Sep 05, 2017

Star wins IPL rights for US $2.55 b

The BCCI has bagged INR 16,347.5 crore (US$ 2.55 billion) for its IPL television and digital rights from a single bidder, Star India, which made a consolidated offer for rights worldwide.

The sale of the rights, which are for the five-year period from 2018 to 2022, is effectively the biggest television deal in cricket.

A total of 24 companies had bought the tender document but only 14 eventually bid at the event in Mumbai. The bids were for seven categories: television in India, digital in India, and rights for the USA, Europe, Middle East, Africa and the rest of the world. For the five international markets, the bids included both television and digital rights. Star won them all by making one consolidated global bid (INR 16,347.5 crore) - the only bidder to do so - that was larger than the sum of all the highest bids for each category (INR 15,819.51 crore).

Star's winning bid is a 158% increase in the media rights value for IPL broadcasting from the previous cycle. In 2009, Sony had bought television rights for US$ 1.63 billion for nine years from World Sports Group, which had bagged the rights for US$ 918 million from the BCCI for a ten-year period. That cycle came to an end in 2017. Star were the previous holders of digital rights in India as well, having paid INR 303 crore for a three-year digital rights deal (2015-17).

Star and Sony Pictures Network India were the only two eligible bidders for IPL rights to the Indian television market after the bids were technically evaluated on Monday.

"We believe that the IPL is a very powerful property, and we believe there is lots more value that can be created for fans of cricket and viewers through IPL on digital as well as on TV," Uday Shankar, chairman of Star India, said. "And we would remain very committed to make sure that the growth of sports in this country continues to be driven by the power of cricket."

As Shankar noted, the television and digital rights were "fiercely contested". The difference between Star's global bid and the total of the highest bid in each category was only INR 528.5 crore (3.34 % more).

Star was not even the highest bidder in the two marquee categories - Indian television and digital. The highest bid for the Indian television category was Sony's INR 11,050 crore, compared to Star's INR 6,196.95 crore. Facebook's bid of INR 3900 crore for digital rights in India was 170% higher than Star's INR 1443 crore, which was the lowest in the category.

Star and Sony, heavyweights in the television segment, were not even contenders in the digital category. There, the faceoff was between Facebook, Reliance Jio and Airtel, with all three making bids over INR 3000 crore.

According to Shankar, Star's global bid was just right, not too high and not too low. "Even if it was slightly less we would not have got the rights. That should tell you this is the right figure. When one person or one company bids very highly you can ask that question. But in every category it has been so competitive. There are three digital rights that went have gone for more than 3000 crores. Digital did not even exist 10 years ago. In television it was very aggressively tendered too, and equally for rest of the world. This should tell you that cricket continues to be very strong, healthy and very attractive in this country.

"Finally, whoever puts in that money, they put in that money because they believe in the fans of the sport. The universe of cricket fans, it tells you, continues to very healthy, continues to grow. What was paid in 2008, that was 2008. India and cricket and IPL - all three have changed dramatically in the last 10 years. It is a reflection of that."

(Espncricinfo.com)

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