IPL's Golden Hour: Whose win is it anyway?

The e-auction for the Indian Premier League 2023-27 has come to an end, with Star India winning the TV rights deal for INR 23,575 Cr and Viacom18 winning the digital rights for a consolidated figure of INR 23,758 crore, helping make BCCI a combined INR 48,390 crore revenue from broadcasting alone. 

Make no mistake, that is a massive figure in Indian cricket. The IPL has always been the biggest brand in the sport, but the sudden driver in the auction has ensured that the BCCI has a product to run the sport the way they wish it. However what's not ideal is this can have a potential impact on how the world cricket functions.

Let’s debrief the numbers for a clearer understanding.

While Star Sports have retained their TV deal with a knock-out figure of INR 23,575 Cr for five years, the consolidated conglomerate of Uday Shankar, James Murdoch, and Mukesh Ambani - Viacom18-Reliance - have walked away with the digital as well as the non-exclusive digital package, for INR 20,500 Cr and INR 3,257 crore respectively. Viacom18 winning the Package C bid, which has a 98-game non-exclusive package over five years, means they have now a hegemony for IPL’s digital space for the next half a decade. 

Why is it significant?

The digital rights will now generate Rs 58 crore per game on average. It has triumphed over TV rights, signaling a clear change in paradigm. The digital space had been the biggest driver of growth for Disney, and Viacom18 winning it for such a massive sum puts things into perspective. 

Reliance Jio was the biggest shifter in the industry when they launched their flagship Telecom product. Hence, it was understandable why they went big to garner the exclusive rights to the Digital space, even after launching Sports18 - a TV channel a few months back. 

While the financial muscle of Reliance was understandable, the coup was to the credit of two men who have had a significant impact on the Indian cricket ecosystem for the longest time. Uday Shankar and James Murdoch, during their time at 21st Century Fox, helped Star have a complete monopoly in Indian cricket. When both invested in Viacom18 under the Bodhi Tree banner, it was seen more from the perspective of strategic partners than Venture investments. Now, for both parties, it has clearly worked. 

Does that mean Star is a loser in the process?

It is Yes and No. Let me explain why.

In 2017, when Star put up a bid of 15,819 crore, the sum total of all the highest bids put together, in their global bids counter to take home the lucrative rights entirely to bolster their Indian cricket coverage universe, they were right at the centre of a changing user behaviour. It was that time of the millennium when smartphones were truly democratized and internet consumption was at an all-time high. 

It helped them to gain a market share of 18 percent in the advertising video-on-demand (AVOD) segment and a 26.3 percent market share in the subscription video-on-demand (SVOD) space. Hence, they were extremely keen on securing the digital rights, hence the Hotstar audience could have been retained. Letting that go would hurt but they would be safe in the business of orthodox broadcasting on TV. 

But one thing is for sure - a lot more advertisement. Probably a bit bigger strategic time-out, and some more innovative spaces to cater to the sponsors as well. Fans will have to deal with that on TV. But that is a value you pay to watch the biggest cricket league in the world.

The Overseas segment

With England and Australia players being a recurring theme of IPL, it was expected that the likes of Sky Sports and Fox Sports would bid for the non-sub-continent rights. Viacom-Reliance secured the rights across three global regions - Australia + New Zealand, the UK and South Africa whereas Times Internet won the rights for the Middle East and the USA for a combined sum of 463 Crore. 

The ROI Factor?

For the investors, the Return on Investment has never been a factor to be worried about. It is a recession-proof league that continues to grow among the veins of cricket fans around the world, and even though the expansion has caused some sort of burnout, the general public has never lapped out of the league. They love it and hence, the ROI would always be directly proportional. 

Hence, sit back, relax and enjoy the new phase of the IPL in whatever mode that suits you.