Aiming for Big Bucks Again: On Thursday, August 31st, the Board of Control for Cricket in India (BCCI) is all set to conduct an auction for the media rights encompassing both television (TV) and digital platforms. These rights cover the bilateral matches scheduled within the country for the next five years. The anticipation lies in the hope that the trio of bidders, namely Disney Star, Viacom18, and Sony Pictures Networks India (SPNI), will once again display eagerness to invest generously. In the previous instance of such fervor, BCCI secured a staggering ₹48,390 crore by selling IPL (Indian Premier League) rights for the 2023-27 period. This sum included a substantial ₹23,575 crore from Disney Star for TV rights and an equally impressive ₹23,757 crore from Viacom18 for exclusive digital rights. Furthermore, Disney Star participated actively in an ICC (International Cricket Council) rights auction, securing the rights for a substantial $3.03 billion. It later retained digital rights while sub-licensing TV rights to Zee Entertainment Enterprises for approximately $1.4 billion.
The upcoming auction offers two distinct packages. One encompasses TV rights for the Indian subcontinent, with a starting price of ₹20 crore per match. The other package consists of digital rights and rights for the rest of the world, commencing at a base price of ₹25 crore per match. Over the next five years, India is scheduled to engage in a total of 88 matches, spanning 25 Tests, 27 ODIs, and 36 T20Is, as per the current FTP (future tour programme).
Optimism Meets Realism: The BCCI, for the first time, has established a reserve price that is 25% lower than the average per-match price from the previous cycle (₹60 crore per match). The board's optimism hinges on the enduring popularity of Indian cricket and the fierce bidding witnessed for IPL and ICC tournament rights. Even if the average price from the prior cycle is maintained, the board is poised to collect ₹5,280 crore over the next five years from Indian cricket. However, the internal target is a substantial ₹100 crore per match, equating to ₹8,800 crore.
Balancing Act in Bidding Strategies: Industry experts speculate that reaching the target could be challenging, given that the bidding companies are now scrutinizing returns on their significant investments in IPL and ICC rights. While bidders might not display aggressive bidding for TV rights based on business logic, Viacom18, expected to compete vigorously for digital rights, must ensure TV bidding remains competitive enough to prevent rivals from securing them at or near the base price.
Company Dynamics in Play: The landscape involves Viacom18, which already possesses IPL digital rights, eyeing the digital rights for India matches. SPNI, currently undergoing a merger with ZEE, holds ICC TV rights and has managed its sports portfolio without Indian cricket since 2018. Disney Star, once in control of rights for BCCI matches, the IPL, and ICC matches, now retains TV rights only for the IPL and digital rights solely for ICC tournaments. The strategic moves of these players are underscored by their respective business objectives.
Timing and Shifting Market: Experts suggest that the timing of the rights auction might have missed an optimal window, as the market dynamics have altered. An earlier tender release, following the IPL or ICC auctions, could have potentially fetched higher prices. However, shifting advertising revenues, coupled with tax burdens and decreased interest in bilateral series, have altered the landscape. Ratings have also faced challenges, with Australian and English tours of India drawing substantial viewership compared to other matches.
The BCCI's Weight in Sports: The BCCI stands as one of the most affluent sports organizations globally, with IPL broadcasting rights valued at $15.5 million per match, second only to the NFL (National Football League) at $17 million. The EPL and MLB, at $11 million per match, are significant but have more matches in their seasons. In FY2022, the BCCI reported a revenue of ₹7,606 crore, with expenses of ₹3,064 crore and an income tax payment of ₹1,159 crore. The five-year period from 2017-2022 saw a combined revenue of ₹27,411 crore.
The Final Question: The paramount question remains: Will bidders be guided by sound business judgment or ego-driven decisions in this auction?
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