IPL: Viacom18 Reportedly Won Digital Rights, As Disney Star Lands On TV Again

IPL: Viacom18 Reportedly Won Digital Rights, As Disney Star Lands On TV Again

IPL: Viacom18 Reportedly Won Digital Rights, As Disney Star Lands On TV Again

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Billionaire Mukesh Ambani’s media company has won the Indian Premier League’s digital broadcasting rights, outbidding entertainment giants including Walt Disney Co. and Sony Group Corp., according to a person familiar with the matter.


The online rights to the popular annual cricket tournament have been awarded to Viacom18 Media Pvt., a joint venture between Paramount Global and Reliance Industries Ltd. of Ambani, the person said, asking not to be identified as the information is not public. The Board of Control for Cricket in India, the sport’s local governing body which launched the auction on June 12, has yet to officially announce the winners.

The Financial Times reported that Viacom18 bought the rights for around $2.6 billion (approximately Rs 20,300 crore), while the New York Times reported the deal was worth almost $3 billion. (about Rs 23,400 crore). Disney, however, pocketed the TV rights to the matches for around $3 billion (around Rs 23,400 crore), FT said.

The five-year digital contract is a crucial victory for the Ambani conglomerate, which has ambitions to rise into the club of global media and online streaming giants. Described as the Super Bowl of cricket, the IPL is one of the world’s fastest growing sporting events with cult status in South Asia and among the subcontinent’s diaspora. Attracting over 600 million viewers, it is also considered the fastest way to grab attention and grow viewership from any platform in India, the world’s largest consumer market. with nearly 1.4 billion people.

Representatives for Reliance and Disney did not immediately respond to requests for comment. Disney shares fell 3.7% on Monday amid a broad market sell-off, bringing this year’s loss to 38%. Reliance shares slid 0.6% at 9:34 a.m. in Mumbai on Tuesday.

Long term adhesion

“IPL is one of the most conversion-driving properties in a hotly contested OTT market, where consumer portfolio saturation and fragmentation are quickly becoming insurmountable challenges,” said Utkarsh Sinha, Managing Director of Bexley Advisors, a investment boutique that focuses on technology. and media. “It gives long-term stickiness, which again is hard to come by as users show fickle loyalty to platforms and dynamically move to where the content is.”

Four contracts from 2023 were up for grabs, broadly covering television and digital rights, as well as a selection of key matches, in the Indian subcontinent and overseas. BCCI is auctioning the broadcast and streaming rights to IPL separately for the first time.

Despite the surprise withdrawal of Inc. at the last moment, the auction saw fierce competition. Total bids topped Rs. 450 billion, surpassing the Rs. 328 billion floor price set by the BCCI, Bloomberg News reported. This is nearly three times the amount raised at the previous auction in 2017.

Before Amazon exited the race, people familiar with the developments expected the auction to attract over Rs. 400 billion in total bids, with one analyst even predicting up to Rs. 600 billion.

Cricket, a quintessential English summer sport, has legions of fans in most parts of the British Commonwealth, and particularly in the Indian subcontinent. Behind only the English Premier League and the National Football League in global popularity, the IPL is increasingly seen as a key enabler for any media company looking to appeal to the Indian consumer who goes online to shop and have fun.

The IPL was valued at Rs. 458 billion in 2020 by Duff & Phelps, now known as Kroll. It could now be 25% higher, said Santosh N, managing partner at D and P India Advisory Services, helped in part by the inclusion of two new teams which took the number of games to 74 during the season which just ended. The league now has 10 teams.

Launched in 2008, the IPL is a much shorter and more entertaining format. Usually held in April and May, each match lasts between three and four hours, compared to the one-day version and the classic five-day Test cricket known for its tea breaks. Stadiums hosting an IPL match feature carnival-like merchandise and atmosphere, often with Bollywood actors cheering from VIP boxes.

Sigh of relief

Although Disney lost the legacy rights from its 2019 acquisition of the global entertainment assets of 21st Century Fox Inc., some shareholders might breathe a sigh of relief. Disney+ Hotstar subscribers pay an average of just 76 cents a month for the service. That’s an annualized income of less than $500 million (about Rs. 3,900 crore), making it hard to justify the annual duty fee.

Ben Swinburne, an analyst at Morgan Stanley, wrote in a May 12 research note that “profit potential out of India is minimal” and will not have a significant impact on earnings if Disney does not win the CONTRACT. Chief executive Bob Chapek told investors in February that while cricket was a big part of its product offering, new local content the company is developing in India would soften the impact.

“It’s not like we see this business evaporate if we don’t get it,” Chapek said.

Still, the loss could weigh on the Burbank, Calif.-based company’s ambitious goals of getting as many as 260 million subscribers worldwide by 2024. While rival Netflix Inc. lost subscribers in the last quarter, Disney+ added 7.9 million customers. More than half of them came from Disney+ Hotstar, which is offered in India and several other Southeast Asian countries. Ten additional IPL matches last quarter contributed to an increase in Disney’s international ad revenue.

Disney+ Hotstar now has 50.1 million paid subscribers

For Reliance, a first bidder in IPL’s 15-year history, the cricket streaming rights are also aimed at fueling the e-commerce and retail ambitions of its tech firm Jio Platforms Ltd.

Reliance “came in with the deepest pockets and the longest life to extract IPL property,” said Sinha of Bexley Advisors. “As the mainstream media portfolio continues to split into smaller pieces in a crowded market, Reliance could approach it with a ‘consolidate and dominate’ strategy. IPL’s victory is a strategic step in this direction.

© 2022 Bloomberg L.P.

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