Something that brewed in the Indian sports and entertainment broadcast industry earlier this week could have massive ramifications for how world cricket is run. The Board of Control for Cricket in India (BCCI), the undisputed Big Dog of cricket, has long harnessed the nation’s unmatched passion for the sport. As the world’s richest cricket board, it has consistently dictated the market value of broadcast rights, with broadcasters clamouring to showcase some of the most bankable athletes on the planet.
But now, it seems there’s another Big Dog on the auction table. The USD 8.5 billion merger between Disney’s Star India and Reliance’s Viacom18 on November 14, 2024, has created a broadcasting juggernaut, poised to shake up the balance of power in Indian sports and entertainment.
One of BCCI’s primary revenue streams is the sale of broadcast rights for the Indian Premier League (IPL) and international and domestic matches hosted by the board. Even the International Cricket Council (ICC) depends heavily on revenue from media rights, especially in the Indian subcontinent region. India’s participation in major ICC events is a crucial driver. Consider the IPL media rights sale in 2022, for instance. The 2023–2027 media rights cycle saw a staggering 196 percent increase in value, soaring from Rs 16,347.5 crore (2018–2022) to Rs 48,390.5 crore. This dramatic surge was fuelled by intense competition between Viacom18 and Star India during the bidding process.
THE MERGER: A GAME-CHANGER?
Will we witness a similar spike, given the IPL’s ever-growing popularity? Uday Shankar, Vice Chairperson of the joint venture, discussed the merger’s potential impact on cricket revenues in an interview with India Today. While emphasising cricket’s continued importance as a market driver, Shankar expressed caution about the sustainability of these bidding wars in the future.
With a more extensive portfolio, the merged company can adopt a strategic approach to avoid overextending itself in the bidding process. Regarding the future of cricket rights, Shankar shared a measured perspective.
“Sports bodies globally have benefited and feasted on the deep, passionate loyalty of sports fans. They’ve capitalised on the fear of missing out (FOMO) that media companies face. We no longer suffer from FOMO. If we don’t bid for the next cycle of ICC rights, we can comfortably sit it out, and it won’t make a dent in our business.”
Imagine the implications if Hotstar and JioCinema, with their combined subscriber base of over 50 million, decided to sit out of the auction. Sony and Zee, other major players, have also vied for a share of cricket in the past. Additionally, new entrants, including non-traditional media houses and tech giants, are entering the picture. For example, Amazon Prime secured broadcasting rights for cricket in New Zealand, while Facebook and Netflix have tested the waters with sports broadcasts.
Netflix recently ventured into sports broadcasting, acquiring the rights to the much-anticipated boxing match between legend Mike Tyson and YouTuber-turned-boxer Jake Paul.
However, if key players opt to sit out and watch from the sidelines, cricket broadcast revenue growth could stagnate, which is a worrying prospect for the sport’s administrators.
“The breadth and depth of creative assets—across drama, movies, reality shows, Indian cricket, and international cricket—give us significant flexibility to move wisely,” Shankar said. “We don’t have to be desperate to bid for and win every single right.”
IPL MEDIA RIGHTS BIDDING 2023-27: A GLIMPSE
- TV rights: Rs 23,575 crore (Rs 57.40 per match)
- Digital rights: Rs 20,500 crore (Rs 50 per match)
- Digital (Non-exclusive 18 matches): Rs 3,258 crore (Rs 33.24 per match)
- Overseas: Rs 1058 crore (Rs 2.6 crore per match)
ONEROUS FINANCIAL LIABILITY
While the IPL remains a marquee property, Shankar is acutely aware of the financial burdens posed by the acquisition of cricket rights, especially for prestigious events like the ICC tournaments. Disney Star secured the ICC TV and digital rights for USD 3 billion for 2024–2027, a hefty investment that has placed significant pressure on broadcasters to deliver value.
“The broad thinking isâæ there are onerous financial liabilities on account of the cricket rights,” Shankar acknowledged. “We have to solve for that. We can only solve for that by growing the market and innovating in the advertising and monetising space. And we will do that. We will continue, we are committed to those rights, we have to service those rights, whatever the cost may be.”
Despite the financial strain, Shankar sees an opportunity to navigate through it.
“The bad news about cricket rights is that they are very expensive and they are awarded to the media companies or the broadcasters for a very short time. The good news is that they are awarded for a very short period. So, you can grit your teeth and plod your way through it,” he added, expressing confidence in their ability to manage the burden.
THE FUTURE OF CRICKET RIGHTS
Shankar is cautiously optimistic that the escalating prices for cricket rights may eventually stabilise. Despite the growing competition, there’s a possibility that valuations may become more reasonable in the coming years.
“I don’t know, but I hope so. In my experience, every time I have gone through a bidding process, I have thought ‘now sanity will prevail’. But, at the time of bidding, a few drunk sailors arrive every year. So, I hope so. Cricket, or for that matter, many other rights, have become very expensive,” Shankar quipped.
Yet, he remains firm in his belief that cricket is a highly valuable asset when acquired at the right price.
“I can tell you what we are focused on. Cricket is very useful. It’s a huge aggregator of viewership. People love it. It’s a great business, provided it is at a reasonable price and sensible terms. If that doesn’t happen, then obviously, we have to revisit that.”
EVOLVING COMPETITION
However, Shankar doesn’t rule out competition even now, adding that it’s important to not limit the definition of the market.
“One mistake we make is that the market has changed, but we continue to define the market in the traditional way. The traditional media companies are not only facing competition for viewership and monetisation among themselves, a large number of people are coming from outside and putting pressure.”
CRICKET BROADCASTING’S FUTURE
Shankar remains confident about the long-term prospects for cricket broadcasting in India, even with the challenges that market consolidation and rising prices bring.
“I don’t think that fear that the market has shrunk is true at all. The viewers are exercising choices, they will go where they find exciting content,” he said.
As new platforms and players enter the market, there is ample opportunity for growth, particularly in digital broadcasting.
The mighty cricket bodies, including the Indian cricket board and the ICC, will be keen on watching how the merged entity handles its cricket commitments.
When the bidding rights come up for sale for the next cycle, a lot could change. Or will it?
