Bilateral cricket media rights: Will BCCI make a killing again?

On Thursday, 31 August, the Board of Control for Cricket in India (BCCI) will auction the media rights — for television (TV) and digital — for bilateral matches to be played in the country for the next five years.

The hope is that the three bidders — Disney Star, Viacom18 and Sony Pictures Networks India (SPNI) — will loosen their purse strings once again. The last time they did that, BCCI waltzed away with ₹48,390 crore in IPL (Indian Premier League) rights for the 2023-27 cycle. That included ₹23,575 crore from Disney Star (TV rights) and ₹23,757 crore from Viacom18 (exclusive digital rights).

Later, when the ICC (International Cricket Council) auctioned its rights for four years, Disney Star was in the thick of action again, picking up the rights for $3.03 billion. Thereafter, it decided to retain only the digital rights and sub-licensed the TV rights to Zee Entertainment Enterprises for around $1.4 billion.

This time, up for grabs are two packages — TV rights for the Indian subcontinent with a base price of ₹20 crore per match; and digital and the rest of the world rights with a base price of ₹25 crore per match. Under the current FTP (future tour programme), India will play 88 games in the next five years, including 25 Tests, 27 ODIs, and 36 T20Is.

And while the board, for the first time, has kept the reserve price at 25% lower than the average per-match price from the last cycle ( ₹60 crore per match), it is counting on the popularity of Indian cricket and the fact that the bidders fought tooth and nail for the rights of the IPL and ICC tournaments.

Even at the last cycle’s average price, the board will secure ₹5,280 crore for the next five years from India cricket. Its internal target, however, is ₹100 crore per match or ₹8,800 crore.

That, sports marketing experts feel, could be a pipe dream considering that most of these companies are now looking hard at returns on the huge monies spent for the IPL and ICC rights.

In the current scenario, Viacom18, which has the digital rights of the IPL, will be looking at digital rights of the India matches, too. SPNI, which is merging with ZEE, will have the TV rights of the ICC, and it has managed to keep its sports business sans any Indian cricket since 2018. Disney Star, which at one point in time had the rights to all three major properties — BCCI matches, the IPL and ICC matches — now only has TV rights to the IPL and digital rights to the ICC tournaments.

Experts said that the BCCI rights — if the bidders follow business logic and not ego — will not see aggressive bidding for the TV rights. However, Viacom18, which is likely to bid aggressively for digital rights, can’t allow the bidding for TV to be so low that its rivals can pick those up for closer to the base price.

Disney Star is in a space where the BCCI rights will not make or break its business in India. Moreover, Disney headquarters in Burbank is now calling the shots and nobody knows what they are thinking. In that scenario, they may not bid aggressively for the rights. They may not want to go beyond the ₹60 crore tag.

SPNI, on the other hand, has always shown cautious aggression. During the last auction, it was bidding against Star but claimed to have let go when the rights value became unviable, its honcho N.P. Singh, had said in an interview with The Economic Times.

Meanwhile, Viacom18, which is building its sports business and has picked up rights to Cricket South Africa and the Women’s Premier League, is likely to be more aggressive. It may also want to pocket the TV rights, if it comes at the right cost, to help grow its distribution business, while its stated focus remains digital.

Some experts believe that the BCCI has been slightly late in auctioning the rights, and the market has turned. If it had come up with a tender just after the IPL auction or even after the ICC one, there was a chance for the rights to go for a greater price. However, now with advertising revenues from some of the big categories including startups and surrogates (offshore betting companies) going off and the gaming sector facing a 28% GST burden, the market has changed drastically.

Moreover, the excitement for bilateral series has ebbed with only Australia and England teams’ India tours getting decent viewership (Pakistan doesn’t come to India). Also, 25 test matches mean a further drop in ratings.

It’s important to recognise that the BCCI stands as one of the most affluent sports organisations globally. The IPL broadcasting rights hold a value of $15.5 million per match, placing it in the second position, right after the National Football League (NFL), an American professional football league, which boasts an even higher per-match valuation of $17 million. Other prominent sports leagues, namely the English Premier League (EPL) and Major League Baseball (MLB), both maintain a per-match value of $11 million. However, it’s worth noting the scale of matches hosted by each league: the NFL conducts 272 matches per season, the EPL has 380, and the MLB features 162, all in contrast to the IPL’s 74 matches.

The BCCI earned ₹7,606 crore in terms of revenue in fiscal year 2022. The expenses incurred were ₹3,064 crore and it paid ₹1,159 crore in income tax. The board has reported a combined revenue of ₹27,411 crore in the five-year block from 2017-2022.

Ultimately, the significant question lingers: Will the bidders disregard logic once more and bid based on ego, or will a sense of business prevail?

Updated: 30 Aug 2023, 09:44 PM IST