BCCI approves 10-team Indian Premier League from 2022 edition

[U$ofA]

Great Battle of the sports broadcasters. Hope Star wins this time as well as the quality is quite good .

With the change in digital rights rule, Amazon will make a big play for this. At this point I think the battle will be between Disney and Sony for tv rights, Disney and Amazon for digital rights.

Any angle you look at it, win win for IPL and BCCI.

 

[Last Monetarist]

With the change in digital rights rule, Amazon will make a big play for this. At this point I think the battle will be between Disney and Sony for tv rights, Disney and Amazon for digital rights.

Any angle you look at it, win win for IPL and BCCI.

RelianceJio have also been aggressively bidding for sports rights, and have had a recent capital injection from the Murdochs. Not sure whether they will win, but their presence is certain to increase the value of the rights.

 

[cricketjoshila]

RelianceJio have also been aggressively bidding for sports rights, and have had a recent capital injection from the Murdochs. Not sure whether they will win, but their presence is certain to increase the value of the rights.

Not Reliance jio. But its smaller subsidiary TV 18 which is a JV with Viacom. Its a 51:49 JV with reliance having 51 percent.

Post the deal with James Murdoch and Uday Shankar, the JV will stand as

Reliance 51%
Murdoch Shankar 39%
Viacom 10%

So they have the financial might of Asia's richest person and the Murdoch's acumen behind them.

 

[cricketjoshila]

With the change in digital rights rule, Amazon will make a big play for this. At this point I think the battle will be between Disney and Sony for tv rights, Disney and Amazon for digital rights.

Any angle you look at it, win win for IPL and BCCI.

Dont be surprised if Netflix is one of the bidders.

 

[cricketjoshila]

At the highest end IPL may get 6 to 7bn for a 5 year tenure. This for a 8 week long tournament puts IPL among the most valuable tv rights in the world.

 

[gazza619]

Serious money!

This also means good news for IPL as appetite of the global viewer is increasing.

I am absolutely loving the option of watching some T20s in the late afternoon after work here in the UK.

 

[gazza619]

Serious money!

This also means good news for IPL as appetite of the global viewer is increasing.

I am absolutely loving the option of watching some T20s in the late afternoon after work here in the UK.

I meant *PSL

 

[U$ofA]

RelianceJio have also been aggressively bidding for sports rights, and have had a recent capital injection from the Murdochs. Not sure whether they will win, but their presence is certain to increase the value of the rights.

Not Reliance jio. But its smaller subsidiary TV 18 which is a JV with Viacom. Its a 51:49 JV with reliance having 51 percent.

Post the deal with James Murdoch and Uday Shankar, the JV will stand as

Reliance 51%
Murdoch Shankar 39%
Viacom 10%

So they have the financial might of Asia's richest person and the Murdoch's acumen behind them.

Did not know that Reliance is in the mix of things. So that's the third company. From what I read, Sony also has a digital setup. So they would bid for tv and digital similar to Disney. Does Reliance have a digital setup?

Disney, Sony, Amazon, Reliance and perhaps Netflix? Competition is always good.

 

[U$ofA]

At the highest end IPL may get 6 to 7bn for a 5 year tenure. This for a 8 week long tournament puts IPL among the most valuable tv rights in the world.

Would make it bigger than all the other boards, ICC cricket broadcasting rights combined.

 

[shariqnoor]

Only a matter of time before we have 20 teams in the IPL and it becomes a 9 month tournament ala the footballing leagues around the world.

Inevitable that franchise cricket is the future. Nobody wants to play bilaterals anymore where the money is peanuts compared to leagues.

I'm a Test cricket fan but to be honest, now I don't see the point of it anymore. Every cricketing country should have a league of its own and we can have the Champions League as well. Make cricket a one format game. ODI and Tests are boring now.

 

[cricketjoshila]

Would make it bigger than all the other boards, ICC cricket broadcasting rights combined.

Comfortably.

