Star India, Sony, 22 others in race to bag IPL rights

BCCI identifies 7 territories to award rights instead of 2 - India and rest of the world - earlier

After multiple pit-stops, the Board of Control for Cricket in India (BCCI) is finally on its way to announce the media rights for the next leg of the Vivo Indian Premier League (IPL). A total of 24 entities have picked up the tender document, with eyes on multiple territory rights.

The BCCI has made some key changes to the bid process this time. In 2008 — when the league was launched — the rights were awarded in two territories, India and rest of the world. This time, the administrator has identified seven territories that are revenue churners for the BCCI. These include India, West Asia, Africa, Europe, America and rest of the world.

Another change is that in India, this year, television and digital rights would be auctioned separately. Digital streaming came into focus only in the latter half of the IPL’s history when Hotstar, the over-the-top platform from Star India, built viewership using the IPL.

Rahul Johri, chief executive officer, BCCI, said, “We have separated the territories based on revenue. Earlier, the rights were just for India and the rest of the world. Now, by dividing the territories, we have made sure there is greater transparency in who holds what right. Earlier, one company could have the rights to the rest of the world and then farm them out to different companies in different territories.”

The BCCI has given the option to bid for global rights as well. “For every territory, the highest number will be taken. If there is a global bid, and it happens to be bigger than the sum of all the parts, then that company will win it. Else, the highest bid in each territory will be awarded the rights,” Johri said.

This time, interested parties are bidding for rights for the next five years (2018-22) instead of 10 years, as was the case since the launch of the tournament. The sponsorship rights, awarded earlier this year, were already following a five-year cycle, but the media rights will now be refreshed faster. Johri explained that this was an attempt to keep up with the changing dynamics in the broadcasting space.

A shorter cycle for media rights also means that the appreciation on the rights fee will be greater. “That’s obvious. The sum of parts will be greater than the whole and so the appreciation of media rights every five years, will be more than if done (bids called) every 10 years. This is, in turn, is beneficial to all the franchises since both the sponsorship revenue and the media rights’ fees form part of the central revenue pool that the franchises have access to,” Johri said.

The sponsorship rights to the IPL saw a massive jump in value when Vivo retained the title sponsorship for Rs 2,200 crore (for five years). The Chinese handset maker was earlier paying the BCCI Rs 100 crore a year (for the 2016 and 2017 editions) and this new bid meant a mark-up of 4.4 times. The bid amount exceeded the reserve price (Rs 120 crore per year) for the sponsorship rights by a huge margin as well.

Johri is confident that the media rights auction would see competitive bidding, leading to a significant appreciation in the rights fee. He, however, refrained from putting a number to it.

A recent report from Duff and Phelps estimated that the TV rights could fetch the BCCI close $1.8 billion (Rs 11,540 crore) for five years, while the digital rights could fetch $210 million (Rs 1,346 crore). Sony’s deal with the BCCI for the TV rights to the IPL was for Rs 8,200 crore for nine years (2009-2017).