Sunday evening was all about counting zeroes. Do you know how many there are in 20,000 crore? For one, they are more than the fingers you have. It is an unimaginable sum at best, and yet, it was easily the estimated price ceiling (educated guess in simpler terms) for five years’ worth of Indian Premier League rights.
Star India came close, rather came out with the winning bid, and the IPL has now shifted its base until 2022. Rs 16,347.50 crore, roughly translated to $2.55 billion, means Star is paying the Board of Cricket for Cricket in India Rs 54.5 crore per IPL match over the next five seasons. It is more than the Rs 43 crore that Star already pays the BCCI for every international home game in India.
Is this a surprising bid? Not really. Star were desperate for IPL rights ever since the tournament exploded onto the scene, and it was visible in the manner they had aggressively bid for Champions League T20 in 2008-09. They had bought into this league-version of this shortest format and paid huge money for an event that they hoped would have a rub-off effect from the initial years of the IPL. Sadly enough, it didn’t happen for them and the Champions League is now defunct.
It is no wonder then that Star threw the kitchen-sink at this five-year rights’ cycle. Look at the bidding process, and their desperate ploy becomes clear. Only Star and Sony could have made global bids — which include the entire rights bouquet of telecast and digital across India as well as rest of the world. Sony didn’t go for it, albeit surprisingly, given their Sony LIV platform could have benefitted from it. Star has a grander dual platform — television channels plus Hotstar — and thus their global bid made a lot of sense.
The devil is in the individual rights’ detail. Star’s individual bid for telecast (Rs 6,196.94 crore) and digital rights (Rs 1,443 crore) were low as compared to Sony’s telecast bid (Rs 11,050 crore) and Facebook’s digital bid (Rs 3,900 crore). It was a risky strategy from the broadcasting giant for they could have lost everything if their global bid hadn’t been higher than the sum of highest individual bids across different categories.
This is where Star’s comparatively smaller bids for rights in rest of the world categories — Europe, US, Africa, Australia and rest of the world — made sense. They were able to gain a broader perspective on how the bidding would functionally play out. So much so, Star’s global bid was nearly twice as higher as the sum of its individual bids in different categories. It was one shot, one play, and they made it work, even if in desperation to land the most valued property in world cricket.
There are obvious questions to ask here, and the first among them being, what does it mean for the IPL and Indian cricket in general? Let it be reiterated that there is no surprise whatsoever that the bidding price has gone so high, and that too just for a five-year rights’ cycle. In 2008, when Sony-MSM paid Rs 8,200 crores for ten years, it was approximately half this amount, and across five years, it actually comes out to be one-fourth on per-season calculation.
At that point in time, the BCCI did not know what the IPL was or how valuable it was. Tarred with incidents of match-fixing, controversies about adding matches and new franchises (then cutting them off), and finally suspending two franchises for the past two years, no one even half-anticipated the monstrosity this T20 franchise league would become in the span of just a decade. Today, the IPL has unlocked its true potential as the most valued property in world cricket.
It has survived all those sour moments in the past, and continues to grow stronger. There is a buzz of anticipation about the returns of Chennai Super Kings and Rajasthan Royals, as surprising as it may sound. Demonetisation too didn’t hit the advertising rates for 2017 IPL, and a BCCI official confirmed the same with much pleasure. In that sense, the IPL truly is bullet-proof. And it is singularly representative of the power of the billion-strong fandom for cricket in this country. The Indian cricket market drives the economy of world cricket and there can be no better pointer of the same.
Of course, it doesn’t mean that the IPL has peaked just yet. This bid is perhaps the tip of the iceberg, when you consider the per-match earnings of different sports events across the world. The IPL ($8.92 million) comes in only third as compared to the NFL ($23.43 million) and the Premier League ($13.15 million), but time is a measure of objectivity here. The NFL came into existence in 1920, while the English Premier League was founded in 1992. Compared to them, the IPL is still in its nascent stage.
A keen indicator to how big the IPL can be in the future is to be found in the digital space. Facebook bid a whopping Rs 3,900 crores, which is roughly $6 million. Two other players — Reliance’s Jio TV and Airtel — also bid in excess of 3,000-plus crore for the same digital rights. The Facebook bid alone is one-fourth the size of the winning bid from Star. That is where the future of sports entertainment lies, in digital space and this marks the starting point for the world of cricket.
Last but not the least, what are the implications for the international arena? Clearly, the future lies in T20 cricket, and franchise leagues will only gain in prominence. Every major country has one already, and their growth cannot be stopped for that is where the money truly is. Perhaps it will have a positive ripple effect on the jam-packed international calendar, and allow the longer formats — Tests and ODIs — to actively seek the context they are so desperately lacking.
To read why the massive sum splashed out for IPL is not not logical, click here.