The Indian Premier League broadcast will now come up for sale for a five-year period only as against the 10-year window for which invitation inviting tender’ were floated in September 2016. The Board of Control for Cricket in India, being run by CEO Rahul Johri and governed by the Supreme Court-appointed Committee of Administrators, has decided to bring down the IPL media rights tender period from 10 years.
In another major decision, the BCCI has decided to invited combined bids for all the IPL media rights – BCCI combines IPL rights, fresh ITT for 5-year period.
The earlier media rights tender invitation wasn’t opened on the scheduled date of October 25, 2016. The new ITT, to be issued immediately after the day of the IPL 2017 final – May 21, 2017 – will now be for a collective period of just five years for broadcast and digital both. The decision to bring down the rights period by a good five years – from 2018 to 2022 – will ensure that the rights next come up for renewal just before the International Cricket Council (ICC) media rights in 2023. It is being seen as a masterstroke by the cricket industry, says a Times of India report.
“The ITT will be brought out soon after May 21, 2017 and bids will be opened after 45 days,” TOI has quoted a source in the know of developments. The 45-day window to submit bids will conclude a good 10 days after the ICC’s Annual Conference scheduled from June 19-23. That is bound to keep the member boards guessing over how the IPL media rights auction will play out. It will be clear that these (IPL) broadcast rights will next come up for renewal only after five years, which will then clash with the ICC global rights. So, that’ll be an interesting proposition for stakeholders,” a cricket industry executive said.
In the earlier ITT, BCCI had divided the rights into three separate buckets. The Indian sub-continent television rights on offer were for 10 IPL seasons (2018-2027); while India digital rights and rest of the media rights for 5 IPL seasons each (between 2018-2022). In contrast, the ITT now coming up next month will offer a single bucket with the Indian sub-continent television rights as well as the India digital and rest of the media rights all being offered for a stipulated period of five years.
This move, on part of the BCCI, eradicates doubts to an extent of there not being a level-playing field for all bidders, unlike the previous ITT that appeared to have put the television broadcasters in a likely position to sweep all rights. However, it is to be seen how the new ITT will allow BCCI to compare consolidated bids against bids for individual rights in a scenario where bidders can now put a figure for all three rights without breaking down individual component values.
BCCI’s move will shift the balance heavily in favor of broadcaster, the big players in this game. Interest by the digital players like Hotstar, Times Internet, Amazon.com Prime, Jio Digital, twitter, facebook and SonyLIV has intensified the heat for the digital rights. The rights which were bagged by Hotstar for Rs 302.2 crore for a three-year period were expected to see up to 250% upsurge for the next five year cycles.
The decision by the BCCI will certainly help Sony Pictures and STAR India, both having resources and platforms to acquire and exploit joint rights. The other players, who neither can consume broadcast rights directly nor would have planned the kind of financials, will have to rework their strategies. However, move by Reliance Jio will be interesting to see.
The tender document will call for separate bids for overseas rights, TV and digital, segregating them into five territories instead of six mentioned in the previous ITT as BCCI will look to maximize its revenue. The sub-Saharan market that had been opened up previously as a separate territory will now be clubbed along with the global rights. As mentioned in the previous ITT, agencies will not be allowed to bid for the subcontinent rights.
The due diligence of the process will be handled by Deloitte, and the legal due diligence would be handled by law firm Amarchand Mangaldas.
The previous media rights deal for IPL was originally bagged by the World Sports Group (WSG) in 2008 for 10 years at US$918 milllion, following which the deal was renewed with Sony Pictures – Multi Screen Media Pvt Ltd, back then – the following year for a total of US$1.63b (Rs 6.700 crore approax) for the next nine years. It was expected to fetch between Rs 18,000 and 30,000 crore for the next ten year cycle.
Sony Picture, as per their earlier agreement, had the rights of first refusal to renew their broadcast rights for the next cycle. However, the BCCI in September last year had decided in open tender process to allocate IPL rights for the period of next ten years. The digital rights, which were first acquired by Times Internet for a four year period and then Star TV-owned Novi Digital for the three year period, ending with IPL 10. The rights were coming up for renewal for a five year period.