 

[hoshiarpurexpress]

Dont be surprised if Netflix is one of the bidders.

it makes sense and will make it very attractive and wide appeal.
All NZ matches and highlights are on Amazon Prime, which I watch.
Imagine IPL matches available like that on Amazon or Netflix, so many possibilities of increased subscription... And viewing experience is so smooth and everywhere on the go. I watched those NZ match highlights during my train trip from Delhi to Hoshiarpur to pass time, on free Rail/Google wifi.

Huge market to tap into, including overseas cricket lovers as well.

 

[hoshiarpurexpress]

If OTT platforms like Amazon and Netflix get the deal, it would be a boost for IPL even in remote geographies where timings do not suit at all. Australia is once such example, IPL match for me starts at 12 in the night. Impossible to watch on a working day. I catch up highlights the next morning.
Imagine the whole recording of all the matches available next day, I can watch as if it is live. Mouth watering stuff.. Onwards and upwards for BCCI and IPL. [MENTION=76058]cricketjoshila[/MENTION] @U$SofA

 

[Titan24]

Make cricket a one format game. ODI and Tests are boring now.

T20 in isolation becomes really monotonous sport as it doesn't offer everything the cricket is known for. Can anyone honestly say that in any T20 league which is a month or 2 month long there hasn't been a point that the fans thought, its been lingering on for too much so lets just get it over with as I cant wait to watch the next international test match, ODI?

Rest of the team sports generally have one formats and a league or an international match offers the sport in totality. Also not to forget the leagues of other sports are not restricted to 3-4 overseas players. Cricket has that restriction as boards want local players to get more opportunities so that they can be groomed for the national teams. If international cricket is not meant to be part of the future then why even bother with the grooming of local players with that much of a quota? Make it like NBA and soccer where any franchise can any player, bet it overseas or local without any restriction.

So these are few points and some of them I have debated before as well. T20 cricket for 2 months becomes a monotonous affair because of lack of integrities involved in this format in comparison to any other sport let alone 9 months. Might happen in future, who knows but that would not make cricket a bigger sport rather possibly take it backwards as the scale involved in cricketing world, player production scouting mechanism and every other thing is one way or another dependent upon international cricket alongside the longer format domestic cricket forming some of the very basics of the game.

 

[cricketjoshila]

it makes sense and will make it very attractive and wide appeal.
All NZ matches and highlights are on Amazon Prime, which I watch.
Imagine IPL matches available like that on Amazon or Netflix, so many possibilities of increased subscription... And viewing experience is so smooth and everywhere on the go. I watched those NZ match highlights during my train trip from Delhi to Hoshiarpur to pass time, on free Rail/Google wifi.

Huge market to tap into, including overseas cricket lovers as well.

Bcci is going to do separate TV and online streaming auction. So expect a number of OTTs to bid for only online streaming. Amazon will bid. Lets see who else.

 

[silentkiller187]

Only a matter of time before we have 20 teams in the IPL and it becomes a 9 month tournament ala the footballing leagues around the world.

Inevitable that franchise cricket is the future. Nobody wants to play bilaterals anymore where the money is peanuts compared to leagues.

I'm a Test cricket fan but to be honest, now I don't see the point of it anymore. Every cricketing country should have a league of its own and we can have the Champions League as well. Make cricket a one format game. ODI and Tests are boring now.

i enjoy the IPL as a product dont get me wrong , but 9 months would defo be overkill regardless of how many teams, will lead cricket to become something similar to baseball or NFL, indian only concentrated fan base with a few scatters of supporters elsewhere.

 

[Rajdeep]

Only a matter of time before we have 20 teams in the IPL and it becomes a 9 month tournament ala the footballing leagues around the world.

Inevitable that franchise cricket is the future. Nobody wants to play bilaterals anymore where the money is peanuts compared to leagues.

