Digital rights get a 70% premium on Day 2 of the auction

The cost per game now stands at Rs 113.9 crore or around $14 million, making the IPL the second most valuable sports league after the NFL.

The Board of Control for Cricket in India (BCCI) reportedly bagged an incredible Rs 46,700 crore for television, digital media and non-exclusive digital media rights for the Indian Premier League (IPL) 2023-2027 on the day 2 of the auction. The cost per game now stands at Rs 113.9 crore or around $14 million. The IPL is now the second most valuable sports league after the National Football League (NFL) whose cost per game is $17.36 million.

BCCI has yet to make an announcement on the winning bids and new official IPL broadcasters. According to industry analysts, the total value of the offer could be around Rs 50,000 crore. The auction will resume at 11 a.m. on June 14.

The final bid for the linear television rights was Rs 23,575 crore (Rs 57.5 crore per game). There has been heavy speculation about which broadcaster won the linear television rights. Disney Star and Sony were close rivals in this category. The winning bid is a 30% premium on the base price.

The broadcaster can charge a huge premium out of 2022 to recoup the costs. In 2022, the TV advertising rate was around Rs 13-14 lakh per 10 second spot.

Viacom 18 likely became the winner of digital media rights at Rs 20,500 crore (Rs 50 crore per game) by paying a premium of 70% over the base price. The final value of digital media rights is approximately 86% of linear TV rights. Additionally, the rights for Category C would have been closed at Rs 18.5 crore per game – Rs 1,700 crore for 90 games. In contrast, Star India secured television rights for Rs 54.5 crore per game in 2017.

The limited scope of digital media rights monetization is the main challenge for the platform that wins the digital bid. The SVoD subscriber base in India was around 80 million in 2021 and revenue from video streaming subscriptions amounted to Rs 5,400 crore during the year, according to the 2022 FICCI-EY Media Report and entertainment.

“The winning bidder for digital has definitely taken a big kick,” says Joy Bhattacharjya, CEO of Prime Volleyball League and former Team Manager Kolkata Knight Riders. The premium the winning bidder will pay for digital rights may seem enormous at first, but it is important to view digital rights as a gateway to greater dominance not only in entertainment, but also in telecommunications and of retail.

Bhattacharjya further adds that the video streaming platform also takes into consideration the fine-grained targeting capabilities of digital not only to deliver advertisements but also to curate content for specific audiences. For example, in 2021, Disney+ Hotstar had stand-up comedians doing commentary for IPL. It expects content and commentary in more languages, thus reaching a wider audience. “Digital’s ability to speak to different audiences in very different ways is what makes digital a strong offering,” he says.

TV reach of IPL is around 400 million and IPL on Disney+ Hotstar reached around 300 million people in 2021. In 2021, smartphone user base in India was 503 million and connected

Televisions have passed the 10 million mark, according to the FICCI-EY report. And the digital medium is growing at a CAGR of 20%. By comparison, Indian TV households will continue to grow at a CAGR of 1% until 2025. In 2021, India had 170 million active TV connections.

“IPL has a massive digital following,” says Shailesh Kapoor, Founder and CEO of Ormax Media. He adds, “The number of viewers may not be growing, but the digital numbers are growing year on year. So in the long term, IPL’s audience will have a higher digital share.”

From an advertising perspective, Kapoor expects advertisers who want to be present on both media outlets will end up spending more because they will have to enter into two independent agreements instead of one consolidated agreement.

BCCI had set the reserve price for media rights at Rs 32,890 crore (Rs 89 crore per game for a total of 370 games). IPL media rights have been divided into four categories: TV rights for the Indian subcontinent (Category A), digital rights for the Indian subcontinent (Category B), special matches (Category C) and rights for the rest of the world (RoW) (category D).

The main bidders are Viacom18, Disney Star, Sony Pictures Networks India, Zee Entertainment Enterprises Limited (ZEEL). Amazon pulled out of the race after failing to participate in the technical evaluation of the bid on June 10.

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