As the 15th IPL season winds into the play-offs and then the finals, the BCCI has its sights on the big auctions for the next 5 years of cricket rights slated for June 12. IPL over the years has come to spell limited-over-unlimited-excitement, celebrity power and discovery of new talents. More than the glamour, IPL has become synonymous with a money-making machine as no other sport format has seen.
Will it sustain, or is it showing signs of petering out? Five years ago, Star India had picked up composite rights for broadcasting and digital streaming of IPL matches for 2018-22, for Rs 16,347 cr. BCCI for the new 2023-27 tender has ended composite bidding and will cut and splice the rights into many parts to attempt to raise Rs 45,000-50,000 cr.
Sample the kind of money riding on the IPL: Tata Group replaced Vivo as ‘title sponsors’ and are paying BCCI Rs 670 cr over 2 years for the ‘Tata-IPL’ tag. As official sponsors of IPL 2022, the brands – Dream11, Unacademy, Rupay, CRED, Upstox and Tata Safari – will collectively cough up Rs 210 cr as fee. As the ‘strategic time-out’ sponsor, CEAT pays Rs 30 cr, while the cost of being the ‘Umpire sponsor’ for Paytm is Rs 28 cr. Last auctions, in 2017, BCCI realised composite bidding for ‘rights’ was a losing proposition. So this year, bidding will be segment-wise. For telecast rights, the base price is fixed at Rs 18,130 cr for 74 matches – or nearly Rs 90 cr per match, double the last auction price.
The base prices for digital rights is pegged at Rs 12,200 cr, a gamble considering online ad rates are still low. Besides these, BCCI is selling a basket of 18 games separately, as well as overseas rights, and hoping to raise another Rs 3,000 cr. In the fray for the June 12 e-auctions are the regular TV networks – Disney Star, Sony and Zee. Joining them this year are RIL, Amazon, Meta and Apple.
Do bidders make money?
Do those buying the telecast and digital rights for IPL make money? Difficult to say, as there is no monitoring of revenue. However, the advertising grapevine says Star generated an annual average ad sales of Rs 2,500 – Rs 3,000 cr with subscription revenue bringing in perhaps Rs 500-Rs 600 cr a year. Expenses include Rs 16,000 cr for the rights, and production and marketing costs another Rs 5,000-Rs 6,000 cr over 5 years. A simple back-of-the envelope calculation shows the high prices paid for the rights makes it an impossible business.
In the pricing game, BCCI knows the big players are not in it for short-term profits. There is a long-term strategy to ‘capture’ the viewership ecosystem, and what is the better route than live cricket. For Star, which launched nearly 6 sports channels, live content like kabaddi and cricket is essential to keep them populated. Sony strategy, after exhausting entertainment gambits like KBC, also veered around to the same gameplan.
Declining viewership
This IPL season faced the shocker of falling viewership in the first 4 weeks, with each week showing 30-35% fall in viewership compared to last year’s figures. BARC data showed some improvement midway, but advertisers are believed to have queued up outside Disney Star offices to demand their money back. Various reasons are cited for the falling numbers. The 2 big teams, Mumbai Indians and Chennai SK, who have loyal fan following, have performed badly. Big draws like Virat Kohli, Dhoni and Rahul Sharma have fizzled out.
TAM Media Research said 84 new brands joined the IPL bandwagon – new brands like Meesho, Spotify and Fogg jostling for presence – even as old advertisers like Maruti have gone off. IPL chairman Brijesh Patel is struggling to explain the fall in numbers. After a peak reach of 350 mn of an audience universe of 836 mn in 2020, it has been downhill since. Cricket pundits say much of unaccounted eyeballs have migrated to OTT platforms. Advertisers are still gung-ho and say there is little else that can make the type of splash that IPLgives to an ad campaign. The limited over format avoids clutter and doesn’t permit the viewer to drift away. If only someone can persuade BCCI take a relook at the high price of IPL rights and curb its greed.
The money-making machine for BCCI
In the pricing game, BCCI knows big players are not in it for just short-term profits. There is a long-term strategy to ‘capture’ the viewership ecosystem, and what better route than live cricket!