I'm a Test cricket fan but to be honest, now I don't see the point of it anymore. Every cricketing country should have a league of its own and we can have the Champions League as well. Make cricket a one format game. ODI and Tests are boring now.

Love IPL but the day test cricket is abolished I will stop watching cricket all together.

 

[cricketjoshila]

Only a matter of time before we have 20 teams in the IPL and it becomes a 9 month tournament ala the footballing leagues around the world.

Inevitable that franchise cricket is the future. Nobody wants to play bilaterals anymore where the money is peanuts compared to leagues.

I'm a Test cricket fan but to be honest, now I don't see the point of it anymore. Every cricketing country should have a league of its own and we can have the Champions League as well. Make cricket a one format game. ODI and Tests are boring now.

Any IPL beyond 10 weeks will be over kill. Right now IPL is played for 6 to 8 weeks. If another 2 teams are added it may be 10 weeks and that should be it.

 

[Savak]

Not Even Australia and England if they join hands can stop India's financial dominance in World Cricket. In some ways i am glad because if it hadn't been for BCCI's and IPL's wealth, these goras as we have seen in the James Faulkner episode will treat Desi's like crap.

 

[Savak]

Any IPL beyond 10 weeks will be over kill. Right now IPL is played for 6 to 8 weeks. If another 2 teams are added it may be 10 weeks and that should be it.

People do not have appetite for Cricket no matter how high quality the tournament is. Even 2 months plus is over kill. If the BCCI adds more teams in the future, then they will have to restrict the no of games i.e. each team can play a maximum of 1 home and 1 away game against each other, they will also have to be plenty of double maybe triple headers in a day.

 

[U$ofA]

People do not have appetite for Cricket no matter how high quality the tournament is. Even 2 months plus is over kill. If the BCCI adds more teams in the future, then they will have to restrict the no of games i.e. each team can play a maximum of 1 home and 1 away game against each other, they will also have to be plenty of double maybe triple headers in a day.

I don't think the IPL will ever be more than three months, maybe four. As the number of franchises increase, the teams will be divided into divisions. Which means games will be within each division. With the odd inter division game thrown in. Similar to what we have with MLB.

But this is at least 8-10 years away.

 

[Savak]

If the IPL Broad cast deal is almost $7 billion for 5 years. Surely the players can be paid more. What are the chances the Franchises will start playing the players $20-30 million per season?

 

[cricketjoshila]

If the IPL Broad cast deal is almost $7 billion for 5 years. Surely the players can be paid more. What are the chances the Franchises will start playing the players $20-30 million per season?

Its only an estimate. No one knows the exact value till the rights are actually sold.

If its really sold for $7bn. The franchisee share will be 3.5bn over 5 years to be shared by 10 franchisees. Thats 70mn a year. Add other sponsors and you may be looking at 80 to 100mn depending on the franchisee.

The two new teams will have to pay their franchisee fees so they may actually get a small profit.

The older 8 teams will have to give 20 per cent to the bcci but will still make a hefty profit.

So over all as and when the salary cap is raised to say 15mn usd or may be more we will say players earning 5mn to 7mn for a season.

 

[hoshiarpurexpress]

BCCI will never make the tournament more than 3 months long. They make good money on India's bilateral tours as well, especially with ODI's and T20Is. They will keep the balance as the administrators are shrewd and know how run the game and control it, as well as make the money.

 

[Savak]

BCCI will never make the tournament more than 3 months long. They make good money on India's bilateral tours as well, especially with ODI's and T20Is. They will keep the balance as the administrators are shrewd and know how run the game and control it, as well as make the money.

3 months is too long. Even two months is very long. People in Australia lost interest in the big bash because they increased the length of the tournament and the number of games. 6 weeks is the max for any tournament

 

[hoshiarpurexpress]

3 months is too long. Even two months is very long. People in Australia lost interest in the big bash because they increased the length of the tournament and the number of games. 6 weeks is the max for any tournament

Hearing that the broadcaster, Star, is already pushing to have more double headers as they also know this.

