Rs 48,390 Crore: Decoding The Astronomical IPL Rights Numbers

The crowing jewel of the global T20 circuit, the Indian Premier League (IPL), has set the cash registers ringing for the Board of Control for Cricket in India (BCCI). The combined media rights for the IPL, for the five-year period, starting 2023, have been sold for an astronomical Rs 48,380 crore.

For the BCCI, there were concerns around the faltering ratings of the season gone by, with a few reports stating that advertisers were seeking compensation from Disney Star India, given they had paid a premium for the ad-spaces.

The media rights were segmented into four separate bundles. Bundle A, with a base price of Rs 49 crore per match was for the TV rights within India. Bundle B, with a base price of Rs 33 crore per match was for the digital rights within India. Interestingly, Bundle C, at a base price of Rs 16 crore per match, came with the streaming rights of 18 matches per season. These included the four playoffs including the final, the opening game of the season, and the thirteen evening games on all double-header days.

Bundle C was important for two reasons. One, it gave the bidder the right to stream the 18 matches with higher viewership, compared to the rest of the season. Two, it would take away the exclusive streaming rights from the winner of Bundle B. Thus, winners of both Bundle B and C would be able to stream these 18 games live.

Bundle D, with the combined digital and TV rights for the rest of the world, was priced at Rs 3 crore per game. For the seasons of 2023, 2024, and 2025, 74 games were factored in with 94 games for 2026 and 2027, thus taking the total number to 410.

Bundle A was sold for Rs 23,575 crore, or Rs 57.5 crore per match. Bundle B was auctioned for Rs 20,500 crore or Rs 50 crore for each game. Bundle C, with 98 games, went for Rs 3,257.5 crore, or Rs 33.24 crore per game, and Bundle D went for Rs 1,058 crore, or Rs 2.6 crore per game, thus taking the total to approximately Rs 48,390 crore.

For each game, starting 2023, BCCI is all set to earn more than Rs 118 crore. Even though some analysts expected the proceeds from the auction to cross Rs 50,000 crore, the current numbers throw up some interesting trends.

One, no one cares about Netflix. The fall from grace for the OG of streaming, after it registered a net loss in subscribers, for the first time in a decade, led many question the viability of streaming businesses altogether.

Netflix has lost more than 70 per cent of its market share since the beginning of the year and is staring at more volatility ahead. Couple this with CNN+ shutting down it streaming service merely a month after its launch in the US. The bearish sentiments, however, were absent during the auction with many betting big on India cutting the cord.

Two, for Disney’s streaming service, it is not the end of the road, not even remotely. Of the 138-odd million paying subscribers across the globe, the Indian market makes up for more than one-third of the market, with over 50 million paying subscribers. Now, with Disney losing the streaming rights, many fear the prospects of Disney+ could be dented.

However, Disney still has the streaming rights for all domestic series and ICC tournaments, and could bet on getting back the media rights for overseas tournaments, currently with Sony. The upcoming World Cup in 2022, in Australia, and the big one next year in October, in India, will keep Disney optimistic about subscriber retention.

Three, Many were expecting IPL to be the new front for an Ambani-Bezos showdown, after the whole fiasco around the Future Group. Amazon pulled out at the last moment. Amazon Prime, as a streaming service, trails Disney+ with 26 million subscribers. However, what works for Prime in India is their array of shows, many now into the post-production stages for their fourth season, thus steadily building a loyal customer base.

Even Disney+ hasn’t accomplished that feat yet, with their originals trailing Prime both in quality and quantity. Perhaps, for Amazon, they were better off investing in the code they have already successfully cracked, or perhaps, $3 billion was too much for them, for a market they are yet to completely understand?

Four, we have a new player in India’s OTT circuit. Voot, Viacom 18’s streaming service, has been around for a while now, hosting some of the nation's most-watched shows. However, venturing into the IPL, Ambani has decided to go big on streaming. The platform crossed a million paying subscribers around March 2021 but otherwise has a user base of over hundred million subscribers.

Voot is expected to grow due to the IPL, steadily expanding its paying customer base across the next five years, displacing the likes of Netflix from a market that is beginning to look crowded. For the subscribers, Voot happens to be one more addition to their streaming bills. The question is, which one will they let go, if they have to?

Five, one of the interesting episodes of the media rights auction was the noise around Bundle C. Ideally, Reliance (Viacom 18, Voot) after winning Bundle B (digital rights) could have stepped back, but instead, they went all in for exclusivity, unwilling to share the 98 games in Bundle C with any other streaming service. Perhaps, the viewership numbers of the 98 games, especially the playoffs, mattered to Reliance.

There were rumours about Disney wanting to go for Bundle C, but they were upstaged by Reliance. Interestingly, it was Bundle C that saw the highest jump in the base price for earnings per match. An odd bet that did wonders for the BCCI and made Reliance the uncontested boss for digital media rights, even though they had to shell out an additional Rs 3,257.5 crore for it.

Lastly, against what Disney paid for the TV rights, Reliance spent marginally more for digital. Compared to 2017, when the last auction happened, and until when the media rights were not split between digital and TV, the BCCI has garnered almost three times the amount, compared to around Rs 16,347 crore back then.

Digital alone has fetched the BCCI 1.5 times the amount it made from the combined auctions of 2017, thus indicating the growth of streaming services in India. Going forward, with a billion internet users, streaming services, starting with Disney and Prime, and now Voot, will be looking to convert at least 10 per cent of the user base into paying subscribers. For global OTT platforms, India is where the growth is.

The BCCI deserves all the accolades, for in merely fifteen years, they have created a tournament that is now second to the National Football League (NFL) in terms of earnings per match from media rights.

The IPL has surpassed the English Premier League and Major League Baseball. Life has come a full circle for Ambani whose Jio resulted in the internet boom in India, and now with the IPL digital rights, he is all set to make it big in the OTT sphere.

Now, only if the BCCI could spend some money in creating IPL's version of 'Drive to Survive'.