IPL media rights auction sparks frenzied bidding on day one

The media rights of the Indian Premier League saw intense bidding on the first day of the auction with the total bid amount crossing ₹43,000 crore.

The top bid for TV broadcasting rights was ₹23,370 crore, which was 16.3 per cent higher than the reserve price, while digital streaming rights rose by 45 per cent to ₹19,680 crore. This is more than double the last auction, when Star India bagged the rights of around ₹17,000 crore for the five-year period that ended with this year’s IPL.

auction in progress

The auction will continue on Monday but will fetch more than ₹105 crore per match, compared to ₹54.5 crore per match, even when the Board of Control for Cricket in India is close to bidding at current levels.

Analysts predict that for the first time ever, digital streaming rights may be sold for a price comparable to TV broadcast rights.

Karan Taurani of Elara Capital says business Line“The numbers are exactly in line with our estimate, wherein we were expecting a 30-35 per cent premium over the base price for TV and 80-85 per cent premium over the base price for digital.”

Taurani said, “We believe that on a cost per match basis, the digital segment will be on par with TV, and we do not see it moving beyond TV, as TV still has a lot of FMCG advertisers and strong growth. Despite concerns over digital monetization and subscriptions.”

The bidding process is expected to pick up on the second day, and with no final date set by the BCCI, the bidding process could go on for a few days. Bidding on package C (a bouquet of 18 matches without any exclusive digital rights) and package D (world rights for TV and digital) can only begin after bidding for the TV and digital rights. Taurani estimates that these categories will also be at least 40-45 per cent higher than the base price.

seven participants

The e-auction is likely to have seven participants, however, it is likely to be a four-way match between Mukesh Ambani-backed Viacom18, Sony, Zee and the current Disney star.

The BCCI has not disclosed which of the seven contestants are in the lead at the moment. It is also not known whether the same broadcaster is the leader in both the television and digital categories. However, if the same broadcaster gets both the rights, they will pay at least ₹105 crore per match.

Brand expert Santosh N, managing partner, D&P Advisory, said, “It could be priced slightly higher. He further added, “Broadcasters earn ₹3,000 crore in advertising revenue per season, and even if you add IPL’s intangible revenues such as increased reach, market share dominance, you can earn around ₹6,000 crore in annual revenue. At this price point, the cost of acquiring sports assets will touch an annual amount of ₹8,000 crore, and as a broadcaster it may be difficult to recover that cost.

Santosh further said that new age businesses like digital broadcasting can guarantee cost-plus growth at this point of time, and this could be the reason why broadcasters are willing to spend huge sums of money.

Overall, the trends on day one suggest that the Premier Cricket League will get a hefty buck even if the drop in IPL viewership and Amazon’s withdrawal from the bidding race indicate otherwise.

Published on

12 June 2022