 

[Thanos]

Not Even Australia and England if they join hands can stop India's financial dominance in World Cricket. In some ways i am glad because if it hadn't been for BCCI's and IPL's wealth, these goras as we have seen in the James Faulkner episode will treat Desi's like crap.

As an Indian I like how BCCI has turned the table against these goras with its business model. Gone are the days when Eng-Aus treated us like desis and bullied in every possible way.

But I am also someone who would like to see some power balance in world cricket. I expected Pak and Bangladesh to do this with combined population of 40+ cr. However both failed to capitalise their potential due to one reason or other.

 

[MenInG]

Media report:

It has been decided that the tournament will be played at four venues - Wankhede Stadium, Brabourne Stadium, DY Patil Stadium in Mumbai, and MCA International Stadium in Pune.

“55 matches spread over three venues - Wankhede Stadium, Brabourne Stadium, and DY Patil Stadium - in Mumbai and 15 more matches in the MCA International Stadium in Pune is likely to be the distribution of the league games for IPL 2022"

“Further, all teams are set to play four games each at the Wankhede, DY Patil Stadium, and three apiece at Brabourne and Pune,” the report added.

Also, the final of the tournament will take place on May 29, but the venues for the playoffs have not been decided yet.

“The tournament is set to wrap up on Sunday, May 29. The venues for the playoffs are yet to be decided"

The BCCI had initially finalised on March 27 as the start date but are considering Star’s proposal to start IPL 2022 on March 26 instead. According to a report of the Cricbuzz website, that broadcaster Star want IPL 2022 to start on March 26, a Saturday, as they want to organise a double-header on 27th which will be a Sunday. The first day of the IPL has never witnessed a double-header in the past.

“We understand that a Saturday start helps the broadcaster to kick-start the league with a bang with three matches in the first weekend. A Sunday inauguration would not permit that. The BCCI and the broadcasters were in discussion over this and eventually it could be on March 26,” a franchise official was quoted.

 

[U$ofA]

Watching the Ind vs SL, I must say the home of the new IPL expansion team LSG is impressive. Design is such that even the people in the back are not that far from the action.

 

[Savak]

IPL Media Rights: Will it be a winner’s curse?

Experts question the financial viability of owning IPL media rights if the value reaches Rs 40,000 crore to Rs 50,000 crore due to a bidding war among Star, Sony-Zee, Reliance and Amazon

by Javed Farooqui

Updated: Mar 1, 2022 9:09 AM

As the D-Day for the Indian Premier League (IPL) media rights auction inches closer, the speculation about the likely value of the next five-year cycle for the cash-rich league is getting wilder by the day. As per market speculation, the IPL media rights could fetch anything from Rs 30,000 crore to Rs 50,000 crore.

However, the question that begs an answer is how will the future winner of the IPL media rights recover this mind-boggling investment in the next five years.

According to a senior advertising executive with a top media firm, the IPL might become a winner's curse if the bidding war becomes too intense. "If there is a bidding war for the IPL media rights, it might become a winner's curse. While we are talking about Disney Star, Sony-Zee, and Jio-Viacom18, there is a distinct possibility that a new player might come and upset the calculations of traditional media companies. Digital rights of IPL will see huge appreciation which will be difficult to recover in the next five years. IPL is very important for broadcasters who want to strengthen their OTT play. Disney+ Hotstar was built on the back of IPL digital rights," he stated.

He also noted that TV will continue to be a mainstay of revenue monetisation even as digital is catching up fast. "Even for the next two years, the IPL monetisation will be split 80:20 in favour of TV. That said, the percentage may start switching with each passing year. Initially, even 5% of the revenue was not coming from digital whereas today it has touched 10%. So there has been a massive swing in favour of digital monetisation on IPL. This is an irreversible trend that will change the overall revenue mix. Digital monetisation will depend on the kind of base that streaming platforms and Connected TV attain five years down the line."

