There might eventually be only two bidders – Sony and Star – for the IPL media rights irrespective of the 24 entities acquiring the tender documents for various interests. Industry veteran Harish Thawani believes that the broadcast rights will be extremely rational and competitive, unlike the Rs 2,200 commitment Vivo has made for the IPL title rights .
All Sony and Star need is to overcome their respective fear and greed while churning out numbers, Thawani told Insidesport.co in an exclusive chat. Here are the excerpts:
Insidesport: There is a lot of hype around IPL media rights. After Vivo has committed an unprecedented Rs 2,200 crore for IPL title rights, a similar high bid is being foreseen for the IPL media rights. Do you foresee a windfall for BCCI?
Harish Thawani: Irrespective of all the hype, it will be a competitive bid. Other than Sony and Star, I don’t see a third player bidding for the IPL media rights. This will eventually be a two-horse race. At the most you may see one digital player. That too is highly unlikely.
IS: What can be the key factors to determine the bid value? What numbers do you put at these rights?
HT: It will be fear versus greed. If Sony overcomes its fear (of losing out its most precious sports property) and Star does not display an unwarranted greed, I foresee a very, very competitive and rational bid. Everything will go for a competitive price.
If, Sony and Star can overcome their fear and greed $1.2 billion is the fair, rational number. In a more desperate scenario, it may go up to $1.5 billion.
IS: As many as 24 entities have bought the bid documents. Don’t you see this kind of an interest will add to a fierce competition?
HT: As I said earlier there will not be more than two bidders. You see the past record. Buying a bid document doesn’t mean competition. The competition is in making bids.
IS: Then what is the idea of buying bid documents?
HT: A tender document does not cost a fortune. Majority of the buyers do not even find it compatible. The terms and conditions tilt the entire process in broadcasters’ favour. There is nothing much for a digital or e-commerce player.
IS: You said the tender is hopelessly loaded in favour of broadcasters. How does it discourage the other players?
HT: An 80% of the total values will come from the broadcast rights. Digital is just 20%. There are other riders which highly favour the broadcaster or a joint bid. In such a scenario, which digital player will make a bid when it needs only 20% of the rights value for its own consumption. Will he then go and sublicense the 80%?
IS: Considering the fact Reliance Jio is expanding its business fast and going all out to kill the competition, why shouldn’t the Mukesh Ambani Group company make a bold bid?
HT: Why should they? Reliance Jio is fighting to establish their more than 70,000 crore rupee business. Why should they have an unviable destruction? Secondly, they are in a privileged position. All broadcasters already have arrangements with them to carry their feel. So, whosever gets the rights will eventually come to them. Where is a need for them to go for these rights. It is a different story with the likes of AT&T, who combined wireless, internet, MPLS, TV and DirecTV business interests.
IS: Social media, e-marketing and mobile players in fray have real deep pockets. Don’t you see them becoming the game changers?
HT: I don’t see any of them even submitting a bid document. BCCI has this habit of making selective leaks. It has been the case with all their bids. As I said anyone can buy a bid document. It does not cost you much. What is important that how many parties make a bid. You see the past record from 2011 to 2017 there have been zero to two bidders in whatever tenders BCCI has floated. It will be the same this time, too.
IS: That means you don’t even see Amazon submitting a bid?
HT: They won’t. In India they are currently struggling to establish their prime business (e-commerce). They have already lost out of China. They are not the e-commerce market leaders (in India). It is Flipkart. Why should they have a destruction which they can’t afford.
IPL media rights for the 2018-2022 five year cycles will be decided on September 4 when the bids will be opened at the BCCI headquarters in Mumbai.
Harish Thawani is a broadcast industry veteran and founder of the Nimbus Communications. He was the brain behind Nimbus’ successful $612.18 million (Rs 2,714 crore) bid for BCCI’s global media rights in 2006 for a four-year cycle.