IPL’s next big battle royal

The underdogs had a field day in Indian Premier League (IPL) 15, which garnered a record sponsorship of over ₹1,000 crore, and a new title sponsor in the Tatas. New franchise Gujarat Titans defied all odds to win the tournament, even as fancied franchises Mumbai Indians and Chennai Super Kings shocked fans with their poor run.

Will the next battle of IPL — the auction for media rights on June 12 — also throw similar surprises? A lot rides on these auctions, touted to be worth nearly ₹50,000 crore, for the 10-odd companies that have picked up the bid documents, especially for incumbent Disney Star.

Media consultants reckon the combined rights (global TV rights plus digital) could go for anywhere between ₹40,000 crore and ₹ 50,000 crore — a whopping rise compared to the ₹16,347.50 crore that Star had picked it up in 2018 for.

Although the declining viewership of the Tata IPL — a 33% dip in TV eyeballs — and discounted ad rates have led to questions about the high price of media rights, the expert view is that it is a fair hike.

The asking price

A senior media analyst justifies the increase by pointing out that the previous winning bid five years ago was for 60 matches. Now there are 74 matches plus the year-on-year inflationary increase. Also he says digital viewership rights had been under indexed before.

Also, broadcasters can use the IPL rights to create a lot of other programming and gain viewers. As advertising firm Rediffusion’s chief Sandeep Goyal argues, “The ascendancy of the media companies and groups is in many ways dictated by whether they have the IPL rights. For instance, for the years that Star India had the rights, they outdistanced all competitors by many miles.”

Shailesh Kapoor, founder and CEO of Ormax Media, says there is simply no other content with the kind of eyeballs that IPL gets — back in the day you still had a Saas Bahu or a KBC. Also as he points out IPL is the engine that drives digital subscriptions. For Hotstar, India reportedly contributes as much as 30% of its global revenues. By contrast for Amazon and Netflix, India yields barely five to 10% of their revenues. IPL is the differentiating factor.

For the franchise owners too, a lot rides on the IPL media rights as a big chunk of their revenues hinge on this. Dabur’s Mohit Burman, who is co-owner of the Punjab Kings franchise, points out that given the steep amounts that owners of the new Lucknow and Gujarat teams forked out to buy these franchises, (₹7,090 crore and ₹5,625 crore), they must have factored in the upcoming media rights.

But Mr. Burman sounds a cautionary note, saying the Board of Control for Cricket in India (BCCI) should not overprice the media rights. “It should not be that media rights are bought by companies at such huge values that it becomes unaffordable for advertisers and that it becomes difficult for media companies to recoup their money. “

Viewership dip

While IPL 15 may have broken all records in terms of sponsorships, recessionary trends impacted advertising rates. Media planners feel it would be hard to attract advertising in the next edition. The viewership dip in IPL 15 will not help either. There are concerns that the 10 team format is causing fatigue.

Vinit Karnik, head, Sports, Esports and Entertainment, GroupM South Asia, says lack of team loyalties has played a part in dip. “We had a mega auction and hence key players moved teams and it will take a season to build team loyalties, especially for the two new teams.”

Mr. Goyal feels IPL needs a serious rethink in terms of format, talent and innovations. A suggestion from Mr. Burman is to take the league global to expand its audience base.

Who could get rights?

Finally, according to experts, the rights will go to those who are most desperate. And these seem to be Star and the new Uday Shanker -Viacom Sports 18 combine.

For Star, Zee or Sony, feels Mr. Goyal, if they could get the cricket rights, it would have far reaching impact across their network of channels including general entertainment. “There is cross pollination of advantage across the network that is priceless.”

However, this year, the BCCI has thrown many curve balls in its bid documents — such as a controversial special non-exclusive package (Bundle D) which allows those who may not win the media rights access to certain matches digitally. This could open a window for pure digital players like Amazon and Apple.

It is game on!