The executive also noted that the IPL will become a tough proposition to monetise if the TV and digital rights get split between two different players. "If the media rights get bifurcated between multiple players, it will spell doom for the rights owners. For monetising IPL to the optimum level, the winner needs to win the composite media rights. Having the media rights will allow the winner to create a walled garden around the IPL."

Currently, a large chunk of the IPL revenue comes from TV broadcasting across advertising and subscription revenue. Digital has also emerged as a key medium of monetisation even though its contribution remains significantly lower than TV. However, monetisation from digital is expected to see a significant jump in the years to come as audiences spend more time on the mobile screen.

That being said, experts question the financial viability of owning IPL media rights if the value reaches Rs 40,000 crore to Rs 50,000 crore due to a bidding war among Star, Sony-Zee, and Reliance, with Amazon being the surprise element.

At the above-mentioned value, the annual payout works out to Rs 8,000-10,000 crore. For the current rights cycle, Star's average yearly payout to the Board of Control for Cricket in India (BCCI) is Rs 3,270 crore for 60 matches or Rs 54.49 crore per match. In the final year, the payout will jump to Rs 4,032 crore due to the addition of 14 new matches.

IPL is already the costliest media property in India to advertise. An advertiser will have to shell out Rs 14 lakh for airing a 10-second ad during IPL. The price of a mid-roll video ad on OTT is Rs 210 CPM (000). On the TV distribution front, the IPL gives a huge boost to the overall channel bouquet and allows the rights owner to collect higher subscription revenue from the market. IPL is also a key reason why Disney+ Hotstar is miles ahead of its OTT competitors in the paid subscriber game.

But a sports media executive noted that there is a limit to which IPL ad rates will increase. He further stated that the bare minimum outlays required for advertising on IPL is so big that very few companies can afford it. "Everyone is talking up the numbers for IPL, but the challenge is not what your Excel Sheet models show. The question to ask is if there is so much money in the market for one event. It is easy to talk about Rs 40,000 crore for IPL, but the fact of the matter is that earning Rs 8000 crore every year is not a mean task. The ad inventory will not see a drastic change in the next five years after factoring in the additional matches. At some point, the advertisers will also question the rationale behind increasing the ad rates every year," the executive said.

He also noted that the advertising outlays for IPL are expected to go up as the number of games sees an increase. "At a very basic level, an advertiser will have to commit an outlay of Rs 30 crore even if they take a bare minimum of four spots of 10 seconds each at Rs 12.5 lakh per 10 seconds in every match for 60 matches. When you make it 94 matches, the same Rs 30 crore investment will become Rs 47 crore over a higher number of matches including afternoon games. How many brands are there in India who can start with a Rs 50 crore investment over six weeks? That is where the problem starts," he stated.

While the IPL media rights winner will have more ad inventory to sell across 94 games, the bigger challenge will be the increase in the number of afternoon games which is not necessarily good for a broadcaster due to low viewership in this time slot compared to the prime-time games.

"Now the question before an advertiser is if they spend so much on a six-week property or spend the same money on entertainment, news, digital, etc.? For the same investment, they can get a lot more of advertising opportunities. vivo had overbid for IPL title sponsorship. Since they realised that they had overbid, they gave up the title sponsorship to Tata Group which got it at a huge discount," the executive said.

Also, given the whopping amount of money that the bidder will have to pay to acquire the IPL media rights, whoever wins it will not have any money to invest in other bigger sports properties, like the ICC and BCCI, slated later for the year.

Compounding problems for sports broadcasters is the price regulation put in place by the Telecom Regulatory Authority of India (TRAI) in the form of the New Tariff Order (NTO) 2.0. As per the new pricing regulation, a broadcaster cannot price a channel above Rs 12 if it has to be included in a bouquet. The broadcasters have not been able to increase the price of their channels for the last two years due to the NTO 2.0 and the subsequent court cases. The TRAI is expected to float a new consultation paper to look into the concerns of the broadcasters.

