BCCI Media Rights: Acquisition Of TV And Digital Rights Adds To Viacom18’s Rise In Cricket Broadcast World

BCCI media rights: Acquisition of TV and digital rights adds to Viacom18’s rise in cricket broadcast (Image Source: IANS)

On Friday, it was all green for the stocks of TV18 Broadcast Ltd. and Network18 Media and Investments Ltd. There was a good reason behind their stocks witnessing a jump: Viacom18 Media Pvt Ltd. acquiring the BCCI media rights, comprising international and domestic games, in television and digital for the next five years.

In an e-auction conducted by the BCCI on Thursday, Viacom18 beat competition from Sony Sports Network and Disney Star to get both TV and digital for broadcasting 88 matches, for a cumulative figure of INR 5,963 crores, which translates to INR 67.75 crores per game for the 2023-28 cycle.

This figure is just 12.91% more than INR 60 crores per game Disney Star paid in 2018-23 cycle. With Disney Star not being aggressive and Sony Sports Network’s numbers falling short of Viacom18’s winning bid, the media rights auction showed that the Mumbai-based conglomerate went aggressive from the word go and walked away with everything on the table, which industry people say is good from a business perspective.

“We believe that a single entity securing both TV and digital rights is mutually advantageous, as it enhances negotiating power of the platform. This allows them to offer bundled options to advertisers.”

“In contrast, when two separate players acquire TV and digital rights, it fuels competitive rivalry between platforms, resulting in a dampening effect on overall revenues (IPL revenues were down YoY in CY23); we believe bundling prevents advertisers holding a stronger bargaining position as compared to the platforms,” said Karan Taurani, Senior VP-Research Media Analyst at Elara Capital, in his report.

For starters, Viacom18 is a relatively newcomer in the cricket broadcasting world through its TV channel Sports18 and digital platform Jio Cinema. Apart from making its first large scale acquisition via BCCI media rights and ensuring its visibility for a large part of the year, Viacom18 is also the holder of TV and digital rights of the Women’s Premier League (WPL) for INR 951 crores till 2027.

It also has the digital rights of the 2023-27 IPL cycle bagged for a whopping INR 23,758 crores, where it offered IPL 2023 viewing for free, as well as the Australia, South Africa and United Kingdom broadcast rights. Viacom18 also has the Cricket South Africa matches rights to be broadcasted in India from 2024-31. 

“Acquisition of BCCI bilateral rights will also enable Jio cinema to become even bigger in the Indian OTT ecosystem; the platform has an AVOD market share of ~22-24% already in CY23, after factoring IPL revenue and other content; revenues can scale up further due to these bilateral rights.”

“This in turn will intensify competition in the OTT segment and work negatively for other broadcast-based OTT players like Sony, Zee, Disney+Hotstar. It will also continue to negatively impact SVOD revenue growth for Indian OTT, as Jio Cinema may continue to offer content free,” added Taurani.

Apart from Viacom18’s rise, another point to note has been how digital has got a slight edge over television in per game payment. After IPL media rights auction showed digital edging TV, the same happened in the BCCI media rights auction, with TV fetching INR 32.5 crores and digital getting INR 35.3 crores per game.

“Further, in this case, the cost of per match on digital has surpassed cost of per match on TV, as digital is 8% higher on a per match basis; in the case of IPL - TV and digital were largely on par on a per match basis,” added Taurani.

The bigger talking point would be the value of India bilateral cricket rights shrinking and not coming close to the highs of the IPL rights. With the proliferation of T20 leagues around the world and IPL getting bigger, the 2023-28 media rights price was mere 13% higher on a per match basis vs the earlier cycle.

“Overall premiums (vs earlier cycle) for these rights been much lower vs IPL due to 1) lower number of T20 matches, 2) less interest in bilateral matches with a large tournament like IPL garnering interest on home grounds already.”

“3) lesser number of platforms bidding for the same and 4) a poor ad environment over the last one year; IPL had attracted a premium of 117% on a per match basis vs it’s last cycle price, whereas these rights have come at a premium of mere 13% on a per match basis vs it’s last cycle’s price,” stated Taurani.

The auction also showed that slowly, the monopoly of Disney Star is ending in India’s cricket broadcast scene. Despite getting IPL TV rights, Disney Star losing out on IPL digital rights to Viacom18 meant it quickly lost subscribers.

Though Disney Star bagged rights to broadcast all ICC men's and women's events in India from 2024 to 2027, it quickly sub-licensed TV rights to Zee, who would soon be merging with Sony. Moreover, reports of de-merger and losing Hotstar revenue meant it wasn’t able to break the bank for bilateral rights.

For now, Viacom18’s cycle of showing India’s matches will begin from the three-match ODI series against Australia from September 22-27, a preparatory series before the Men’s ODI World Cup.

Its role will be to ensure the presentation and packaging of the matches, whether at international or domestic level, should be great enough to sustain interest of viewers in bilateral international cricket so that it remains in green, just like its stocks today, for next five years.