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ICC’s complex media rights auction strategy at test
While the IPL’s value tripled from the last cycle, there are too many variables at play in ICC’s closed bidding, making its growth trajectory difficult to predict
On Friday, leading Indian broadcasters will take judgement calls on what World Cups in cricket are worth. These competitions are now vying for market attention with a bigger, grander Indian Premier League, whose value tripled from the last rights cycle during the e-auction in June.
There are as many as eight world events in the upcoming media rights cycle - 2024-31, one every year. In the pre-T20 era, there was only the ODI World Cup, played once every four years and the Champions trophy, billed as the mini-World Cup, was introduced in 1998. After the T20 revolution in 2007, the International Cricket Council (ICC) began expanding its events cycle. The Indian cricket board – BCCI, by far the most financially robust body saw too many ICC events as a roadblock to member boards’ aspirations of being self-sufficient.
Camouflaged behind those idealistic positions is a cut-throat urge to control cricket’s finances. The BCCI may only be one of the 12 Test playing nations but commands considerable clout. On paper, the ICC speaks as a governing body that caters to 94 Associates, but in essence, becomes a vehicle for other influential member boards to counter-balance BCCI’s advance in policy matters. For the record, 85 % of ICC’s revenue is divided amongst the Test-playing nations.
A decision on how many ICC events to have are therefore dictated by which opinion prevails in the boardroom. When the BCCI governed by Court appointed administrators (2017-19) was on a weak footing, the ICC added more global events to the calendar.
Will having a World Cup every year devalue its marquee status? ICC does not think so. “Having an event-a-year helps our broadcast and commercial partners leverage their investment on an annual basis,” ICC CEO Geoff Allardice said, last year.
FRACTIOUS BUILD UP
The rights are being sold on a territory-wise basis, with the Indian market first in the queue – its share amounts to more than 70 % of the proceeds of the existing rights. The same set of broadcasters who splashed big cash for the IPL, two months back, will be at play again. The build-up has been tense.
While the BCCI sold IPL rights through an e-auction, the ICC have chosen the traditional closed bidding route. Viacom 18, who broke the bank for IPL’s digital rights, have in their internal communications to the ICC cited the ‘lack of transparency’ and called for e-auctions. On Wednesday, citing ‘process auditor’ PricewaterhouseCoopers (PWC)’s exit from the process, they threatened non-participation. The other Indian broadcasters – Disney Star, Sony and Zee are also known to be unhappy but it’s not known how far they will go with their dissent.
An ICC source played down the issue saying PWC’s role as ‘an independent third party to hold the financial bids securely between submission and opening’ ceased once it was decided that bids would be submitted and opened simultaneously. ‘There would still be independent oversight of the process,” the source said.
Earlier, all four broadcasters had written to the ICC questioning the unknowns in the tender process. Subsequently, the ICC offered clarifications, communicating the asking price - $1.429 billion ( ₹11,408 crores) for 4 years and a multiplier of 2.8 times (approx. ₹32,000 crores) for an eight-year bid. It was also made known to the bidders that an e-auction would be needed if the value of the leading two bids were within 10 percent of each other.
“The ICC has gone for the element of the unknown. In closed bidding, if the bidders don’t want to miss out, they can put in a big number,” a source familiar with the matter said.
FOLLOW THE LEADER, IPL
While comparisons of ICC events with IPL are unequal – IPL offered 410 matches in 5 years, ICC only has 52 India games in 8 years – the same broadcaster’s pool makes them competing or complementary entities, depending on how one sees things. The winning bid is expected to be a reflection of where the broadcasters view ICC events in their portfolio. The BCCI bilateral rights will also go for sale, next year.
“People often talk about ICC rights as if they are something external to members. They are member’s rights as well,” Anurag Dahiya, Chief Commercial Officer, ICC said last month. “On the strategy and timing to come after the IPL, we spent months on various aspects of it, working together with the BCCI. None of us in the federation space were surprised by what the IPL was able to do.”
The financial bids will be opened on Friday. Assuming there is no need for a second round of bidding through e-auction, the winners will be announced, after a board meeting on Saturday.
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