"For sports broadcasters, one of the worries is the NTO 2.0 which caps the pricing of the channels. When bidders are making their revenue projections for the IPL, they will factor in the likely impact of the pricing cap on the subscription revenue. Sports broadcasting business globally is driven by pay-TV revenue, unlike India," a sports broadcasting expert said.

He noted that TV will continue to drive IPL monetisation in the short term as the revenue contribution from digital is still not commensurate with the investments. "Even today, most players would assign 75-80% of the media rights value to TV because all said and done the monetisation mainly happens on TV. If you look at OTT, most of the players are running on the freemium model. Netflix, which is a pure-play SVOD player, has still not been able to crack the Indian market due to costly subscription rates which were brought down recently. While everyone is talking about digital, the monetisation is yet to catch up with TV. The monetisation game will be different only if someone like Reliance Jio gets it because they own the pipe. For Jio, the digital rights of IPL will be a shot in the arm to grow data consumption," he added.

Triplecom Media iTap Founder-CEO Kunal Dasgupta believes that the NTO 2.0 will not have much of an impact on monetisation since the Indian sports broadcasters rely more on advertising revenue. "I don't think NTO 2.0 will have an impact on sports monetisation because distribution contributes 25% to the overall revenue of sports broadcasters while advertising still comprises 75%. Even under NTO, the broadcaster will charge his pound of flesh by bundling the channels."

Dasgupta added that the winner of IPL rights will have to reimagine how the property is monetised. "Sports NFTs can become a big revenue stream going forward. NFT is all about sharing, so the media rights owner and the franchises will have to work together to realise its true potential."

In an earlier interaction, he had stated that IPL will become a loss-making property for the next five years as recovering Rs 40,000 crore will be a daunting task. "Over five years, the IPL winner will have to be ready to lose at least Rs 10,000 crore unless someone monetises it smartly particularly on digital. There are so many ways to monetise IPL on digital like NFT, cryptocurrency, etc," he had said.

According to industry sources, Sony Pictures Networks India (SPNI), which had the IPL TV rights for the first 10 years, had made a sizeable profit on its Rs 8200 crore payout for the broadcast rights. SPNI had bet on IPL when it was an untested property. It had reaped the benefits of taking an early bet on the IPL.

Disney-owned Star India, which is the incumbent media rights holder, is projected to make a profit on its investments in the IPL. At Rs 16,347.5 crore, the company had bid almost double of what Sony had paid for the 10-year TV rights. Unlike Sony, Star owns the global media rights across TV, digital, and radio.

Link: https://www.exchange4media.com/ipl-news/ipl-media-rights-will-it-be-winners-curse-118749.html

Comments: I wonder what Cricketjoshila and other Indian posters feel about the points made in this article

 

[JaDed]

So is the opinion that there should be a limit? This logistics is for the company to decide. Also that’s a lot of money don't think it will go for that much!

 

[cricketjoshila]

IPL Media Rights: Will it be a winner’s curse?

Experts question the financial viability of owning IPL media rights if the value reaches Rs 40,000 crore to Rs 50,000 crore due to a bidding war among Star, Sony-Zee, Reliance and Amazon

by Javed Farooqui

Updated: Mar 1, 2022 9:09 AM

As the D-Day for the Indian Premier League (IPL) media rights auction inches closer, the speculation about the likely value of the next five-year cycle for the cash-rich league is getting wilder by the day. As per market speculation, the IPL media rights could fetch anything from Rs 30,000 crore to Rs 50,000 crore.

However, the question that begs an answer is how will the future winner of the IPL media rights recover this mind-boggling investment in the next five years.

