The governing council of Indian Premier League (IPL) will soon take the final call on the sale of media rights. The broadcasting and digital streaming rights of the largest T-20 cricket league in the world will be auctioned soon for the third time in 15 years.
The Board of Cricket Control in India (BCCI) is all set with the invitation to tender (ITT) for the 2023-27 cycle and the process of e-tender is likely to kick off in the upcoming week. To ensure transparency in the process, BCCI has opted to go ahead with e-auction. The entire process is overseen by Jay Shah, who serves as the secretary of the board, and is positive that IPL is the hottest sports property in the country and continues to attract domestic and global players in India.
Market participants believe that media rights may fetch Rs 45,000 crore mark in the latest round of auction, which were sold for Rs 16,247 crore for the 2018-22 cycle. Interestingly, for the first 10 years (2008-17), the media rights were sold only for Rs 8,200 crore. In an interview to Times of India (TOI), Jay Shah said that the board is keen on maintaining transparency in the entire process, which is feasible via e-auction. Also, it wants the true valuations justified for the brands like IPL. The latest auction of two new teams- Lucknow and Ahmedabad- have boosted the morale of the board which fetched robust valuations lately.
The popularity and confidence of investors lifted high after the recent franchise sale. "We are very clear that the process we shortlist should fetch the league the right value it deserves, though the processes should remain transparent throughout. E-auction will provide all bidders an equal and fair platform to stake their claim," said Shah.
The latest round of auction will include new and innovative features, exploring the bidding package for digital streaming as well. BCCI is planning to conduct the entire process via intranet, instead of internet. Shah says that the numbers from the auction will benefit Indian cricket eventually.
Digital streaming and OTT players are going aggressive after the pandemic to compete with the television broadcasting and explore the digital space. There are multiple players lined up to host the upcoming season of the IPL on their platform for the digital subscribers. Amid the pandemic years, when there was no crowd allowed in the stands, IPL viewership on the digital platforms sky-rocketted and is likely to increase over in the near future.
In 2008, digital rights were an elephant in the room, attracting only 5 per cent of the overall value, whereas within a decade, Facebook's Rs 3,900 crore bid addressed the online space as a heavyweight. Its share increased 25 per cent of the overall value. However, by the end of 2022, when the second half of IPL was completed, the new technology captured the market shares to little less than 50 per cent. Changing the game now, the digital technology is now expected to attract bids in the range of Rs 18,000-22,000 crore, which is about half of the overall value.
To ease up the process of valuation mathematics, BCCI has hired the professional consultancy firm KPMG to support the bidding process. The next seasons of IPL are likely to fetch more ratings because the number of games will be increased to 94 from existing 60 games a season after the addition of two new teams. The IPL governing council shares the amount from the media rights with franchises and thus, the high valuations for broadcasting leads to higher shares for the franchises. This will not only boost the topline for the teams like Chennai Super Kings, but the more number matches leads to higher advertisers display in the cricket league.
The new auction of media rights will set the benchmark for the valuations of the Indian Premier League as a whole and uplift the brand value of franchises. The new teams fetched the valuations of about Rs 7,000 crore, whereas the profit making existing franchises are likely to become unicorns soon.