Digital was the show stealer in IPL’s blockbuster media rights auction that made the Indian T20 competition the second richest sporting event in the world. BCCI hit the jackpot after the three-day drama-filled battle ended and stands at a net Rs 48,390.5 crore for the next five years.
While Disney Star retained the TV rights for the subcontinent and bagged it for Rs 23,575 crore, it was the digital rights that caught everyone’s eye, with Viacom18 going all out to secure it for Rs 23,758 crore. Viacom18 not only got the exclusive rights for the subcontinent, but also got the digital and TV rights for Australia + New Zealand, the UK and South Africa.
Analysts believe that the high premium received by the digital rights and the splitting of the TV and online rights for the first time will be a major game-changer for the competition.
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If IPL 15 got bad press for its reported drop in viewership (some estimates suggested a 30 percent drop in TV viewership), Reliance’s aggressive entry into the digital broadcasting platform predicts a spike in the eyes for the game – albeit through a different channel. Earlier this year, Reliance Industries and Viacom18 had formed a strategic partnership with Bodhi Tree Systems, a Lupa Systems platform from James Murdoch and Uday Shankar, a veteran media industry director.
Also, more money in the hands of franchises could mean they open their wallets to buy star players from abroad, sparking more interest in the league. Part of the reason for the declining viewership this year was due to a lack of appeal and too many fading players in the franchises.
As Vinit Karnik, Head – Sports, Esports and Entertainment, GroupM South Asia believes that digital rights have certainly brought great value to the competition. “As a strategy, Viacom was very clearly going after the digital rights. I believe they will have a groundbreaking proposition when it comes to monetizing these digital media rights and add multiple tiers and platforms to their monetization strategy” , he said.
Sources close to Viacom18 confirmed this notion, describing how, without the baggage of TV, the company can actually do much better than Hotstar has ever done with digital rights, even though it gained nearly 50 million subscribers. But the Reliance-backed Viacom 18 network could gain several times the subscriber base, piggybacking on the Jio network and through innovative programming. The number of smartphone users in India is over 500 million and Viacom18 expects it to reach 700 million soon. And there is no end to the possibilities given the reach of the various digital initiatives.
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As Karnik puts it, “Viacom has tremendous room for growth of the Voot (its OTT platform) perspective. I also believe that they will leverage the telecom aspect with the Jio subscriber base and may add trading through Jio Mart in the future. I therefore believe Viacom will change the game by thinking radically and bringing IPL to all corners of India.”
Significantly, it’s the astute Uday Shankar, the man responsible for Star’s success in securing the rights to Sony and Hotstars, who heads Viacom 18’s IPL revenue strategy. make sure that a major strategy already exists.
Karan Taurani, senior vice president at Elara Capital also believes that rights unbundling will give the upper hand to the digital rights holder. He thinks that some industries such as fintech, commerce, ed-tech and EV advertising will shift to digital. “Digital has the potential to generate a gross margin of 24 percent in its fifth year, helped by strong growth prospects, compared to TV, whose gross margins will peak at 13 percent,” he noted.
Windfall for franchisees
Analysts say the surge in media rights revenue will also be a windfall for the IPL franchises. IPL teams receive 50 percent of the revenue from the media rights and central sponsorship, the so-called central revenue pool.
According to estimates by Elara Capital, the estimated revenue of IPL teams in FY 24 is expected to increase almost 2.2 times averaging about Rs 650 crore-Rs 800 crore due to the surge in media rights revenue and a greater number of matches.
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A report from Kotak Institutional Equities also expects the revenue of the IPL franchise to rise to Rs 625 crore-Rs 700 crore (including local sponsorship and entrance fees). The value per game is in the range of Rs 118.02 crore.
A euphoric Jake Lush McCrum, Chief Executive Officer of Rajasthan Royals, said: “The IPL has become the second most valuable competition in the world by game and the fact that the digital rights have delivered more than broadcast is a shift that is ahead of his time.”
Fill up for growth
“What’s most exciting about the growth in the value of these rights is the opportunity to reinvest in the game, especially at the grassroots level,” Lush said, adding how the additional funds will enable the Royals to fulfill their mission. transforming society through cricket. “This will scale through our foundation that focuses on women’s empowerment, or our academies in India around the world, or our investment in sports education, or the support we provide ex IPL players, or our efforts in launching tournaments. for female cricketers,” he said.
Business strategist and avid IPL follower, Lloyd Mathias believes the massive bids totaling nearly $6 billion for the media rights is great news for the ten franchises, whose revenue share will soar. “This means the franchisees can invest more in spotting talent at the grassroots level, as well as bolster their merchandising and related revenues, which has not been optimal for most franchisees until now,” he says.
He points out that this is also good news for cricketers in the value chain. “The BCCI announced a 100 percent increase in the monthly pension for former cricketers. The growing economic influence of IPL bodes well for cricket in India in general, and can only increase the interest of young people in the game,” he added.
Brand advisor Giraj Sharma, and founder of Behind the Moon, says: “The money could mean better training facilities and for all you know it could translate into land ownership… With franchisees who own or co-own land, as is the case with There is also hope that some money will be put into setting up cricket academies and nurseries to harness local talent.”
While the revenues of the franchises are on the rise, it is unlikely that the IPL players will benefit as BCCI puts a cap on player compensation. However, the expectation is that the limit can be increased slightly.
In conclusion, as Mustafa Ghouse, CEO of JSW Sports, which co-owns Delhi Capitals, sums up: “Two behemoths in the IPL and the digital space have collided to create something that transforms the way sports in the country. consumed changes. In a matter of three days, the IPL is second only to the NFL when it comes to rating per game, and what this does is make the big players in global sport sit up and take note. This is a game changer.”