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IPL Media Auction: Beyond the fanciest T20 League, there is a world to which investors will look forward

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One can look at the title of this blog and understand that this year IPL media rights are going to be a tough game for the existing as well as new players. If you see earlier, media rights were with only one player and that is Star India (now Disney). Between 2018 and 2022, the entire media rights of all three properties were with one company and that was Star.

The properties from which these rights were taken are the Indian Premier League, BCCI and International Cricket Council. In the changing circumstances, this time no investor would find it practical or realistic to invest such a huge amount in the media rights of the three broadcaster (global) properties.

Back in 2011, when Star India was expanding its local presence by restructuring and reinventing itself in the Asian market trying to explore new avenues of business and become the sole domination. The company had only one thing to do and that was to expand its reach to the maximum extent possible. They wanted to grow and increase the extent to which potential buyers would automatically line up in due course. That was the agenda of that time.

So what did they do to expand such boundaries?

  • To show their growth and potential, they bought a 37 storey building as HO in the most luxurious areas of Mumbai.
  • They paid ICC USD 1.98 billion to buy the rights between the 2015-2023 cycle
  • They also paid USD 2.55 billion to acquire the IPL rights for the 2018-2021 cycle.
  • They bought the rights of BCCI in 2018 for Rs. 6138 crores which was less than a billion.

All in all, Star India combined to make huge profits and grabbed a large major market share, generating revenues of around $5.5 billion. As per today’s dollar rate, the total buying cost what star India invested 2014-2018 is not at all equivalent in today time to even purchase one single media rights.  IPL rights alone would cost US$5.5 billion or more. As of today, no company or consortium would want to invest more than US$ 10 billion, which Star India managed to do in 2014-2018.

In today’s changing dynamics, no investor would want to invest such a huge amount for a cycle period of 5 years. That would be completely insane and unprofessional. And that’s where the competition begins and is certainly a good game to play safe looking at the future ahead.

If you look at the 2017-2018 scenarios, you will find that there were only two companies named Sky from the UK and Fox or Channel 9 from Australia. This time as the price of the tournament has gone up, so has the competition. Some major players have emerged in the market recently such as Amazon who has the potential, the demand and the urge to win the game.

But the question does not stop only in whose court the ball will be found, but the question should be from all the three bodies (ICC, BCCI and IPL) whether they have the combined resources to organize such a mega event and may not affect future tour program.

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