Can the Board of Control for Cricket in India (BCCI) surpass the IPL? was a crucial query in the broadcasting industry during the previous BCCI rights auction in 2018. The question seemed a bit odd given that both belonged to the same regulator. For around Rs 16,374 crore (USD 2.5 billion), or about Rs 55 crore each IPL game, the IPL rights had been purchased. The key question at that time was whether an India game could fetch a higher price. Yes, it did, with each international match fetching about Rs 60 crore in sales.
After five years, the BCCI-IPL comparison is no longer a relevant conundrum as the India rights are set to go up for auction once more on Thursday (August 31). The IPL has improved its standing so much that catching up now appears impossible. The incredible total price of Rs 48,490 crore (about USD 5.2 billion over five years) has been reached, making the cost each game astoundingly high at Rs 118 crore. The BCCI has since declared that it would be content with less.
Implicitly conceding a readiness to accept half the value of an IPL game, the Invitation to Tender (ITT) says specifically that the BCCI would cease the auction process if the aggregate price of an international game falls below Rs 60 crore. Notably, there isn’t a cricket league in the globe that offers value comparable to an IPL match.
This does not necessarily mean that the sale will result in a return of just Rs 60 crore for an international match, though. Although it’s unlikely to match the IPL figures, there’s a good chance that the value will go over Rs 60 crore. Elara Capital, a company that does market research, reported that the value is anticipated to fall between Rs 65 and Rs 75 crore.
Some business experts believe that even a billion dollars, or around Rs 82,000 crore, is possible. Given that there are 88 games in this broadcast cycle, that would mean that each game needs to earn around Rs 90 crore. Considering market conditions, a billion-dollar yield may be an overly optimistic goal, but Indian cricket has a history of presenting unexpected results. The BCCI is able to win a jackpot with relative ease.
Bundles, base costs, and overall value
The BCCI offers the rights in two packages: the India Subcontinent Television Rights, which start at a base price of Rs 20 crore, and the India Subcontinent Digital Rights, which start at a base price of Rs 25 crore and are combined with Rest of the World Television and Digital Properties. The total base price each game is therefore Rs. 45 crore. However, a clause in the ITT highlights that the BCCI has the power to void the process if the combined value of the two packages—as previously mentioned—is less than Rs 60 crore.
Valuation Discussions
Divergent viewpoints exist within the broadcasting sector on the valuation of Rs 60 crore. Several people contend that this number undervalues the rights. This claim is based on a contract between Sony Sports and the England and Wales Cricket Board (ECB) that stipulates that each India-England (away) match will be paid out at a rate of roughly USD 10 million, or more than Rs 80 crore for the India area alone. It makes sense that such games have an even higher global value. Disney Star and Cricket Australia have a similar arrangement, where each Australia-India (away) game has an equal value.
These experts claim that the BCCI is undervaluing its property while the ECB and CA make more than Rs 80 crore from England-India and Australia-India matches, respectively.
Those who disagree with this perspective point out that just half of the 88 games are against England and Australia, who are considered to be among the top teams. The remaining games are contests with teams that are smaller than average, including South Africa, New Zealand, Sri Lanka, Bangladesh, and Afghanistan. From this vantage point, a broadcaster may find it more financially feasible to buy the rights to games featuring these clubs from their separate boards. In essence, the value of an India (away) game might be much lower than Rs 60 crore.
Key Figures
The future e-auction will only have three contestants, all of whom are well-known competitors, according to a recent report by Cricbuzz. After purchasing the IPL and ICC rights, the India rights constitute the sports broadcasters’ last strategic asset. These three participants each have at least one tactical advantage.
Through its merger with Zee Sports, Sony Sports Network, now operating as Sony Pictures Sports Network under Culver Max Entertainment, obtained the television rights to the World Cup matches for the following four years. Digital and television rights for the World Cup matches are held by Disney Star. The internet rights to the IPL belong to Viacom 18, who is most likely the strongest competitor.
The resources, motivation, tenacity, and desperation of one or more of these entities will determine the outcome. The positioning of e-auctions Because of their financial clout and Jio-driven low-cost data, Mukesh Ambani and Uday Shankar supported Viacom 18 favorably for acquiring the digital rights. Viacom has prioritized digital rights and isn’t very concerned about Sports 18, their television channel. Viacom is expected to keep increasing the valuation during the auction by Rs 1 crore at a time, as required in the auction, until it is certain the digital property is in its possession.
Following its merger with Zee, Sony Sports, which hasn’t lately acquired a substantial property, is anticipated to aggressively chase television rights, garnering significant industry attention. Notably, Sony presented Viacom with a strong challenge for the internet rights to the IPL, which ultimately sold for a staggering Rs 57 crore per game. Expectations for this auction have increased as a result of Sony’s continued opposition to Viacom last year.
Disney Star, despite appearing to be quiet due to rumors that it plans to sell up its India operations, is still a wild card. Bob Igor, the head of Disney’s foreign operations based in California, isn’t sure if he wants to spend less money or save it. The most recent Wall Street Journal article makes this claim, yet a CEO of a company may have different aims in private than they do in public. The existing rights holder, Disney Star, may come up with some surpise, making it possible for it to emerge as a dark horse.
THE RIGHT TO KNOW
Players and the Auction
Auction day is August 31.
Online auction format
Participants: Viacom 18, Sony Sports, and Disney Star
Each company must meet the requirement of having a net worth of Rs 1000 crore.
Special Provision: BCCI approving participation of a consortium
Packages:
There are two sets of rights for sale.
India Subcontinent Television rights in Package A
Subcontinent of India: Package B Rest of the World TV plus digital rights
Base Costs:Package A: 20 crore rupees
Package B: 25 crore rupees
Rider: A game’s total worth must be less than Rs 60 crore.
Game cycles and broadcasting:
Timeframe for the broadcast cycle: September 2023 to March 2028
88 games total (36 T20Is, 25 Tests, and 27 ODIs)
Australia: 21 games
18 games against England
10 games against South Africa
11 games against New Zealand
6 games against Sri Lanka
10 games vs West Indies
Afghanistan: 7 games.
5 games against Bangladesh
India
