Star India wins IPL global media rights for Rs 16,347 cr

Star India placed the winning bid for the media rights to the Indian Premier League (IPL) for the next five years. The consolidated global bid for the Ipl media rights placed by Murdoch's India subsidiary was Rs 16,347 crore, exceeding the sum of the individual bids, which was Rs 15,819 crore.

Star India was the only bidder to place a global bid. Sony Pictures Network India, the incumbent television rights holder, bid for the India TV rights for Rs 11,500 crore. This was the highest individual bid in any category.

The sum of all the rights bids in case of Star India was Rs 7,882.47 crore. However, this time, the BCCI had allowed companies to put in one composite bid for global TV and digital rights, which could be different from the sum of the individual bids the company has made.

The suspense over Board of Cricket Control for India’s tender for media and digital rights is set to end soon. Both television and digital rights are up for grabs for the Indian sub-continent and media rights for Rest of the World. BCCI’s CEO, Rahul Johri, has gone on record estimating the rights will fetch in excess of Rs 18,000 crore. Going by the past BCCI estimates, this represents a 400 per cent increase! That is indeed a very very steep rise.

This is naturally going to impact both advertising rates for clients and the cost of access for viewers. To put things in perspective, in the past 10 years advertising rates on television have inched up, but ever so slowly. That too, it is only for the IPL that ad-spot rates have increased about 100 per cent over the period. Rates for the rest of India cricket, including for Tests, ODIs and T-20s have largely remained flaccid, perking up only on special occasions. The moot question today is whether the advertising market is ready to support a 400 per cent escalation and if the cricket fan is willing to pay that much more for his IPL?

Prima facie, there is bound to be a lot of resistance from advertisers. So BCCI may rake in the moolah, but the winner may actually end up bleeding hundreds of crores. An increase in ad rates, that too starting immediately, is both improbable and impractical. The same applies to distribution revenues. For the rights holder, therefore, costs are fixed, pre-committed and front-loaded during the tenure of the rights period, and gains (if any) are at best in serious lag mode. To industry watchers, that is a most-likely scenario.

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