Billionaire Mukesh Ambani’s media venture has acquired digital streaming rights to Indian Premier Leagueoutbid giants from The Walt Disney Company to Sony Group Corporation, according to a person familiar with the matter.
The person said that the online rights to the popular annual cricket tournament had been awarded to Viacom18 Media Pvt., a joint venture between Paramount Global and Ambani’s Reliance Industries Ltd. The Cricket Control Board in IndiaThe sport’s local governing body began the auction June 12, which has yet to officially announce the winners.
The Financial Times reported that Viacom18 bought the rights for about $2.6 billion, while the New York Times reported that the deal was close to $3 billion. However, Disney raked in about $3 billion in television rights to the matches, the FT said.
The five-year digital contract is a major win for Ambani’s group, which has ambitions to join the streaming and global media giant. Described as the Super Bowl of cricket, the IPL is one of the fastest growing sporting events in the world with a cult status in South Asia and among the subcontinent. Attracting more than 600 million viewers, it is also considered the fastest way to gain attention and scale the audience of any platform in India, the world’s largest consumer market with almost 1 million people. ,4 billion people.
Representatives for Reliance and Disney did not immediately respond to requests for comment. Shares of Disney fell 3.7% on Monday amid a widespread market sell-off, dragging this year’s losses to 38%.
Long-lasting adhesion
Utkarsh Sinha, managing director, Bexley Advisors, a technology-focused boutique investment firm, said: “IPL is one of the highest conversion drivers in a highly competitive OTT market. fiercely, where saturation and fragmentation of consumer wallets are rapidly becoming insurmountable challenges. and media. “It provides long-term engagement, which is again very difficult to achieve as users exhibit fickle loyalty to platforms and flexibly move to the location of the content.”
Four contracts starting in 2023 have been signed, covering a wide range of TV and digital rights, as well as a host of important matches, in the Indian subcontinent and abroad. BCCI first privately auctioned IPL’s broadcasting and streaming rights.
Although Amazon.com Inc. withdrew from last moment, the auction saw stiff competition, with total bids surpassing 450 billion rupees ($5.8 billion) by the end of its first day, surpassing the 328 billion rupee floor price set by the BCCI, Bloomberg News reported. That’s almost three times the amount collect at the previous auction in 2017.
Cricket, a quintessential British summer sport, has a lot of fans mostly British Commonwealth countries, and especially in the Indian subcontinent. Only follow English Premier League and National Football League Globally popular, IPL is increasingly seen as an important catalyst for any media company looking to engage Indian consumers online for shopping and entertainment.
IPL is valuable at 458 billion rupees ($5.9 billion) in 2020 by Duff & Phelps, now known as Kroll. Santosh N, managing partner of D and P India Advisory Services, which can now be 25% higher, has helped in part by bringing in two new teams, bringing the game count to 74 games in the season just ended. end. The league currently has 10 teams.
Started in 2008, IPL is a much shorter and more interesting format. Usually held in April and May, each match lasts about four hours, compared to the one-day version and the classic version five days of cricket testing famous for its tea parties. IPL match stadiums have festive merchandise and atmosphere, often with Bollywood actors cheering from VIP boxes.
Sigh of relief
Although Disney lost the inherited rights in 2019, the acquisition Fox Inc’s 21st Century. global entertainment property, some shareholders can breathe a sigh of relief. Disney+ Hotstar subscribers pay an average of 76 cents a month for the service. That’s less than $500 million in annual sales, so it’s hard to justify the annual royalty fees.
Ben Swinburne, an analyst at Morgan Stanley, wrote in a May 12 research note that “the profit potential outside of India is minimal” and would not have had a significant impact on earnings if Disney didn’t contract. CEO Bob Chapek told investors in February that while cricket is a key component of their product offering, the new local content the company is developing in India will minimize impact.
“It’s not like we see that business disappear if we don’t get a hold of it,” Chapek said.
The loss, however, could weigh on the Burbank, California-based company’s ambitious goal of reaching 260 million subscribers globally by 2024. While rival Netflix Inc. Losing subscribers last quarter, Disney+ added 7.9 million customers. More than half of that comes from Disney+ Hotstar, which is made available in India and several other Southeast Asian countries. Ten additional IPL matches last quarter boosted Disney’s international ad revenue.
For Reliance, a first-time contractor in IPL’s 15-year history, the cricket streaming rights also aim to fuel the e-commerce and retail ambitions of tech venture Jio Platforms Ltd.
Reliance “engaged with the deepest pockets and longest viability to create IPL assets,” said Sinha of Bexley Advisors. “As the consumer media wallet continues to be split into smaller chunks in an overcrowded market, Reliance may be approaching it with a ‘merge and dominate’ strategy. The IPL win is a strategic step in that direction.”
