All you need to know about the sale of IPL Media Rights

Update: As per reports, Disney (Star Sports) has retained the TV broadcasting rights for the Indian subcontinent. Reportedly, they paid Rs 23,575 crore for IPL TV rights.

As per the reports, Viacom18 is to bag the Digital Media Rights for IPL 2023 and onwards, and Sony Pictures Network might bag the TV Broadcasting Rights, here are the series of events of how the tender and bidding process for India's most prominent sporting league unfolded.

Here is a timeline of all the events that concluded with the sale of IPL media rights.

Invitation To Tender For Media Rights For 2023-2027

On 29 March 2022 Board of Control for Cricket in India (BCCI) announced the invitation to tender media rights to the Indian Premier League Seasons for the period of 2023-2027. The Governing Council of the IPL invited bids through a tender process.

The detailed terms and conditions governing the tender process including eligibility requirements, process for submissions of bids, proposed media rights packages, obligations, etc. were made available to reputed entities through the ‘Invitation to Tender’ (“ITT”) document, which could be accessed in exchange for a non-refundable fee of 25,00,000 INR.

E-Auction

Disney+ Hotstar, Viacom18, Amazon, Zee Entertainment Enterprises, Apple Inc, Dream Sports Inc, Sony Group Corp, Alphabet Inc, and Super Sport (South Africa) were touted to be a few of the major bidders. However, Amazon backed out on Friday before the Media Auction.

In a first-of-its-kind affair, the tender process continued through an e-Auction, starting off on June 12, 2022, the auction continued until all bids were placed.

The E-Auction will be conducted for 74 games per season between 2023-2027. The number of matches might be increased to 94 in the last two years. There are four specific packages in which e-auction will be conducted.

Package A includes Indian sub-continent exclusive TV Broadcast Rights and the Package B includes the Digital rights for the Indian sub-continent. Package C is for selected 18 games that include the opening game, final, three play-offs, and a few weekend double headers in each season for digital media and Package D is for International Broadcasting Rights TV and digital rights combined.

IPL Media Rights Categories

The Media Rights for IPL have been bifurcated into the following major categories: Digital Rights, Domestic Broadcast Rights, International Broadcasting Rights, and Non-Exclusive Rights. The media rights value grew 2.5X times from what Star India paid in 2017.

Digital Rights

Estimated to be worth 33 Crores INR for each game, 12,210 Crores INR, for the tournament, and 2,442 Crores INR for the year.

International Broadcasting Rights

The base fee for broadcasting rights in the Indian subcontinent is touted to be 49 Crores INR for each game and 18,130 Crores INR for a period of five years with 74 matches in the tournament, with 3,626 Crores INR per year.

Also Read: James Murdoch and Uday Shankar invest 13,500 Cr in Viacom18

Non-Exclusive Rights

With a reserve price of 16 Crores INR for each game, and the total package costing 1,440 Crores INR, the owner of these rights will own rights for 18 matches which includes the opening day, four playoff games, and 13 evening matches on double-header days.

The Winner Of IPL Media Rights For 2023-2027

Package A (TV Rights) and Package B (Digital Rights) have been won by different entities. From this year onwards, IPL will have two separate broadcasters. TV goes at Rs 23,575 crore, i.e Rs 57.5 crore per match, and Digital goes at Rs 20,500 crore i.e Rs 50 crore per match, making a total of Rs 44,075 crore for 410 matches.

According to multiple reports, Viacom18 has been speculated to have bagged the digital media rights for IPL Seasons 2023-2027, and Sony Pictures Network might have won the TV media rights for the same period, through the e-Auction today.

Update: As per reports, Disney (Star Sports) has retained the TV broadcasting rights for the Indian subcontinent. Reportedly, they paid Rs 23,575 crore for IPL TV rights.

The Backdrop

Sony Pictures Network was one of the first owners of IPL Media Rights and held it for 9 years until 2017, winning with a bid of 8,200 Crores INR.

Star India had owned the rights for the last five years since 2017, bought for 16,347.5 Cr INR, until BCCI put out the tender for IPL media rights for the next five years – 2023-2027. It had been speculated that the broadcasting rights would experience a 300% rise from their base price and based on past bids and practices the amount sums to 45,000 – 50,000 Cr INR.

In April 2022, Reliance Industries-owned Viacom18 entered into a strategic partnership with Bodhi Tree Systems headed by James Murdoch and Uday Shankar, with the partnership entailing an investment of INR 13,500 Cr in Viacom18, giving the company an estimate of 40% shareholding in the company.

Bodhi Tree Systems was devised to invest in media opportunities in South-East Asia, particularly in India. According to reports, the deal had itself been executed with an intent to bid on broadcast rights for the Indian Premier League cricket tournament.

The Impact On Advertising

The closing bid price of IPL Media Rights has a direct impact on the price of ad slots. The rising price of the media rights, would result in a higher price of ad lots, and consequently having an effect on creative agencies who would face higher contention, and pressure to deliver creative campaigns that suffice the investment in this advertising platform.

Several speculations around the viewership and interest in the last season of IPL not being up to the mark had emerged, but IPL 15 saw an 11% increase in ad volume per channel, despite the number of categories, advertisers, and brands dropping from IPL 14, according to a TAM report.

Despite the sky-rocketing prices of ad slots, and speculations around dipping interest, advertising may remain unaffected in terms of ad volume, giving in to the PAN-India reach, the addition of two new teams increasing the number of matches, and the sporting league being an avenue facilitating major awareness campaigns for homegrown and new-age brands.

This also leaves IPL ad investments to brands with deeper pockets.