Why is the race for IPL media rights still intense?

It had all the ingredients of a racy cricket match -- something which we usually see during IPL sessions. And a lot was at the stake. Global tech majors Amazon, Alphabet and Apple Inc were among the giants vying for the media rights to broadcast IPL matches for the next five years.

But on Friday, the three US giants dropped out of the race, leaving seven competitors in the fray. And of them, Viacom18, Disney-Star, Sony and Zee were involved in the bidding war for the Indian Premier League’s 2023-27 cycle.

In Monday morning’s session, the IPL TV and digital rights auction had closed at a total value of Rs 43,255 crore, which translated to Rs 105.5 crore per match. That value subsequently increased to Rs 44,075 crore. Meanwhile, the revised per-match value stood at Rs 107.5 crore.

A Business Standard report, while citing sources, said that there was an incremental bid of 50 lakh rupees placed in the television category, thus taking the per-match value for TV to Rs 57.5 crore from Rs 57 crore, which was the figure at the close of bidding on Sunday.

The total value of IPL TV rights now stands at Rs 23,575 crore for 410 matches. Meanwhile, the digital rights have also increased to Rs 50 crore per match, or Rs 20,500 crore overall, from Rs 48 crore per match or Rs 19,680 crore earlier. And the winner were Viacom 18 and DisneyStar. While Viacom 18 bagged the digital rights for IPL, DisneyStar got the television rights.

These numbers have propelled IPL to the spot of the number two sports league in the world. The per-match value of the IPL has touched Rs 107.5 crore. This is second only to America's National Football League, which costs a broadcaster Rs 132.26 crore per match. The English Premier League costs Rs 85.58 crore per match.

Let's put the growth in valuation in perspective. Disney-Star had bagged the combined digital and TV rights for the IPL in 2017 for Rs 16,347.50 crore. Back then, the per-match value stood at Rs 54.5 crore.

These numbers will also come as a big relief for the IPL and BCCI. In recent weeks, a sharp fall in IPL’s TV viewership had led some to question the base price set for the media rights. Sony Pictures Networks India’s MD and CEO NP Singh had told a financial daily that the reserve price needed a reality check amid this decline in viewership. 

Compared to last year’s figures, IPL’s viewership fell by 30-35 per cent in the first four weeks of the 2022 season. In fact, with viewership falling consistently, reports said that some advertisers had even asked Disney-Star to make good their losses by offering them spots on alternate high-impact properties.

So, what explains the premium that IPL still commands? Also, what will be the impact of TV and digital rights going to different players?

The BCCI and IPL franchises are the biggest gainers from the auction. The money involved in the auction has also made a few things clear -- IPL is still a hot property for both media houses and advertisers. It is still a one-of-a-kind asset that helps broadcasters gain an additional user base and gives advertisers sway over hundreds of millions of viewers. But, there is one concern that needs to be addressed. In May it was reported that the CBI has started a country-wide probe into the alleged fixing of IPL matches. There is even a Pakistan angle to it. Were the IPL’s credibility to be damaged, it would be a huge step back after Indian cricket’s giant leap on Monday.