The Board of Control for Cricket in India (BCCI) is projected to earn between Rs 6,500 crore and Rs 7,500 crore from the sale of separate TV and digital rights for India’s home games. However, Elara Capital has noted that the base price for these rights is 25% lower per match compared to the previous cycle. Analyst Karan Taurani explained that the BCCI is expected to surpass the base price by 1.6-1.9 times, which is approximately 32% higher than the earlier cycle rights when considering similar factors. He also mentioned that the current base price of Rs 450 million per match is already 25% lower than the price in the last cycle, which was Rs 600 million.
The combined base price for TV and digital rights for the upcoming cycle of 2023-2028 is Rs 3,960 crore, covering 88 matches. Elara has highlighted that the base price for TV rights is Rs 20 crore per match, while the base price for digital rights is Rs 25 crore per match. At the auction, the BCCI aims to secure a minimum of Rs 60 crore per game, which equates to a base price of Rs 5,280 crore through the eAuction process. If the expected numbers are not reached, Taurani suggests that the BCCI may cancel the process.
Elara anticipates that the digital rights premium will exceed the base price, with TV rights premium estimated to be in the range of 30-40% over the base price, while digital rights premium could reach 80-90%. This would result in a per match price of Rs 80 crore for both TV and digital platforms. Taurani justified this pricing strategy by explaining that it would allow platforms to break even or turn profitable. He also expects India’s advertising landscape to become favorable in CY24, driven by profitable new age and commerce firms, easing inflationary pressures, and the emergence of Meta, Web 3.0, and 5G technologies.
In 2018, Star Sports India outbid Reliance and Sony to secure the BCCI media rights, including television and digital platforms, for Rs 6,138.1 crore covering the period from 2018 to 2023. Disney Star currently holds the rights to broadcast and stream matches on TV and its digital platform for all ICC events. They also have the rights for the Asia Cup until this year. As a renowned broadcaster with a strong presence, advanced technology, and years of experience, Disney Star is often a preferred choice for sports media rights.
Leading media companies like Disney Star, Viacom 18 (owned by Reliance), and potentially Sony (pending merger with Zee) are expected to compete for the media rights for India’s bilateral matches from 2023-2028. However, this takes place amidst Disney Star and Reliance Jio collectively investing Rs 48,390 crore in separate TV and digital coverage for the IPL, which marked the first time that the BCCI split the rights.
Elara attributes the significant growth in IPL media rights price to higher inflation in cricket pricing compared to other genres and the participation of various bidders, including global OTT giants, in the digital side of the process. They also highlight the scarcity premium as cricket is a vital strategy for platforms seeking to expand digitally. Nonetheless, Elara suggests that the BCCI has set a lower base price in an effort to attract interest from platforms, indicating potential lower premiums compared to the previous cycle due to fewer bidders, reduced ad spending, and an anticipated 20-25% YoY decline in IPL revenue in CY23.
Industry experts previously expressed caution, considering that media companies have already committed $9 billion for IPL and ICC rights. Moreover, companies face other commitments, such as potential mergers, stake realignments, or the need to invest heavily to capture larger market shares. While there were reports suggesting that the BCCI is seeking bids from tech giants Amazon and Google for digital rights, insiders suggest the likelihood of their participation is very slim. For instance, Amazon did not even bid for the IPL, which is currently the BCCI’s most valuable property.
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