In 2008, the Indian Premier League’s (IPL) media rights fetched I₹8,2000 crore (US$1.05 billion) in a ten-year deal with Sony. Just 14 years later, cricket’s dominant Twenty20 franchise tournament has increased that figure nearly sixfold.
The Board of Control for Cricket in India (BCCI) confirmed last month that Disney Star, Viacom18 and Times Internet will share the spoils for the 2023 to 2027 cycle, paying a whopping I₹48,390 crore (US$6.2 billion) between them. It concluded a bidding war that not only cemented the IPL’s status as one of sport’s most commercially attractive properties, but also pointed to where the Indian market is heading over the next four years.
So, why did the rights sell for so much and who appears to have got the best deal? Here, SportsPro takes a closer look at the deals and examines what the wider implications could be.
Who got what?
Unlike the last tender, the BCCI put four packages up for grabs. Package A comprised the television rights in the Indian subcontinent, while B and C were the digital rights packages, with TV and digital rights for the rest of the world available in package D.
Disney-owned Star India retained domestic TV rights for I₹23,575 crore (US$3.02 billion). The network, though, was unable to keep the all-encompassing global deal it has for the 2017 to 2022 cycle, which saw it pay I₹16,347.5 crore (US$2.55 billion at the time).
That dominance was ended by Viacom18, which stumped up I₹23,758 crore (US$3.05 billion) for the league’s digital package covering the Indian subcontinent. That outlay also saw the media company snaffle TV and digital rights across Australia and New Zealand, the UK, and South Africa.
The IPL’s TV and digital rights for the Middle East and the US were picked up by Times Group-owned Times Internet, which reportedly forked out a comparatively frugal I₹205 crore (US$26.3 million) and I₹258 crore (US$33.1 million) respectively.
The list of potential IPL suitors was considerable, not to mention varied. Alphabet-owned Google and YouTube, as well as Amazon, Sony Pictures Networks India, Zee Entertainment, Dream11 and SuperSport, were among those also linked with a deal. In the end, though, only a handful of those companies followed up on their interest.
.@gujarat_titans – The #TATAIPL 2022 Champions! 👏 👏 🏆 👍— IndianPremierLeague (@IPL) May 29, 2022
The @hardikpandya7-led unit, in their maiden IPL season, clinch the title on their home ground – the Narendra Modi Stadium, Ahmedabad. 🙌🙌 @GCAMotera
A round of applause for the spirited @rajasthanroyals! 👏 👏 #GTvRR pic.twitter.com/LfIpmP4m2f
Is it a surprise the rights went for so much?
For context, the latest deals are nearly triple what Star India paid during the previous cycle. Jay Shah, honorary secretary of the BCCI, also highlighted that the new contracts make the IPL the second most-valued sports league in the world in per-match value, behind only the National Football League (NFL).
Star’s arrangement will see it pay the equivalent of I₹57.5 crore (US$7.4 million) per match, while Viacom18’s digital deal for the Indian subcontinent will set it back I₹50 crore (US$6.4 million) each game.
“The surprise comes from the extent to which the value grew from the previous deal,” Daniel Harraghy, senior analyst at Ampere Analysis, tells SportsPro.
“Any kind of increase like that is obviously going to be noteworthy, especially for something that’s already quite a lucrative product. But we’ve seen more recently new teams come into the competition, there are more games.
“Then there’s the fact that there’s the changing media landscape. We’ve got the growth of digital as well as the TV rights. There are so many opportunities to engage with the competition now and reach so many people.”
You’ll also do well to find another market so large where one sport is so popular – something that has also accelerated the IPL’s domestic rights value.
“In India, the sports market is 90 per cent dominated by cricket,” Karan Taurani, senior vice president at Elara Capital, explains.
“Of course, cricket globally is very small. It’s no more than four per cent of the media rights share as a sport. Nonetheless, it just goes to show the importance of IPL cricket.”
The BCCI said the 2021 IPL season pulled in 380 million domestic TV viewers up to match 35
Why did Disney settle for TV rights?
Disney chief executive Bob Chapek has frequently reiterated the importance of streaming to his company’s future, telling CNBC in October 2020 that the media conglomerate was “tilting the scale pretty dramatically” towards its over-the-top (OTT) products.
It could therefore be deemed a surprising choice to let the IPL digital rights go, especially in a highly populated country that could contribute handily to Disney’s goal of securing 260 million global Disney+ subscribers by 2024. Disney may have regarded Viacom18’s winning bid as overpriced, but continued cord cutting suggests it is a potentially risky long-term viewpoint.
“I think [TV and digital] segments will coexist,” says Taurani. “TV is one segment wherein the scale is already achieved, and [Star India] have reached a certain threshold in terms of numbers on an annualised basis. The only concern is that if cord cutting happens rapidly in India, then your TV numbers could be at huge risk.
