CHENNAI: Even though Amazon has pulled out of the race for IPL media rights, market analysts are predicting a heavy windfall for the Board of Control for Cricket in India. According to estimates, the BCCI could get richer anywhere between Rs 40,000 crore to Rs 50,000 crore as heavyweights Disney Star, Viacom18, Sony, and Zee are set to battle it out for the IPL media rights for the period 2023-2027.
From the time Amazon picked up the bid document, there have been huge expectations about how India’s sports broadcasting landscape is going to change. However, two days ahead of the e-auction, sources familiar with the development revealed that Amazon Inc has decided not to enter the fray. Similarly, Google which was expected to make an offer for the digital rights through YouTube is yet to submit the bid and it is not clear whether they will take part in the e-auction scheduled to begin on Sunday and could possibly go on till the next day in Mumbai.
With two of the global giants out, the battle will be fought by familiar rivals. Walt Disney, which currently holds the overall media rights, is expected to face tough competition from Viacom18 JV, which includes Uday Shankar. In 2017, Shankar was with Star India and went aggressively at the media rights auction as the latter acquired the rights for around Rs 16,000 crore. However, with no consolidated bid around and e-auction in play, the open competition could spice up the auction.
There are four categories up for grabs Package A for television, Package B for digital (sub-continent), Package C for non-exclusive rights (18-22 matches that fall on the weekend and the play-off and final) and Package D overseas.
Although it is an e-auction and bidders would be able to see what the other party has offered, they won’t be able to know the name of the bidder. This is done to ensure one party doesn’t raise the bid unfairly. While the presence of OTT platforms and the interest shown by the likes of FanCode, Dream11, FunAsia, Times Internet and Sky Sports, the focus is bound to be firmly on Package B. Despite it, Package A still remains the primary one.
Even though Hotstar witnessed heavy traffic for the IPL, analysts point out that in Tier II and Tier III cities, where the majority of the population comes from, television still remains the primary medium. “OTT is the next big thing, but if you look at it, in India linear broadcasting is still critical. When both options (satellite and OTT) are there, people would still go for the television because of much better reception as you are not relying on the internet unless there is bad weather and you are watching it on a 30-inch screen. At least for the next five years, the linear broadcast would have decent numbers,” said Santosh N, Managing Partner, D and P Advisory, who has been studying brand IPL for years.
Although each party has to bid separately for each category, the winners in each category do get an advantage as the BCCI has given them the provision to match the winning bids in other packages. This means a party could end up with Package A, B and C, provided they match the highest bid. While Amazon was expected to make the bidding fierce as analysts expected them to go big for Package B and C, their dropout makes it even more interesting as all the main bidders have their own OTT platforms.
The dropout also opens the door for them to hold a monopoly-like Star did in 2017. “Advertisement revenue is largely driven by linear medium (TV) and advertisers also believe it is critical. At least for this cycle, Package A will drive the price significantly. Similarly, we expect the winner of Package B to go all out for Package C too because by losing out on key matches, they are bound to lose ad revenue. Package C is where the cream of the matches is there,” Santosh added.