the winner only after the four packages are sold. At the end of the second day, the league had a per-match price of ₹126 crore. Reports also suggest that Viacom has bagged the rest of the world broadcasting rights for Australia and European territories. 

The reigning broadcaster, Disney Star, can partially credit its rise in the media and entertainment to the IPL. Thus, the partial switching of broadcasting rights will overhaul the competitive landscape of the media and entertainment spaces and bring new players to the forefront. Santosh N, Managing Partner at D&P Advisory explains, “The IPL was a major reason behind Hotstar gaining substantial subscribers in 2018. Right now, Hotstar is one of the top three OTT platforms and is the only homegrown OTT competitive with global giants such as Netflix and Amazon. If Reliance has won the digital rights, they now have the content to bolster subscribers and will certainly put in the requisite investments to make their platform (Voot) comparable to the top player.”

Santosh added that the splitting of broadcasting rights between two entities, which is happening for the first time, is also going to benefit the viewers. Both broadcasters will have to innovate with their IPL programming to grab viewership. 

According to the analysis by Karan Taurani of Elara Capital, the value of television rights has moved up two times in comparison to the previous cycle. “Digital rights, on the other hand, are likely to grow 5.5 times (if non-exclusive rights are counted as well),” Taurani added.

“We expect break-even to happen only in the third year for both digital and TV rights. TV gross profit margin will peak at 12 per cent in the fifth year, whereas digital gross margin will reach 35 per cent in the fifth year,” Taurani said.