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BCCI e-auction to determine bilateral cricket’s future value
The outcome of Thursday’s sale may depend on the three competing broadcasters’ outlook towards exclusivity
‘All good things have a price,’ Uday Shankar, then Star India chairman had declared when he splashed ₹ 6138 crore -- ₹ 60.18 crore per match – in 2018 to retain the rights for Indian bilateral cricket, on TV and mobile. Star completed a hat-trick of big cricket acquisitions, after buying International Cricket Council (ICC) and Indian Premier League (IPL) rights.
Was he to know that at the backend of the contract India would be playing bilateral T20Is without Rohit Sharma and Virat Kohli, for the stars had to rest in an ODI World Cup year? This from a time when broadcast money would dictate squad strength in bilateral cricket.
And that the cricket landscape would change so much that there would be an ICC world event every year, IPL value would hit the roof, and a home series against New Zealand and Sri Lanka in 2023, worth ₹ 78.9 crore per match – the contract was back-heavy – would become virtually loss-making?
Which is why broadcast executives on the media rights auction table are expected to be risk-takers and soothsayers in equal measure.
E-AUCTION
The Indian cricket board (BCCI) has had three test runs (kit, jersey and title sponsorship renewals) in the past six months to gauge what the market thinks about the future of India’s bilateral cricket. For kit and jersey rights valuations dipped slightly while the title rights sale exceeded expectations. Still, the collective proceeds are less than ₹1,000 crore.
It’s the media rights – key driver of revenue – that matter the most and Thursday will be judgement day when the future value of India’s bilateral cricket (2023-28) will be decided by an e-auction. BCCI has set a collective base price of ₹45 crore (TV ₹20 cr + ₹25 crore) per match – 25% discounted value to the existing price. Although BCCI has reserved the right to cancel the bidding if the final valuation does not cross ₹60 crore per match, it tells a story.
“It’s a clear indication that they are nervous about how many people will come to the party. At least you are creating competition,” Harish Thawani, whose Nimbus Communications’ $612 million winning bid for BCCI’s 2006-09 bilateral rights was the biggest bid for the times, said.
Shankar will now be driving the auction strategy for Reliance-controlled Viacom 18 where he holds 15% stake with James Murdoch. It is widely believed they will make a big push to acquire the rights. “Any rights at the right business and brand matrix are of our interest and the BCCI rights are certainly one of those big ones,” Anil Jayaraj, CEO, Viacom 18 Sports, said a few months back.
Whether they target only digital to boost Jio Cinema and further dent Hotstar subscriptions or also pitch for TV rights may influence the final value. Sony is expected to be interested in TV rights, especially after receiving a clearance for merger with Zee (who have a strong network). The merged entity will have TV rights for ICC events 2024 onwards; Sony already holds the rights for cricket in England, Pakistan, Sri Lanka and Bangladesh.
For all of 2023, the messaging from Viacom 18 is that TV will die. Thawani said: “I don’t think, certainly not in the next five years because internet is so underpenetrated (in India). Viacom 18 might surprise everybody with a TV bid. Otherwise, their Sports 18 channel has no future.”
Many others in broadcast believe that cost recovery becomes difficult if TV and digital rights go to two warring broadcasters. This year’s IPL showed that. “If I wear my old broadcaster’s hat, I will acquire both,” said Rajesh Sethi, former CEO, Ten Sports. “That way I will not lose digital subscribers and will be able to package it better by bundling it together for monetisation.”
The third big player is previous holder Disney Star. The word in the industry is that Disney’s Burbank headquarters wants to exit or is looking for partners in the price sensitive Indian market. But they are invested for the next four years with ICC’s digital rights, IPL’s TV rights and Australia rights where the India tour regularly. A round-the-year India bilateral cricket gives them an avenue to boost digital subscriptions.
WHAT’S FAIR VALUE?
BCCI has tactically done away with the consolidated bid category, which may force Disney Star and Viacom 18 to also bid for TV rights and Sony for digital, if they seek exclusivity.
Also, BCCI hopes that the bundled offering – 88 matches (25 Tests, 27 ODIs, 36 T20Is) and a more compact future tours programme will address the waning interest in ODIs and Tests. If the collective bidding hits ₹60 crore per match, that would bring ₹5,280 crore to BCCI’s coffers. BCCI’s proceeds from IPL media rights stand at ₹48,390 crore – ₹118 crore per match.
“IPL is different, but the bilateral value will 100% go up. How much, we don’t know,” Sourav Ganguly, former BCCI president, said.
