What explains the windfall from BCCI on IPL media rights?

0

Why did digital streaming rights get more auctions? How has the value of the league improved?

Why did digital streaming rights get more auctions? How has the value of the league improved?

The story so far: The Board of Control for Cricket in India (BCCI) had launched a tender for the award of the media rights for the broadcast of IPL from 2023 to 2027. The rights – classified separately for the first time for television and digital platforms – were sold for a combined sum of ₹48,390 crore compared to the ₹17,110 crore offered in the previous round. While Disney Star paid ₹23,575 crore to acquire the television rights for the Indian subcontinent, Viacom Group 18 paid ₹23,758 crore for the digital rights. Rest of the world rights were split between Viacom 18 and Times Internet Ltd. for a combined sum of ₹1,057 crore.

Why have TV and digital rights been separated?

Sensing that the consumption of IPL on digital platforms will increase significantly in the future, BCCI tried to follow the market trend of betting big on digital. The fact that digital rights for the Indian subcontinent brought in more revenue for BCCI than TV rights underscores that the decision to split the rights, along with the decision to conduct an online auction, proved to be a master stroke.

Does this mean that IPL will have more games in the next five years?

Yes. In fact, BCCI’s clarification to potential bidders regarding the increased number of games also resulted in additional revenue. As of now, the BCCI has announced that the IPL will see 410 matches from 2023 to 2027. Just like the 2022 edition, the next two years (2023 and 2024) will feature 74 matches. In 2025 and 2026, the IPL will stage 84 matches per season, with each team playing at least 16 matches, instead of the existing 14. Come 2027, and the total number of games will increase further to 94, with each team set to feature in at least 18 games.

Does Wealth in Broadcast Rights Mean More Money for Teams?

IPL’s revenue model is based on the equal distribution of 50% of the central revenue pool between franchises. The revenue pool mainly includes franchise fees (for two teams), media rights revenue and central sponsorship revenue. The central revenue pool for the next five years is estimated at ₹60,000 crore, which translates to ₹12,000 crore per year. This means that half of it – around ₹6,000 crore – will be split among the 10 existing franchises. An average assured annual income of ₹600 crore for franchise owners will be more than double that of the 2022 edition, estimated at around ₹275 crore.

Does this mean that players will also get richer?

Yes, but not proportionally. In 2022, the IPL had a cap of ₹90 crore for each franchise to put together a team comprising a maximum of 25 players. The cap is expected to reach ₹95 crore in 2023 and ₹100 crore in 2024. The modus operandi of team development itself may change thereafter. This means that players will definitely get rich, but not as much as expected.

Will IPL have more teams now?

With BCCI now set to secure a longer window for the IPL, in addition to relaxing the schedule a bit, the scale at which media rights have been sold has already led to murmurs within the BCCI on the need to increase the number of teams from 10 to 12 in 2027, if not in 2026.

Why didn’t the drop in TRPs have too much of an impact on the sale of media rights?

TRPs calculated using a conventional method in India do not include numerical reach figures. Plus, TRPs were doomed – with COVID-19 restrictions lifted, a majority of families preferred going out during the summer holidays rather than being forced to enjoy an IPL game at home in the evening. .

What awaits us?

The introduction of two separate broadcasters for IPL in India for TV and digital platforms may lead to increased load for IPL fans. It will be interesting to see how BCCI uses the additional revenue. The need of the hour is to strengthen the supply line for men’s cricket, especially the national cricketers, age group cricketers, match officials and dozens of association foot soldiers. State. In addition, BCCI must ensure that there is a solid financial model for women’s football at all levels. The announcement by the BCCI of an increase in pensions for those who retired before 2004 is certainly welcome. But experts say that’s far from enough.

Share.

About Author

Comments are closed.