Star India retains Pro Kabaddi League media rights for Rs 181 crore

Star India has retained the media rights (TV, gaming, digital and consolidated rights) of the prestigious Pro Kabaddi League (PKL) by paying Rs 181 crore for the next five years — the minimum base price fixed in the tender— as it was the sole bidder.

However, some PKL franchisees, who were expecting a bidding battle similar to what happens in the case of the Indian Premier League (IPL), are alleging that “fair value” of the media rights has not been realised. This despite the fact that Star’s bid was double of the Rs 91 crore that it had paid for PKL’s media rights last season.   

The franchisees have also slammed the organisers for keeping them out of the core committee on auctions. They allege that the organisers framed rules favouring only broadcasters and made it difficult for startups, OTT platforms and gaming platforms to participate in the auction.

Sources say that the base price for bidding was arrived at on the basis of Star’s negotiated price offer, which was rejected by the franchisees. The auction route was pushed through after this. Franchise owners expected many companies to bid for what they consider to be the most attractive tournament after IPL. (PKL has over 300 million viewers.) But after showing initial interest, none except Star participated in the auction.

Ronnie Screwvala, one of the PKL franchisees, had repeatedly raised the issue of conflict of interest, as Star India bought a 74 per cent stake in 2015 in Mashal Sports, which organises the league with other partners like industrialist Anand Mahindra. 

Sources say that while Sony, Dream 11, Reliance, Cartamedia, and ITW Global picked up the tender, submitted clarifications and even participated in the e-auction training, eventually, only Star submitted the bid.  

Screwvala has alleged that franchisees were kept out of the core committee even though 80 per cent of the economic benefit from the media rights goes to them. They were denied the chance to drive the right parameters for the auction in order to attract more participants, he says.

Screwvala has also charged Mashal with having a “broadcaster bias”. “Startups and gaming companies were rejected. The bid document says that a consolidated bidder should have qualification in all areas like OTT and gaming and broadcasting. This clause restricted all others like Amazon and Dream11 from bidding. Star/Mashal knew that if it comes down to winning a bid, you need to be a broadcaster,” Screwvala says.

According to him, that left Sony as the only potential bidder, as Zee has a non-compete clause with Sony after it sold Ten Sports to it and Viacom is not active. “But Sony would think twice about getting into a league that their key competitor owns,” he says.     

Sources close to Mashal say that if any participant was interested, they would have picked up the tender, and if there were concerns, they could have submitted clarifications and, if the request had merit, could have got Mashal to change the scope. Hence, those who did not participate were probably led by commercial reasons, the sources add. 

Insiders also point out that the league is still in an investment phase and it would be wrong to make comparisons based on the valuation of IPL. Says Anupam Goswami, CEO of Mashal Sports: “PKL is the only league where franchise owners broke even in the second year of investment. In the case of IPL, franchise owners have only now started seeing returns on their investments — after about 10 plus years of continuous investment. The doubling of the fees will be a big fillip for PKL franchise owners.” 

The 12 teams who retain 80 per cent of the revenues from the media rights (20 per cent goes to Mashal), will now get Rs 12 crore every season, which is double of what they got in the last five years. For the franchisees, the biggest cost constitutes buying the team members, which is capped at Rs 4.4 crore. But even they concede that the eight initial franchisees are already making money.  

Mashal says that there were no bidding restrictions on OTT or gaming companies. Says Goswami: “The rights were broken into different packages like television, digital, gaming and a consolidated package, and each package had its relevant experience requirement. This was to attract category-specific players. Also, there was the flexibility of companies forming consortiums across packages.”