“If you look at penetration, TV has reached a peak. It’s plateauing right now. If TV numbers remain stable, then I think a growth rate of seven per cent or eight per cent for IPL revenue on TV is somewhat achievable.”
Taurani points out that bidding for the IPL’s TV rights was “not that intense” compared to digital. He also highlights that Disney has relied heavily on other telecommunications platforms to distribute its streaming content, which caused it to rework its average revenue per unit (ARPU) and squeezed profit margins.
“I think that’s the reason why Disney opted out of it,” he continues. “Clearly, they didn’t see any kind of a roadmap. It did not make any viable sense for them spending such a hefty content cost.”
An annual premium subscription to Disney+ Hotstar costs I₹1,499 (US$19.17), while Disney+ alone costs US$79.99 per year in the US. ARPU in the two countries are worlds apart. In North America, Disney realises around US$6.32 in average monthly revenue from Disney+ subscribers, but that figure is down at US$0.76 in India.
Breaking even in India would therefore have been a challenge had Disney beaten Viacom18 to the digital rights to sit alongside its TV package.
“I’m sure it’s a very calculated strategic decision,” says Harraghy. “Disney are performing well in India, but it’s not a massive market for them.”
For now, TV remains the most popular medium in India to watch the IPL. According to YouGov, which surveyed 1,012 people in India, 42 per cent of viewers claimed they preferred watching the league on TV. Only 11 per cent watched it online, while 20 per cent said they mostly tuned in online.
The latest media rights deals are nearly triple what was paid during the previous cycle
Why did digital dominate?
Digital may have only marginally outstripped the fee paid for traditional TV rights, but it said a lot more about the state of play for streaming in India. According to Harraghy, internet users in the country are watching one hour and 17 minutes of video content per day on their mobile phones, which he says has surpassed TV sets in recent years.
“It just goes back to the cultural and media shift within the market,” he adds. “You’re now able to reach as many people as possible within the country. We’re seeing a gradual decline in pay-TV subscriptions in India as well.”
Viacom18’s digital play comes after it announced a multi-billion dollar deal which will see James Murdoch’s Bodhi Tree, Indian conglomerate Reliance Industries, Paramount Global and TV18 split its ownership. Assuming that passes regulatory approval, Viacom18’s spending power will increase significantly, not to mention giving it two streaming products in India as Paramount+ joins Voot in the market next year. The latter can also be accessed via Reliance-owned telco giant Jio, which crossed the 400 million subscriber mark in October 2020.
“For Viacom, it made sense to go all in,” Taurani says. “They have very strong support in Voot for the distribution ecosystem, which was not the case for Disney+.”
According to the BCCI’s Shah, the 2021 IPL season pulled in 380 million domestic TV viewers up to match 35. For the 2020 campaign, 58 of the league’s 60 matches amassed a cumulative 383 billion minutes watched across TV and digital platforms in India.
Citing data from May 2022, YouGov also states that a large proportion of IPL viewers migrated to OTT platforms, growing by 305 per cent year-on-year. The market research company added that the cumulative reach of TV and OTT this year could be 426 million, the highest ever for the IPL.
Still, those figures do not hide the fact a typical IPL season lasts only two months, posing a potential challenge for Viacom18 to recoup its investment.
“You have a huge eyeball base, you have good consumption metrics, but shelf life for the content is phenomenally low,” says Taurani.
“I think the digital breakeven will take a lot of time. It may happen only in the fourth and the fifth year. For Viacom, I think it is not for the profit. It has more to do with the strategic initiative.
“What a property like the IPL does in a country like India, where the market is very fragmented and content costs are high, it gives you a very high userbase number. Your user metrics jump up sharply. There’ll be a shift here in users moving from Disney+.”
More than 104,000 people watched this year’s IPL final at the Narendra Modi Stadium
How many subscribers could Disney+ Hotstar lose?
As of 2nd April, India’s Disney+ Hotstar boasted 50.1 million subscribers, representing more than one-third of all Disney+ subscribers globally.
Harraghy and Taurani both agree Hotstar will see some subscriber churn after Disney missed out on the IPL’s digital package, though differ on the extent.
“We looked at the proportion of Disney+ Hotstar subscribers in Q1 2022 who were willing to pay to watch the IPL and it was around 25 per cent,” reveals Harraghy. “I believe that will be around 12.5 million subscribers who are then at risk of potential churn.”
Taurani paints a bleaker picture for Disney, believing the churn could be “massive”. He also believes things may get even worse if Hotstar loses further cricket coverage, with the International Cricket Council’s (ICC) media rights from 2024 now on the market.
“My personal assessment is that close to 50 per cent to 60 per cent of monthly active users were driven because of the IPL,” he continues. “If they lose other cricket properties, I am expecting a 50 per cent decline in their paid subscriber base.”
