Highlights:
- IPL media rights e-auction scheduled on June 12th might witness a clash between Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani.
- Joining the likes of the above will be Disney, Apple and Google, amongst the other fierce competitors in the auction pool.
- The base price fixed by the BCCI for the 2023-2027 cycle is Rs. 32,890.
In the just-concluded IPL season, the Gujarat Titans took the entire nation by surprise when they defied the odds and ended up sealing the IPL trophy. The stage is now set for the IPL media rights e-auction — linear and digital – on Sunday; it will be interesting to see if a newcomer takes the lead.
The auction pool comprises approximately 10 participants, including some of the world’s wealthiest and most renowned people. The auction opens the possibility of a direct battle between Mukesh Ambani, representing Viacom18/Reliance, and Jeff Bezos, head of Amazon, particularly for digital rights.
Bezos is the world’s second-richest person. Meanwhile, Ambani is ranked No. 9 on the list. The reigning media rights holder, Disney-Star, will be present, while Apple and Google’s presence adds spice to the bidding war.
Becoming a No.1 media player in a country with 1.4 billion people certainly has its rewards, but for the two debut participants, the stakes are substantially more. The cult-like game will serve as the ticket to occupying the throne of the Indian consumer market, exponentially going digital.
Mumbai-based media analyst Karan Taurani opinionates that the auction will weave India’s story in the coming decade. He says that data-driven Indians will serve as the impetus for the expansion of every business, from travel and education to retail and banking.
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The Disney-Star, in all likelihood, may engage in aggressive bargaining to keep the media rights, and it’s all about the numbers. Hotstar, the company’s digital platform, is said to generate 30% of its global revenue from India, with the IPL playing a pivotal role. On the other hand, India accounts for only 5-10% of Amazon and Netflix’s global revenue.
Reliance and Viacom18, on the other hand, have formed a strategic relationship with Bodhi Tree, with the latter spending $1.78 billion on the project. This investment platform was established by James Murdoch’s Lupa Systems and Uday Shankar, a former Star India executive. Shankar, as chairman-cum-CEO of Star, transformed the landscape five years ago when he paid four times the base price for the IPL media rights for his former firm. He’ll now be in the opposing camp.
Meanwhile, Bezos’ Amazon broadcasts the English Premier League, undoubtedly the most influential football league in the world. It may also go all-out to obtain the world’s most popular cricket league’s digital media rights. Gaining a competitive advantage against Netflix Inc., the company’s global competition is an extra motivation.
Star had purchased the IPL media rights for the 2018-2022 cycle for Rs 16,347 crore five years ago. The base price fixed by the BCCI for the 2023-2027 cycle is Rs. 32,890. A prominent BCCI executive denotes that the most significant proposal is expected to exceed Rs 45,000 crore. According to a BCCI source, the auction dynamics do not follow the straightforward profit-and-loss reasoning. It’s about gaining market share supremacy and determining how much firms are ready to pay.
To begin with, adding two additional teams increased the number of matches to 74, resulting in the base price nearly doubling from the winning offer in 2017. However, aside from the numbers, the two maiden teams have garnered new spectators to the competition. The defending champion Titans, for example, can play in front of 100,000 fans, providing them sufficient opportunity to build a large fan following. This is also predicted to result in a significant increase in TV and online viewership.
Last year, Manchester United’s American owners, the Glazers, participated in the IPL franchise auction, which resulted in adding two additional teams to the league. The Glazers aren’t great cricket fans, but they liked the IPL’s format, which is similar to the NBA and Major League Baseball — a closed-shop league with money guaranteed from specific sectors and no promotion and relegation.
