BCCI set to rake in close to Rs 50,000 crores for five-year media rights for IPL

The Board of Control for Cricket in India (BCCI) is set to have a massive windfall as it gets ready to open the tender to sell the digital media rights of its most lucrative cash cow - the Indian Premier League (IPL).

The Indian board is in the final stages of finalizing the tender and market experts, as well as potential bidders, believe that the combined value of media rights for a five-year-cycle could choose to INR 50,000 Crores.

This is roughly more than three times the money that Star + Disney shelled out to buy the five-year media rights cycle (INR 16,347.5 Crores) back in 2017.

Apart from Star Disney, Sony Pictures Network (SPN), Amazon Prime Video and Reliance Industries-owned Viacom18 are expected to be the potential bidders.

"The value of the rights will be more than anything one could imagine," said a senior executive at a consulting firm. "If you go just by the profit and loss statement, the value could not go beyond INR 30-32,000 crore, but it’s the strategic value that every player will attribute to the property depending on their business which will swing the overall value," said a source close to one of the bidders as quoted by Economic Times.

"It’s debatable whether Star & Disney India recovered or made money on their bid, but on the back of the property, they also built Hotstar," he said. "For any potential bidder, the value will be the new or incremental subscribers that the rights will get." Disney+Hotstar is the company’s streaming platform," he added.

Last year, BCCI President Sourav Ganguly had expected close to INR 40,000 crores for the IPL media rights but market experts believe that it will be more than that.

In fact, managing director of a sports marketing firm, Baseline Ventures, Tuhin Mishra has reckoned that it will be a case of 'breaking the bank' for the bidding player to get the rights.

"Grapevine has it that, in the end, the firm loses money over the rights period, but then rights are sought after not only for profits," he said. "A lot of times, it could be for valuation or simply existence. It’s not always rationality attached to the high numbers." he said.

Initially, the BCCI was scheduled to open the tender on February 10, but it was delayed as the board, along with KPMG, is still busy finalizing the document.

A BCCI faction was earlier in favor of a closed auction, but given the fact that there are at least three-four players, who are ready to "break the bank" to earn the much-vaunted rights, the board decided In favor of conducting an e-auction.

"The final shape is being given to the packages, and in another 10 days, the ITT will be out." said the person mentioned above.

Star Disney will be aware of the fact that their subscriber growth is largely dependent on the IPL and their aggressive bidding should be a reflection of that.

"We have seen how Netflix's stock was hammered down due to slow subscriber growth guidance," he said. 

"The same thing will happen to Disney stock in the US if they are not able to show strong subscriber growth, which is why the company will be bidding aggressively," he added.

Meanwhile, the mega auction was conducted last week in Bengaluru, where close to INR 250 Crores were shelled out by 10 franchises.

The 15th season of the IPL is likely to commence in the last week of March.