Star India wins IPL media rights for Rs16,347.5 crore for 5 seasons
New Delhi: Star India Pvt. Ltd won television, digital, Indian and global media rights to the India Premier League (IPL) for the next five seasons for Rs16,347.50 crore, outbidding rivals such as Sony Pictures Networks India, Facebook Inc. and Bharti Airtel Ltd.
This effectively puts IPL in the top tier of global leagues such as the UK’s Premier League and the National Basketball Association in the US. And it gives Star, the Twentieth Century Fox company which already has TV rights to all tournaments organized by the International Cricket Council, including the Cricket World Cup, and all matches organized by the Board of Control for Cricket in India (BCCI), a virtual stranglehold over all cricket media rights in India.
“IPL is a very popular property and we believe a lot more value can be created for the fan across TV and digital,” Star India chief executive Uday Shankar said at a press conference in Mumbai shortly after the results were announced. “We have significant presence in TV in India, a robust digital platform that we plan to take global and our channels are globally distributed.”
Star India was the only firm to put in a consolidated global bid. Its consolidated bid exceeded the Rs15,819.51 crore sum of the top individual bids across categories.
Broadcaster Sony Pictures, which bid Rs11,050 crore for the television rights in the Indian subcontinent, had the highest in that category. Sony was the official broadcaster of IPL between 2008 and 2017. Facebook had the highest bid for IPL’s internet and mobile rights for India at Rs3,900 crore. Reliance Jio Infocomm Ltd bid Rs3,075.72 crore for the internet and mobile rights.
Rahul Johri, chief executive of BCCI, said all bidders played to their strengths and bid aggressively. BCCI received 14 bids for television, internet and mobile rights to IPL.
Shankar added that Star India’s sports strategy was not just restricted to cricket but equally focused on the development and growth of non-cricket sports at the grassroots level. In 2013, Star India invested $1 billion to expand sports programming beyond cricket and broadcast sports content in Indian languages.
Sports marketing executives said Star India’s consolidated bid will work to its advantage and that the final bid price could potentially fetch a return on investment.
“In isolation, the room to play with these media rights could be limited,” said Vinit Karnik, business head (entertainment, sports and live events) at the media buying agency GroupM.
“With both TV and digital rights with Star India, there is likely to be no lag period between the live stream on Hotstar and Star Sports. Besides that, the Indian media landscape is changing, and the distribution revenue from channels will be far higher compared to 10 years ago. Both subscription and advertising markets will mature further, also working to Star’s advantage,” Karnik added.
In 2017, during the 10th edition of IPL, Sony is estimated to have earned Rs1,200 crore as advertising revenue and Hotstar, which had the digital rights, Rs120 crore. Star will have to significantly better those numbers (earning more than double those every year) for it to make profits on its IPL investment.
Shankar said Star sees its bid more as a five-year investment than a one-time deal that has to be immediately profitable.
- Godrej Agrovet looking at $1.27 billion valuation in IPO
- Flipkart, Amazon claim huge boost from festive season sales
- Aditya Birla’s acquisition bid may value Aleris Corp at $2.5 billion
- Rule on subsidiaries may limit operational flexibility of firms
- Samsara Group, Lionforge vie for debt-laden Dighi Port