That number, according to Taurani, could even rise to as much as 70 per cent.
According to YouGov, the cumulative reach of the IPL on TV and OTT this year could be a record 426 million
Disney will be hoping that Hotstar’s wider content line-up, which far outstrips Viacom18’s slate, will be enough to retain subscribers. Indeed, it seems premature to say that Viacom18 will easily harvest a hefty chunk of its rival’s userbase purely due to the IPL.
“Viacom will have to be quite intelligent with its pricing, things like specific sports packages to capture as many people as possible,” notes Harraghy.
“If they price it at the same level as Disney+ Hotstar has been with the IPL rights, they don’t have the other content, the entertainment package, that Disney has.”
Ancillary content, such as fantasy sports, could be an option. Yet, despite its vast distribution capabilities, Viacom18 has plenty of work ahead.
Where will the advertisers go?
Having held a monopoly on advertisers during IPL broadcasts, Disney will now be going toe-to-toe with Viacom18 in India.
As for which brands will favour what, companies from traditional sectors such as the auto, banking and fast-moving consumer goods (FMCG) industries may opt to stick with TV to ensure an immediate impact. Organisations operating in newer categories, such as fintech, could deem digital a more natural home for their marketing campaigns.
IPL advertising does not come cheap. According to The Economic Times, some organisations parted with close to I₹17.2 lakh (US$21,987) for ten-second TV slots during the 2021 season. The Indian newspaper also reported that Star had secured more than I₹2,950 crore (US$377 million) in ad revenues for the previous campaign.
Disney has retained the more established platform, but Viacom18 will be hoping the consumer shift to OTT, coupled with its extensive digital reach, will provide a tempting alternative for advertisers.
“Viacom would not have gotten into this deal if they didn’t think that they would be able to reach the number of people that will attract advertisers,” Harraghy says.
“This trend that we’re seeing of moving to online video. If that continues, absolutely I’d expect advertising money to be redistributed into the online market. That’s something that Viacom will have to take advantage of.”
The 2022 IPL is set to generate more than US$131 million in sponsorship revenue
What about Times Internet’s rights?
Times Internet snapping up TV and digital rights for the Middle East and the US was largely lost amid the commotion of Disney and Viacom18’s deals. Even so, it could prove to be an intriguing investment.
The Middle East’s presence in franchise cricket is being more keenly felt. Notably, the United Arab Emirates’ (UAE) T10 League has fuelled interest and last year saw the Gulf state announce plans for a new T20 league, now set to debut in January 2023. The UAE also staged the rescheduled 2020 IPL, as well as the 2014 edition.
According to data from the 2018 American Community Survey (ACS), there are 4.2 million people of Indian origin residing in the US. The country is calling for cricket’s inclusion at the Los Angeles 2026 Olympics, wants full ICC membership by 2030, and plans to launch its own T20 tournament next year.
Evidently, the cricket audience is much smaller in those two markets. But Times Internet seems to be betting on potential for the next four years.
“It’s an interesting one,” says Harraghy. “The IPL hasn’t really grown outside of the Indian subcontinent. It’s not a massive competition in other traditional cricket markets like in England, Australia and South Africa.
“But if you can capture the Indian fans in the US and MENA markets, you can capture a decent number of eyeballs. [Times Internet] have picked up the rights for a fairly small amount. I don’t imagine they’ll get much in the way of subscriptions or premium channel distribution money. But in terms of advertising they may well perform well if they capture the right people there.”
Is the only way up?
Given the mushrooming value of IPL rights since 2008, speculation has already started over how much the next cycle could rake in. Taurani is one of those putting his cards on the table.
“I’m not assuming a growth of more than one and a half to two times on a like for like basis,” he asserts. “That time around, you will see digital being penetrated into multiple new markets. It will not offer growth in terms of number of users, it will only offer a growth in terms of the consumption of the time spent.”
There is also the question of what the IPL’s contracts will do for wider cricket. Ever since the competition was established, one view has been that franchise tournaments are contributing to the plight of Test matches due to their financial pull. The latest rights fees will have only fuelled that belief – not that the sport’s global governing body sounds too concerned. Sunil Manoharan, the ICC’s vice president media rights, has described the IPL agreements as “fantastic news for everyone”.
Not everyone will agree with that view, but it is hard to not see the value of the IPL’s rights only heading in one direction. 14 years ago, it might have been difficult to predict that the league’s rights would reach today’s levels. Perhaps, as the OTT sector matures, they aren’t even close to their peak yet.
“The only thing would be if Voot struggled to monetise this new deal, because it’s so lucrative,” says Harraghy. “If they struggled to monetise that through advertising then you might see the digital side stripped back slightly.
“But I’d be surprised if that was the case. Advertisers will be desperate for those spots. I can only see this going one way.”