The Indian Premier League (IPL) Media Rights sales tussle for the 2023-2027 will unfold in an e-auction method which was due to start at 11am on Sunday. Over the years, TV rights has been the biggest driver of IPL’s revenue stream. With viewership shift from TV to digital expected to happen only gradually in a large country like India, TV is expected to beat digital returns for another five years.
The bidding will be done across four categories—TV, digital, non-exclusive digital and Rest of the World. The media rights auction of a T20 league could be played out like a Test match. It’s going to be a long drawn out process. Bids will be conducted per match basis, not for the entire season or the entire five-year cycle. The minimum bid increment (MBI) value is Rs 50 lakh and to maintain complete transparency, all the parties concerned, including the BCCI, will not get to see the bids until the highest bids are flashed on the monitor.
TV RIGHTS
It is the first on the menu. Bidding will start at 11 am on Sunday. Over the years, TV rights has been the biggest driver of IPL’s revenue stream. With viewership shift from TV to digital expected to happen only gradually in a large country like India, TV is expected to beat digital returns for another five years.
The base price in this category is ₹49 crore/per match—that is ₹18,130 crore/five years. Once the first bid is made—a minimum ₹50 lakh over the base value—the next bidder gets up to 30 minutes to make a counter bid. Though ₹50 lakh may not sound much, it still means financial obligation to the tune of ₹185 crore, over 370 matches in the cycle.
Four-pack offerings
There are four packages – A, B, C and D. Package A is the TV rights for the Indian subcontinent only. Package B deals with the digital rights for the Indian subcontinent. Package C has a special bouquet of matches, with non-exclusive digital rights for the Indian subcontinent. This includes tournament openers and playoffs. At the moment, the number is 18, with a total of 74 games to be played in the tournament. In the future, if the total number of matches increases, the number of games in Package C will rise in a ratio of two for every 10 games. For example, if the total number of matches rises to 84, Package C will offer a bouquet of 10 games. This has been introduced to attract companies who are willing to get a small share of the cricket pie, fetching the cricket board big money in the process. Package D contains the world rights for TV and digital.
The business around it
Package A and B will be rolled out upfront. The bidding commences from the base price of Rs 49 crore per game for the TV rights and Rs 33 crore per game for the digital rights. The competing parties will place their bids through an online portal. Once a bid is placed, the auctioneer will wait for 30 minutes for the next bid to come in. With the MIB being Rs 50 lakh, the auction will go on until the bids are exhausted.
Digital action
Digital viewership’s fast-growing popularity is a reason why the BCCI has done away with composite bids and gone for separate bidding this term. Currently 30 per cent of Hotstar’s global revenue comes from India, with the IPL being the determining factor. Reliance’s Jio, meanwhile, has grown to be the country’s largest telecommunications company.
With digital viewing expected to be the name of the game in the near future, an intense battle between Disney-Star, Viacom18/Reliance, Sony and Zee could be on the cards. Five years ago, Facebook was the highest bidder in the digital rights segment, with a bid of Rs 3,900 crore, which amounted to around Rs 54.6 crore per game. Star India won the media rights with a composite bid of Rs 16,347.5 crore.
This time, with Rs 33 crore being the base price per game for the digital rights in the subcontinent only, the BCCI is expecting an unprecedented windfall from this segment. The fourth edition of the Indian Over-the-Top (OTT) Platforms Report 2021 (post-pandemic consumption), published by MICA Ahmedabad this year showed that digital subscriptions grew by 49 per cent. Consumption was highest among viewers aged 15-34; an age-group that caters to the IPL’s die-hard fan base.
Financial funda
Given that the base prices per game in the four packages are Rs 49 crore, Rs 33 crore, Rs 11 crore and Rs 3 crore respectively, and 74 matches are to be played in a season, increasing the bid by Rs 50 lakh, a participant increases its bid value by Rs 37 crore extra (74 X 50 lakh) per season and five times more for the entire five-year package.
Financial obligation grows staggeringly in hundreds of crores with every MBI of Rs 50 lakh.
Enjoy the difference
At the e-auction, a company can separately put in bids for all the packages. The winner of Package A will get an automatic choice to offer five per cent more than the highest bid for Package B. Similarly, the winner of Package B will have the leeway to offer five per cent more than the highest bids in Package C and D. This, though, will have to be done within a stipulated time.
Transparency promised
Circa 2017 saw closed-bidding. This time, the names of the bidders will not be revealed to ensure that rivals don’t get any inkling and inflate the whole process. Even the BCCI officials won’t get to see the bids until the highest bids across categories are shown live on the screen. The BCCI has roped in Mjunction to provide the platform for the e-auction.
Big players in fray
Seven companies have submitted their technical bids, but watch out for Disney-Star, the incumbent rights holder, and Viacom18/Reliance. Star under Uday Shankar had paid 158 per cent more than the previous rights cycle to acquire the IPL media rights five years ago. Five years down the line, Shankar is on Viacom18/Reliance’s side, while Sony – it held the rights from 2008 to 2017 – and Zee could be the other two main players.
Package bonanza
Package A
TV rights for the Indian subcontinent
Base price Rs 49 crore per game
Package B
Digital rights for the Indian subcontinent
Base price Rs 33 crore per game
Package C
A bouquet of 18 matches with non-exclusive digital rights
Base price Rs 11 crore per game
World rights for TV and digital – Base price Rs 3 crore
Total base price all combined is set at Rs 32,890 crore
