Ambani-Murdouch vs. Jeff Bezos – the heavyweight IPL media rights battle

0

On the pitch, the Gujarat Titans upset, upset the odds and ended up being the best team in the Indian Premier League this year. Now that the stage is set for the electronic auction of IPL media rights – linear and digital – on Sunday, it remains to be seen whether a newcomer rules the roost.

The auction pool has around ten participants, with some of the richest and most famous in the world competing against each other. The auction raises the possibility of a direct fight between Mukesh Ambani, representing Viacom18/Reliance and Jeff Bezos, president of Amazon, in particular for digital rights.

Bezos is the second richest person in the world. Ambani is at No. 9. Disney-Star, the incumbent media rights holder, will be there, while the presence of Apple and Google makes the bidding war interesting.

How intense could the bidding war be?

The best of Express Premium
Prime
Prime
Explained: How an Air India ticketing 'racket' unraveled due to...Prime
To facilitate spending: UPI-credit link, real estate loans from rural banksPrime

There’s a feeling that Disney-Star might be bidding aggressively to retain the media rights and it’s all about the numbers. Hotstar, the company’s digital platform, reportedly derives 30% of its global revenue from India, with IPL being the driving factor. For Amazon and Netflix, on the other hand, only 5-10% of their global revenue comes from India.

Here again, the Indian conglomerate Reliance and Viacom18 entered into a strategic partnership with Bodhi Tree, the latter investing $1.78 billion in the project. It is an investment platform run by Lupa Systems of media mogul James Murdoch and former Star India executive Uday Shankar. As Chairman and CEO of Star, Shankar had changed the entire landscape when he secured IPL media rights for his former company five years ago, paying four times the base price. From now on, he will be in the rival camp.

“James and Uday’s track records are second to none,” Mukesh Ambani, chairman and chief executive of Reliance Industries, said after the combination. With over 400 million customers, Reliance’s Jio is the country’s largest telecommunications company.

Bezos’ Amazon, meanwhile, broadcasts the English Premier League live, arguably the most popular football league in the world. He could also pull out all the stops to secure the digital media rights of the world’s most popular cricket league. Gaining an edge over global rival Netflix Inc. provides an added incentive.

What is the base price?

Five years ago, Star secured the IPL media rights for the 2018-2022 cycle for Rs 16,347 crore. This time, for the 2023-2027 cycle, BCCI has set the base price at Rs 32,890 crore. According to a senior BCCI official, the highest bid is expected to exceed Rs 45,000 crore. As one BCCI insider put it, the dynamics of auctions do not follow simple profit and loss logic. It’s about gaining market share dominance and knowing how much companies are willing to shell out.

Who selected the tender documents?

It is learned that Disney-Star, Sony, Zee, Viacom18/Reliance, Google, Amazon, Apple, Dream11, Sky Sports UK and SuperSport SA are among the parties to purchase the tender documents (ITT). Some of them, however, expressed their dissatisfaction with a sharp increase in the base price.

“This is a very aggressive reserve price and there needs to be a reality check, as IPL TV viewership has dropped over 34%, and at a time when rights are about to be renewed,” NP Singh, managing director and CEO of Sony Pictures Networks India, told The Economic Times last month.

Why is BCCI still so confident?

According to a BCCI official, IPL as a product is “unparalleled”. There is no other content that attracts eyeballs, which IPL gets. Chennai Super Kings general manager Kasi Viswanathan agreed. “This year, maybe, was an aberration in the sense that you still didn’t have home and away games. That was the reason for a drop in viewership.

“But if you look at the competitive cricket that is played in the IPL, everyone knows it’s the best T20 league in the world. And that’s probably why his media rights are in such high demand,” Viswanathan told The Indian Express.

How important are digital rights in the whole equation?

Unlike the last term, composite offers have been removed. A company can bid separately for all three tranches. Additionally, this time, BCCI has split the digital rights into two separate compartments – one for all matches, while the third compartment contains the non-exclusive rights for 18 matches each season, including the tournament opener and playoffs. . This can attract companies that want to get a small slice of the cricketing pie, bringing in a lot of money for the cricketing board.

How will an increase in the number of teams determine the bidding process?

For starters, the addition of two new teams increased the number of matches to 74 and contributed to the base price this quarter, nearly doubling the winning bid in 2017. But beyond hard numbers, the two new teams have brought new fans into the tournament. For example, the reigning champions Titans can play in front of 100,000 spectators, which gives them enough opportunities to develop a large fan base. It should also rapidly increase TV/online viewership.

Does the IPL have global appeal?

Last year Manchester United’s American owners, the Glazers, took part in the IPL franchise auction, as two new teams were brought into the fold. Not that the Glazers are big cricket fans, but they found the model of the IPL, which is quite similar to the NBA and Major League Baseball – a closed league with no promotion or relegation and guaranteed revenue from certain quarters – attractive.

NFL legend Larry Fitzgerald and two-time Olympic gold medalist basketball star Chris Paul have invested in the Rajasthan Royals. Two years ago, Forbes ranked the IPL as the sixth largest sports league in the world. The Indian diaspora playing cricket in all parts of the world adds to the global appeal of the IPL.

Share.

About Author

Comments are closed.