As IPL media rights e-auction kicks off, a look at how the process will unfold

The high-stakes Indian Premier League (IPL) media rights e-auction is underway with Package A (Broadcast rights for Indian sub-continent) and Package B (Digital rights for Indian sub-continent) up for grabs. The auction will be a continuous bidding process and will continue until only one of the bidders remains active. The overall base price is Rs 32,890 crore.

The qualified bidders who will participate in today's e-auction are Disney Star India, Sony Pictures Networks India (SPNI), Zee Entertainment Enterprises Limited (ZEEL), and Reliance Industries-promoted Viacom18. A slew of bidders like Times Internet, Sky Sports, SuperSport, and Fun Asia are also in the race for international media rights excluding the Indian sub-continent.

As per the IPL tender document, a simultaneous e-auction will be conducted for Package A and Package B; and the day after the completion of the e-auction for Package A and Package B, a simultaneous e-auction shall be conducted for Package C and Package D. Package D will be further segregated into the different Territory Groupings in ROW, and E-Auction for each such Territory Grouping shall take place in parallel. 

The document further states that the highest bidder for Package B will have the right to increase its bid for Package B within 30 minutes of the Package A Winner being declared by the BCCI.

The highest bidders for Package C and each Territory Grouping of Package D will have the right to increase their bids for Package C and D respectively, within 30 minutes of being declared as the highest bidders.

Upon identification of the highest bidder for Package B, the Package A winner will have an option to offer a 5% higher rights fee than the highest bid price for Package B. If Package A winner exercises its option within the time period specified by BCCI, then there will be an auction process between the Package A winner and the highest bidder for Package B, with each entitled to make a minimum incremental bid which is 5% higher than the previous Bid.

If Package A Winner does not exercise its option within the time period specified by BCCI, then the highest bidder for Package B will be declared the winner.

Once the highest bidder for Package C is identified, the Package B Winner will have an option to offer a 5% higher rights fee than the highest bid price for Package C. If the Package B winner exercises its option within the time period specified by BCCI, then there will be an auction process between the Package B winner and the highest bidder for Package C, with each entitled to make a minimum 5% incremental bid than the previous bid.

If Package B Winner does not exercise its option within the time period specified by BCCI, then the highest bidder for Package C will be declared the winner.

Upon identification of the highest bidder for Package D or in the absence of any bid for Package D, the Package B winner will have an option to offer a rights fee that is 5% higher than the highest bid price for one or more of the Territory Groupings of Package D and in the absence of any Bid for Package D, Package B Winner will have an option to offer 5% higher rights fee than the reserve price for one or more of the Territory Groupings of Package D.

If Package B winner exercises its option to bid for Package D and at the same time there is a highest bidder for Package D then there will be an auction process between the Package B winner and the relevant highest bidder for Package D, with each entitled to make a minimum incremental bid which is 5% higher than the previous bid until one of them is decided as the winner.

If Package B Winner does not exercise its option for one or more of the Territory Groupings of Package D, then the Highest Bidder for such Territory Grouping(s) will be declared as the winner i.e. the successful Bidder of such Territory Groupings of Package D.

If no bid is received for any of the Territory Grouping(s) in Package D, then BCCI will have the sole right at its discretion to award the Media Rights of all of part of such Territory Grouping(s) in Package D to any Person on such terms and conditions as it deems fit. 

Key e-auction principles:

1. Bidding for each Package shall begin at the Reserve Price per Match.
2. Reserve Price per Match will remain the same for the entire Rights Period.
3. An Eligible Bidder can make a minimum incremental bid of such amount as shall be intimated to the Eligible Bidders prior to the commencement of the E-Auction process. The incremental bid can be reduced at pre-determined intervals during the auction.
4. The E-Auction will involve a continuous bidding process, where an Eligible Bidder can raise the highest bid at any point during the auction process.
5. A new bid must always be higher than the highest bid amount being reflected on the platform at that moment.
6. E-Auction shall continue until only one Eligible Bidder remains active, in which event such Eligible Bidder shall be the Highest Bidder for the relevant Package ("Highest Bidder”) and the highest Bid provided by such Highest Bidder shall be considered as the Highest Bid Price for the relevant Package.
7. If the Highest Bidder is not identified in a single day, E-Auction will continue in the next day.
8. Irrespective of the number of Packages an Eligible Bidder is participating in, shall be able to view all auction processes, even as an inactive Eligible Bidder.