Ahead of the 2023 Indian Premier League (IPL), the Board of Control for Cricket in India (BCCI) sold the IPL media rights for a whopping sum of over 5 billion USD for a five-year period. While Disney Star retained the television rights for the Indian subcontinent market in a deal worth $3.02 billion, the Reliance-backed Viacom18 splurged $3.05 billion for digital rights. That is apart from spending a huge amount of money for other rights to foreign markets, in which Times Internet Ltd. was also a participant.
If anyone would have guessed a few years ago that an IPL season would be worth more than a billion dollars in media revenue alone, international cricket would already have its expiry date written all over it.
It is crazy and sometimes downright unbelievable, but on Wednesday (April 12), when Chennai Super Kings needed 42 runs off the last two overs, Jio Cinema clocked a 2.2 Cr peak audience who were catching a glimpse online. In a country with less than 50% internet penetration, having over 220 Lakh people glued to their digital screens treads a tale for the future.
These numbers need to be kept in mind because perspective sometimes becomes an anachronism in the standard set by the modern-day world. It is uncompromising to keep catering to the beast, which will grow further in 2023.
“Indian Adex (advertisement expenditure) will be the fastest growing globally at 15.5%, supported by robust macroeconomic conditions. Digital, at 56% of all advertising spends and growing at 20% over last year, is driving the growth of Adex,” said Ashwin Padmanabhan, President — Investments, Trading and Partnerships, GroupM India.
To put things in context, it is imperative that we turn the page back to 1991 when the PV Narasimha Rao government led the economic reforms in the country. The liberalization model opened India to private investments and foreign entities, bringing down the value of state broadcaster, Doordarshan.
Earlier, it was BCCI who were paying Doordarshan to showcase their matches, but when Star TV was awarded the TV rights for the 1993 Hero Cup, it was uplinked from Hong Kong. Doordarshan moved to the Supreme Court, citing the violation of the Indian Telegraph Act of 1885, claiming the broadcast right was public property and uplinking from a foreign land would be causing issues to national security.
The story that transpired then went on to shape the next 30 years of cricket content consumption in the country. Of course, DD lost the verdict in Delhi High Court. They could never recover from it, and the growth of cable television buried the state broadcaster under the pump.
Surely, the world has moved on too fast, and the capitalistic village we live in has created an environment of growth where profit-making is no longer the first order of business. Look at the 21st Century Fox and Disney Plus, for example. The two media behemoths have owned Star India’s business separately in the last 10 years but struggled to break-even regarding sporting content. That, however, didn’t tamper them out to commit over three billion dollars for five years of Indian Premier League, only for Television.
But is there a sense of normalcy to it? Well, as per the 2023 GroupM media report, the spending on-ground, team, and franchise has risen by INR 3021 Cr in 2022, which is a whopping 105% growth from 2021, making the total sponsorship spending INR 5907 Cr.
To formulate an idea, Slice, a fintech platform, paid INR 100 Crore to Mumbai Indians for a three-year primary sponsorship deal. At the same time, Royal Challengers Bangalore signed Qatar Airways as its title sponsor for three years in a INR 75 crore deal- the second-largest deal in the history of IPL sponsorships. It is proportionately taking the price of the broadcasting fees, and in turn, Adex spends forward; hence broadcasters can hope for a direct surge in partnerships once the existing deals which come to an end later this year.
It has further bolstered the conglomerates to commit thousands of crores to the IPL, making it a recession-proof entity. In 2008, Mumbai was the most expensive team, costing over US$ 111.9 million, with dollar exchange value to INR being set at 43.51. But with the rising inflation the dollar value has almost doubled, yet RP-Sanjeev Goenka group dished out close to a billion dollar to own the Lucknow franchise. It has only become possible because the franchise were assured of having a huge pie from the BCCI media rights pool.
While one could argue that the stable economy and the passive-aggressive consumption ideologies of the current establishment have helped the cause, the brand value of the IPL has been the biggest factor. It is abundantly clear over the years that no other sports come close to the value that IPL could generate - even if you put it in a contrast to the Indian cricket team’s international calendar - and hence, a dichotomic change is nothing but expected order.
That’s the might of the IPL - a behemoth that has no brake and defies all sorts of logic. The hope is that someday, it would match India’s insurmountable appetite for cricket with advertisement revenue, and hence, its business model will have some semblance of logic. Till then, it is time to delve into the growth story and celebrate the incredible spectacle called - Indian Premier League.