According to a senior advertising executive with a top media firm, the IPL might become a winner's curse if the bidding war becomes too intense. "If there is a bidding war for the IPL media rights, it might become a winner's curse. While we are talking about Disney Star, Sony-Zee, and Jio-Viacom18, there is a distinct possibility that a new player might come and upset the calculations of traditional media companies. Digital rights of IPL will see huge appreciation which will be difficult to recover in the next five years. IPL is very important for broadcasters who want to strengthen their OTT play. Disney+ Hotstar was built on the back of IPL digital rights," he stated.

He also noted that TV will continue to be a mainstay of revenue monetisation even as digital is catching up fast. "Even for the next two years, the IPL monetisation will be split 80:20 in favour of TV. That said, the percentage may start switching with each passing year. Initially, even 5% of the revenue was not coming from digital whereas today it has touched 10%. So there has been a massive swing in favour of digital monetisation on IPL. This is an irreversible trend that will change the overall revenue mix. Digital monetisation will depend on the kind of base that streaming platforms and Connected TV attain five years down the line."

The executive also noted that the IPL will become a tough proposition to monetise if the TV and digital rights get split between two different players. "If the media rights get bifurcated between multiple players, it will spell doom for the rights owners. For monetising IPL to the optimum level, the winner needs to win the composite media rights. Having the media rights will allow the winner to create a walled garden around the IPL."

Currently, a large chunk of the IPL revenue comes from TV broadcasting across advertising and subscription revenue. Digital has also emerged as a key medium of monetisation even though its contribution remains significantly lower than TV. However, monetisation from digital is expected to see a significant jump in the years to come as audiences spend more time on the mobile screen.

That being said, experts question the financial viability of owning IPL media rights if the value reaches Rs 40,000 crore to Rs 50,000 crore due to a bidding war among Star, Sony-Zee, and Reliance, with Amazon being the surprise element.

At the above-mentioned value, the annual payout works out to Rs 8,000-10,000 crore. For the current rights cycle, Star's average yearly payout to the Board of Control for Cricket in India (BCCI) is Rs 3,270 crore for 60 matches or Rs 54.49 crore per match. In the final year, the payout will jump to Rs 4,032 crore due to the addition of 14 new matches.

IPL is already the costliest media property in India to advertise. An advertiser will have to shell out Rs 14 lakh for airing a 10-second ad during IPL. The price of a mid-roll video ad on OTT is Rs 210 CPM (000). On the TV distribution front, the IPL gives a huge boost to the overall channel bouquet and allows the rights owner to collect higher subscription revenue from the market. IPL is also a key reason why Disney+ Hotstar is miles ahead of its OTT competitors in the paid subscriber game.

But a sports media executive noted that there is a limit to which IPL ad rates will increase. He further stated that the bare minimum outlays required for advertising on IPL is so big that very few companies can afford it. "Everyone is talking up the numbers for IPL, but the challenge is not what your Excel Sheet models show. The question to ask is if there is so much money in the market for one event. It is easy to talk about Rs 40,000 crore for IPL, but the fact of the matter is that earning Rs 8000 crore every year is not a mean task. The ad inventory will not see a drastic change in the next five years after factoring in the additional matches. At some point, the advertisers will also question the rationale behind increasing the ad rates every year," the executive said.

He also noted that the advertising outlays for IPL are expected to go up as the number of games sees an increase. "At a very basic level, an advertiser will have to commit an outlay of Rs 30 crore even if they take a bare minimum of four spots of 10 seconds each at Rs 12.5 lakh per 10 seconds in every match for 60 matches. When you make it 94 matches, the same Rs 30 crore investment will become Rs 47 crore over a higher number of matches including afternoon games. How many brands are there in India who can start with a Rs 50 crore investment over six weeks? That is where the problem starts," he stated.

While the IPL media rights winner will have more ad inventory to sell across 94 games, the bigger challenge will be the increase in the number of afternoon games which is not necessarily good for a broadcaster due to low viewership in this time slot compared to the prime-time games.

