Will IPL’s declining audience impact the big media rights auction?


The 15th edition of the Indian Premier League ended on Sunday. Debutant Gujarat Titans were crowned the winners after beating Rajasthan Royals by seven wickets.

All eyes are now on the league’s next online media rights auction, which is due to start on June 12. It promises to be a high tension event.

Rs 32,890 crore – Indian Premier League reserve price for the 2023-27 cycle

Indian cricket’s governing body, BCCI, has set the reserve price at Rs 32,890 crore for the 2023-27 IPL cycle.

This is nearly double the Rs 16,347 crore that Star India, now part of The Walt Disney Company, has paid over the past five years for the consolidated TV and digital offering.

Sony Pictures Networks India held the media rights for the first 10 years, for which it paid around Rs 8,200 crore.

For the next 5-year cycle, the rights will be sold in four buckets and interested parties will have to bid separately for each.

The four categories are

>Television rights for the Indian subcontinent

>Digital rights

>Non-exclusive digital rights for an 18-game series, which includes the season opener, four playoffs, and weekend double-header night games, and

> Rest of the world

At least ten companies are said to have retrieved the tender documents by paying BCCI a non-refundable fee of Rs 29.5 lakh including GST.

These include Disney-Star, Sony, Zee Entertainment, Amazon, Apple, Google, Sky Sports UK and South Africa’s SuperSport. Amazon’s Prime Video recently started showing live cricket matches and would like to win the IPL rights to expand its user base.

However, a sharp decline in IPL’s TV viewership has led some industry players to question the base price of media rights.

Sony Pictures Networks India Managing Director and CEO NP Singh told a financial daily earlier this month that the reserve price needed a reality check amid falling viewership.

IPL viewership has fallen 30-35% in the first four weeks of the 2022 season compared to last year’s figures.

With viewership steadily declining, some advertisers have reportedly asked Disney-Star to make up for their loss by offering them spots on other high-impact properties.

Maruti Suzuki chief executive Shashank Srivastava said on May 1 that in the first 25 games, TV audiences for the target group of men aged 22 to 40 had dropped by around 58%.

He added that the automaker was in talks with Star for additional free commercial time on “live” matches so that the overall reach figures and commitments that have been made can be met.

Screenshot of Harsh Goenka tweet (on screen for only 3-4 seconds)

Pundits have pointed to possible reasons for the drop in viewership, including fan fatigue as this season has been the longest ever – 65 days and 74 games with two new teams.

Chennai Super Kings and Mumbai Indians, which are among the most consistent teams with large loyal fanbases, posted poor performances. They finished the season bottom of the points table.

The performances of big names like RCB’s Virat Kohli, CSK’s MS Dhoni and MI’s Rohit Sharma were also poor. With zero super overs this season, the public also failed to witness the kind of biting finishes they crave.

Santosh Desai, MD and CEO of Futurebrands Consulting, says too much reshuffling is happening in IPL, teams need some stability. As the pandemic waned, people were spending more time outdoors. Basically Indian Premier League or cricket has not lost its charm, he says.

K Madhavan, chairman of The Walt Disney Company India and Star India, had said that Disney-Star would not engage in a bidding war and would pay many times as much even if it considered retaining media rights. He told Business Standard that he will only participate in the auction if it is a viable business. “If someone bids 10 times for the property, we’re not there,” he said.

However, cricket turned out to be a winner for streaming giant Disney+. It added nearly 8 million new subscribers worldwide in the March quarter, half of them courtesy of Disney+ Hotstar.

The service now has more than 50 million paid subscribers, representing 36.4% of Disney+’s total paid subscriber base.

Still, does the reserve price seem too high given the drop in viewership?

Talk to Trade standard, Karan Taurani, Senior Vice President – Research Analyst, Elara Capital, says TV rights can command a premium of 25-30% over the base price. OTT rights can attract a premium of up to 100%, and on a consolidated basis, media rights could sell for Rs 55,000 cr to Rs 60,000 cr.

Desai of Futurebrands Consulting says IPL is a hot property for media and advertisers. In addition, competition will ensure that offers remain above the base price. Those who are serious about the Indian market cannot afford to miss this property. But it would be a concern if viewership continues to drop, he says.

As analysts say, IPL is still a one-of-a-kind asset that allows advertisers to influence hundreds of millions of viewers while helping broadcasters gain an additional user base. Given this, the temporary drop in viewership will not be a drag on BCCI, which can expect media rights to sell well above its base price.


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