Media rights sale: IPL poised to make the big-money move

E-auction should see the value of the T20 league skyrocketing but more avenues could be unlocked

MUMBAI: The June 12 media rights e-auction could prove to be a pivotal moment not just for the Indian Premier League (IPL) but for world sport as well.

If the internal estimates of the Board of Control of Cricket in India (BCCI) are proved to be correct and the collective rights value across categories goes past ₹45,000 crore (approx. $6 billion, 2023-27), the IPL could become the second most valued league in the world. It would leap past the Premier League and Major League Baseball (MLB) and become second only to America’s National Football League (NFL). This is what is on the cards with the BCCI raising the ante by pegging the collective reserve prize at ₹32,890 crore, double that of the current value.

The comparative valuations are not in absolute terms as the leading sporting leagues are played across varied durations. The IPL has the shortest playing window and fewest matches (74 matches, 8 weeks) among them. The NFL sees 272 games played across 18 weeks. The Premier League and Bundesliga have a total of 380 and 304 matches respectively, played for nearly 10 months.

But purely in terms of media rights value per match, IPL’S value could shoot up from $8.5 million in (2018-22) to $16.21 million. As per Duff and Phelps IPL brand valuation report 2020, NFL tops the list with a per match value of $17.36 million. Since, NFL has cemented its numero uno position, having doubled up its valuation in the latest round of media rights sale, last year. NBA’S estimated future valuations are expected to nearly triple but given the sheer number of matches played in a season, it’s per match cost will go up proportionately.

For IPL, only a decade and a half old, to be on the podium with well-established European football leagues and American sporting leagues is an extraordinary success story.

“Comparisons are not completely representative because the other leagues sustain such high valuations across a much longer duration. But what IPL has clearly done is put cricket and India on the sporting world map in a short span of time,” says N Santosh, Managing Partner D & P Advisory.

With India’s demographic advantage and deep liking for cricket, the new media rights deal is expected to fortify BCCI’S financial clout in the larger cricket ecosystem.

In cricket, IPL is by far the most valued and highest paying league in the world. IPL’S player salary cap across ten franchises is ₹900 crore annually. English cricket board (ECB)’S Hundred and Cricket Australia’s Big Bash come a distant second and third with an approximate total pay purse of ₹80 and ₹75 crore respectively.

Overseas rights

But the commercial over-dependence on the India market also restrains the IPL from widening its reach to international pockets. As per a Sportingintelligence research report of 2019, Premier league by far leads the way in having a sizable media rights income from its overseas market (45.7% of total). Given football’s global appeal, Spanish La liga (44%) comes next followed by Serie A (27.9%). Despite the Super Bowl being one of the most watched single-most sporting events, the NFL’S gains outside the American market are limited (2.7%).

Cricket’s globalisation efforts have been slow but stakeholders see potential for IPL to grow overseas.

“There’s still potential for growth both in India and around the world with markets in the UK, US, UAE growing significantly over the last three to five years,” said Manoj Badale, lead owner, Rajasthan Royals. “We think that could increase even further, and it would be great to learn from the Premier League’s example where overseas rights equal their local rights.”

A closer look at IPL’S last rights cycle reveals IPL’S overseas value would have accounted for 5.5% of the total, had Star’s consolidated bid not won them all categories in one go. In the upcoming auction, the likes of South African sports network Supersport and UK’S Sky have purchased the media-rights tender for the Rest of the world category.

Social media reach

A key modern-day metric used to measure a property’s growing fan base is the league’s social media following. The IPL can significantly raise its game on this vertical placed at No 6 with an average follower count (Twitter + Instagram + Facebook) of 12.9 million. NBA aces the social media game with an average of 48.3m followers, followed by Premier League (46.7m), La Liga (43.4m) and NFL (24.2).

The social media phenomenon is relatively new and the foreign leagues’ first-mover advantage is neutralised. Given India’s huge cricket fanbase, the current numbers are modest. A significant handicap is IPL’S limited playing window and comparatively fewer teams playing.

“IPL’S relevance on social media is those 60 days and a couple of weeks before and after. That’s the inherent challenge compared to other leagues,” said Siddharth Raman, Deputy CEO at Sportz Interactive, which deals with fan engagement in sport. “In the long term, digital and social is where there is the next room for value unlocking in IPL. There are nearly 700 million people on the internet in India. Even if the IPL reaches half of them, you are talking about a league that reaches the population of US in two months.”

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