Why are digital streaming rights high in auction? How has the value of the league improved?
Why are digital streaming rights high in auction? How has the value of the league improved?
the story So Far: The Board of Control for Cricket in India (BCCI) had floated a tender for granting media rights for the telecast of IPL from 2023 to 2027. Rights – for the first time were classified separately for television and digital platforms.Old for a total amount of ₹48,390 crore ₹17,110 crore from the previous cycle offered. While Disney Star paid ₹23,575 crore to acquire the television rights for the Indian subcontinent, Viacom18 Group spent ₹23,758 crore for the digital rights. The rest of the world rights were split between Viacom18 and Times Internet Limited for a combined amount of ₹1,057 crore.
Why are TV and digital rights divided?
Considering that the consumption of IPL on digital platforms will increase drastically in future, BCCI tried to stay ahead of the market trend to bet big on digital. The fact that the digital rights of the Indian subcontinent have brought BCCI more revenue through TV rights, underscores that the decision to split the rights as well as conduct e-auction has turned out to be a masterstroke.
Does this mean that there will be more games in the IPL in the next five years?
Yes. In fact, BCCI’s clarification about the increase in the number of games to potential bidders resulted in an increase in additional revenue as well. For now, the BCCI has announced that there will be 410 games in the IPL from 2023 to 2027. Like the 2022 edition, there will be 74 games over the next two years (2023 and 2024). In 2025 and 2026, the IPL will stage 84 games per season, with each team playing at least 16 games instead of the current 14. Come 2027, and the total number of games will increase to 94, featuring each team. In at least 18 games.
Does broadcast rights money mean more money for teams?
The IPL revenue model is based on 50% of the central revenue pool being divided equally among the franchises. The revenue pool mainly consists of franchise fees (for two teams), media rights revenue and central sponsorship revenue. The central revenue pool for the next five years is estimated at Rs 60,000 crore, up from Rs 12,000 crore annually. This means that half of it – around Rs 6,000 crore – will be divided among the existing 10 franchises. An assured average annual revenue of ₹600 crore for the franchise owners would be more than double that of the 2022 edition, which is estimated to be around ₹275 crore.
Does this mean that players will also get rich?
Yes, but not proportionately. In 2022, there was a limit of Rs 90 crore for each franchise in the IPL to assemble a team with a maximum of 25 players. This limit will increase to ₹95 crore in 2023 and ₹100 crore in 2024. After this, the modus operandi of development of the squad may change. This means that the players will definitely get rich but not as much as is being speculated.
Will there be more teams in IPL now?
With the BCCI getting a longer window for the IPL from now on, apart from relaxing the schedule a bit, the scale at which the media rights have been sold has already created ruckus within the BCCI that the numbers need to be increased. 10 to 12 teams in 2027, if not 2026.
Why didn’t the falling TRP have much of an impact on the sale of media rights?
Traditionally calculated TRP in India does not include digital outreach numbers. Also, the TRPs were bound to drop – with the COVID-19 restrictions being lifted, most families preferred to step out during the summer vacations rather than being forced to enjoy an IPL game at home in the evening.
what is next?
The introduction of two separate broadcasters for IPL in India for television and digital platforms could add to the burden on IPL fans. It will be interesting to see how BCCI utilizes the additional revenue. The need of the hour is to strengthen the feeder-line for scores of men’s cricket, especially domestic cricketers, age-group cricketers, match officials and state association foot-soldiers. In addition, the BCCI needs to ensure that there is a sound financial model for the women’s game at all levels. BCCI’s announcement of increasing pension for those who retired before 2004 is certainly welcome. But experts say this is not enough.