"Now the question before an advertiser is if they spend so much on a six-week property or spend the same money on entertainment, news, digital, etc.? For the same investment, they can get a lot more of advertising opportunities. vivo had overbid for IPL title sponsorship. Since they realised that they had overbid, they gave up the title sponsorship to Tata Group which got it at a huge discount," the executive said.

Also, given the whopping amount of money that the bidder will have to pay to acquire the IPL media rights, whoever wins it will not have any money to invest in other bigger sports properties, like the ICC and BCCI, slated later for the year.

Compounding problems for sports broadcasters is the price regulation put in place by the Telecom Regulatory Authority of India (TRAI) in the form of the New Tariff Order (NTO) 2.0. As per the new pricing regulation, a broadcaster cannot price a channel above Rs 12 if it has to be included in a bouquet. The broadcasters have not been able to increase the price of their channels for the last two years due to the NTO 2.0 and the subsequent court cases. The TRAI is expected to float a new consultation paper to look into the concerns of the broadcasters.

"For sports broadcasters, one of the worries is the NTO 2.0 which caps the pricing of the channels. When bidders are making their revenue projections for the IPL, they will factor in the likely impact of the pricing cap on the subscription revenue. Sports broadcasting business globally is driven by pay-TV revenue, unlike India," a sports broadcasting expert said.

He noted that TV will continue to drive IPL monetisation in the short term as the revenue contribution from digital is still not commensurate with the investments. "Even today, most players would assign 75-80% of the media rights value to TV because all said and done the monetisation mainly happens on TV. If you look at OTT, most of the players are running on the freemium model. Netflix, which is a pure-play SVOD player, has still not been able to crack the Indian market due to costly subscription rates which were brought down recently. While everyone is talking about digital, the monetisation is yet to catch up with TV. The monetisation game will be different only if someone like Reliance Jio gets it because they own the pipe. For Jio, the digital rights of IPL will be a shot in the arm to grow data consumption," he added.

Triplecom Media iTap Founder-CEO Kunal Dasgupta believes that the NTO 2.0 will not have much of an impact on monetisation since the Indian sports broadcasters rely more on advertising revenue. "I don't think NTO 2.0 will have an impact on sports monetisation because distribution contributes 25% to the overall revenue of sports broadcasters while advertising still comprises 75%. Even under NTO, the broadcaster will charge his pound of flesh by bundling the channels."

Dasgupta added that the winner of IPL rights will have to reimagine how the property is monetised. "Sports NFTs can become a big revenue stream going forward. NFT is all about sharing, so the media rights owner and the franchises will have to work together to realise its true potential."

In an earlier interaction, he had stated that IPL will become a loss-making property for the next five years as recovering Rs 40,000 crore will be a daunting task. "Over five years, the IPL winner will have to be ready to lose at least Rs 10,000 crore unless someone monetises it smartly particularly on digital. There are so many ways to monetise IPL on digital like NFT, cryptocurrency, etc," he had said.

According to industry sources, Sony Pictures Networks India (SPNI), which had the IPL TV rights for the first 10 years, had made a sizeable profit on its Rs 8200 crore payout for the broadcast rights. SPNI had bet on IPL when it was an untested property. It had reaped the benefits of taking an early bet on the IPL.

Disney-owned Star India, which is the incumbent media rights holder, is projected to make a profit on its investments in the IPL. At Rs 16,347.5 crore, the company had bid almost double of what Sony had paid for the 10-year TV rights. Unlike Sony, Star owns the global media rights across TV, digital, and radio.

Link: https://www.exchange4media.com/ipl-news/ipl-media-rights-will-it-be-winners-curse-118749.html

Comments: I wonder what Cricketjoshila and other Indian posters feel about the points made in this article

Hotstar has 40mn customers in India, mainly on the back of IPL.

The next is Amazon with 20mn. If they win the rights, and their subscribers reach 40mn. Then these additional 20mn @1499 inr per year bring in 2bn over next 5 years. Ad revenues additional.



So a 5bn usd for combined OTT and Tv rights isnt too much even by current rates.