Bidding for the television and digital media rights of the Indian Premier League touched ₹43,050 crore on Day One of the e-auction as four large broadcasters fought for the biggest event in Indian cricket, two people aware of the development said.
Disney-Star India, Viacom18 and Sony Pictures Networks India (SPNI) bid for the TV rights for the Indian subcontinent under Package A, while Zee Entertainment Enterprises Ltd (ZEEL) bid only for digital media rights for the Indian subcontinent under Package B, said one of the two people cited above, both of who spoke on condition of anonymity.
While the TV rights closed for the day at ₹57 crore per match, 16% above the floor price of ₹49 crore, digital rights bids surged to ₹48 crore, up 45% from a base price of ₹33 crore per match. The Board of Control for Cricket in India (BCCI), which owns IPL, has divided the media rights into four packages with a combined base price of ₹32,890 crore. The auction is for the next five-year cycle of the tournament (2023-27) with 410 matches.
The auction process started in Mumbai early on Sunday and closed at 6pm, with the BCCI team gathered at the city’s Taj Lands End hotel. The auction will continue on Monday and resume for Package A and B, which have not closed yet. IPL’s Package C and Package D will be on offer once the auction for A and B packages is over.
“As expected, bidding for the digital media rights seems to be more aggressive as more and more viewers shift online,” said the first person, who is close to the BCCI. A top sports marketing executive said on condition of anonymity that digital rights bidding proceeded swiftly as bidders took less than the maximum 30 minutes to raise their bids. “So, the digital bids moved quickly and jumped faster,” he said. “The TV rights have also jumped but not as sharply,” he added.
The last five years have seen an explosion of digital media in India. According to the Ficci EY report 2022, internet penetration in India increased 5% to reach 834 million people in 2021, of which 795 million had broadband access as of September 2021. Online video viewers grew to 497 million. Media analysts also attribute the success of Disney+Hotstar in India to IPL media rights that Star owned for the last five years. Of the 50 million Disney+ Hotstar subscribers in Asian countries like Malaysia, Thailand and Indonesia, almost 45 million are from India.
According to industry estimates, streaming service Zee5 currently has 6.5 million paid subscribers, which may be why the company is keen to acquire digital rights for IPL. “Besides, if the Sony and Zee merger goes through, it does not make sense for both to bid for both TV and digital rights separately,” said the first person.
TV rights are also keenly contested, though a report by EY and Ficci in March said the core pay-TV market in the country was under stress. Subscription revenue for television fell for the second year in a row in 2021, recording a 6.2% decline, owing to a reduction of 6 million pay-TV homes and lower average revenue per user. Mint had earlier reported that 10 million households gave up their pay-TV connections in the last two years, possibly leading to lower viewership of IPL and other paid general entertainment channels in the last several months. Cord-cutters in the metros have replaced their paid DTH connections with subscriptions to streaming services, while at the lower end, consumers cut off the cable to get on to DD FreeDish.
“Day One was not muted by any stretch of imagination. The combined price is already over ₹42,000 crore,” said the second person, who works with a broadcaster. To a question whether Reliance Industries Ltd-owned Viacom18, backed by Bodhi Tree Systems, an investment platform by Uday Shankar and James Murdoch’s Lupa Systems, will sweep all the rights, the person said he doesn’t see any single entity grabbing all the rights as the price is prohibitive.
Bidding for Package A and B will resume on Monday, while bidding for Package C and D will begin only once the process for A and B is over. However, when its turn comes, bidders will likely bid aggressively for Package C, too, which offers non-exclusive digital rights for 18 matches at ₹16 crore per match. This will allow the owner of these rights to stream the opening match, playoffs and some evening matches. “Anyone who wins package A may also want to pair it with Package C as that is where the crucial 18 matches are on offer at ₹16 crore. It’s better than spending on 74 matches when these will get you more than 40% of the viewership. Expect Package C prices to escalate too,” said the first person.
Package D involves rights for the rest of the world, both for TV and digital, at ₹3 crore per match.
The auction will be time-consuming and may not end in a hurry as the winner of the first package can challenge the winner of the second package for a re-bid. Similarly, the final winner of the second package can challenge the winner of the non-exclusive package.
The cricket board will not announce any winner till bidding for all packages is complete.
