Disney Star, Sony-Zee, Viacom 18, and smaller media players are expected to invest more than $11 billion on marquee cricket properties during the 2023–2027 cycle, officials and analysts said.
“Cricket continues to attract huge investments since it guarantees eyeballs,” said Rajesh Kaul, head of sports business at Sony Pictures Networks India (SPNI). “It also holds strategic value for rights holders since it drives the growth of both OTT and TV businesses,” he said.
The Indian Premier League (IPL) and the International Cricket Council (ICC) have recently sold five-year and four-year media rights for the Indian market at $6.2 billion and $3 billion, respectively.
Industry experts are optimistic that the media rights of the Board of Control for Cricket in India (BCCI), which are soon to be put up for bidding, could generate more than Rs 10,000 crore, or $1.2 billion at the current exchange rate.
The media rights of Asian Cricket Council (ACC), which conducts Asia Cup and some other tournaments for Asian teams, are also up for renewal this year.Furthermore, prominent cricket rights outside of India, such as those for Cricket Australia, Cricket South Africa, and the England Cricket Board, have been acquired by Disney Star, Viacom 18 and Sony for about $500–600 million.Bhairav Shanth, cofounder of leading sports, entrainment and media consulting firm ITW Consulting, said live sports will continue to see big investments in sponsorship as well as media rights. “Globally, sports assets are only growing in value, and not just for a direct return on investment reasons,” he said.
High upfront investments in sports are likely to pay off in the long run, Shanth said. “The reason we are seeing much higher values for cricket rights is due to the growth in popularity of the sport, rise in digital consumption, and competitive intensity,” he added.
Three major players – Disney Star, Sony and Viacom 18 – are actively vying for key sports properties in India. Zee Entertainment Enterprises Ltd (ZEEL), which is currently in the process of merging with Sony, has also re-entered the sports business by securing the rights for ICC TV and Indian T20 League media.
People aware of the development said BCCI is considering a four-year cycle for media rights to bilateral matches involving the Indian cricket team to be played in India. It is also contemplating splitting the TV and digital rights to maximise the value of the property, they said.
“The valuation of BCCI media rights will depend on multiple factors, including the format of the matches (tests, ODIs, and T20s), the demand and supply situation, and the outcome of the Zee-Sony merger,” said a media analyst who requested anonymity.
The analyst said the combined value of media rights for the IPL, ICC, BCCI, and ACC could reach about $11 billion.
The person, though, anticipates a cautious approach when it comes to the bidding for BCCI media rights, considering that the companies have already committed $9 billion towards IPL and ICC rights.
Disney Star, having committed $6 billion for IPL TV and ICC media rights, has sub-licenced the ICC TV rights to ZEEL for an estimated $1.5 billion. Viacom 18 has obtained the IPL digital rights for $3 billion.
In April 2018, Disney Star had acquired BCCI media rights for five years for Rs 6,138 crore, which amounted to about $944 million at the then exchange rate of Rs 65 to the dollar.
Monetisation becoming tougher
The value of cricket rights continues to soar in India in spite of monetisation challenges amid macroeconomic and regulatory changes.
Overall ad spending on the recently concluded IPL had dropped by almost 20% to Rs 4,000 crore. Disney Star, the broadcast rights holder, saw a significant drop in its ad earnings while digital rights holder Viacom18 fell short of its lofty targets.
“It will be very difficult for media companies to recover their investments in cricket rights,” media veteran Kunal Dasgupta said. “There could be a price correction once these properties come up for renewal.”
According to him, financial commitments made by media companies for cricket rights over the next four years are estimated to range between $10 billion and $12 billion.
Dasgupta said Viacom 18 is investing heavily in sports since it wants to build JioCinema. Disney wants to remain in cricket to protect its revenues. Sony, he said, is focused on profitability and will stay away from loss-making properties.
Unbundling IPL’s TV and digital rights, meanwhile, paid rich dividends for the Indian cricket board last year. In rupee terms, the value of IPL media rights has trebled from Rs 16,000 crore in the 2018–22 cycle to Rs 48,000 crore in the current cycle.
ICC, too, had sold the global media rights to Disney for $2 billion for 2015–23. For the upcoming cycle, it has sold the media rights for just the Indian territory for $3 billion.
“The value of the cricket rights is on the rise due to an increase in the number of matches and the entry of a new player like Viacom 18,” a high-ranking media executive said on condition of anonymity. “Compared to TV, the value of digital rights will continue to grow.”
The executive believes inflation in cricket rights fees would take a toll on the value of non-cricket sports.
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