IPL valuation down nearly 11% amidst media rights uncertainty
As per a report by D&P Advisory, reasons for the decrease in IPL’s value include the failed Zee-Sony merger, media consolidation and tech giants’ delayed entry into the bidding arena
The Indian Premier League (IPL) ecosystem has witnessed its first-ever decline in valuation, according to a report by D&P Advisory. The report reveals a 10.6% decrease in value from Rs 92,500 crore to Rs 82,700 crore, translating to a drop from $11.2 billion to $9.9 billion USD (approximately 11.7%).
Despite the league's continued popularity across television and digital platforms, the decline is primarily attributed to a reassessment of media rights values.
Shifting market dynamics impact valuation
D&P Advisory acknowledges that the previous valuation factored in anticipated growth from the next media rights renewal. However, a significant change occurred in 2022 when the Board of Control for Cricket in India (BCCI) acquired both TV and digital rights for the 2023-2027 cycle.
While this move propelled the IPL to become the second-richest league per match, it also impacted competition. The fierce fight between Jio and Disney for digital rights, previously seen as a positive factor, is now facing uncertainty.
Reduced competition dampens future prospects
The report highlights several factors impacting the next media rights auction, which includes the failed Zee-Sony merger, media consolidation and tech giants’ delayed entry into the bidding arena.
“The failed merger between Zee and Sony, which was expected to go through as of the last valuation has impacted market dynamics. The combine entity would have had a stronger position in bidding for IPL broadcasting rights in the future and would have given a strong competition to Disney and Jio to acquire the rights, making it a three-horse race as against the current two-horse race,” the report said.
“However, with the merger off the table, each of these two players would struggle to be serious contender for the media rights, particularly the digital segment. Compounding this issue is the consolidation of broadcasting power. The merger of reliance owned Network 18 and Disney owned Star India has essentially created monopolistic control over television and digital broadcasting,” it added.
According to D&P Advisory , this narrowing competitive field missed the aggressive bidding that has historically given up media rights. Further, the expected delay in the entry of major technology such as Apple, Amazon, Meta into the IPL media rights arena exacerbates the situation.
A more conservative future for media rights?
D&P Advisory suggests that the lack of vigorous competition could lead to a more conservative approach in future IPL media rights auctions. The era of escalating prices driven by fierce competition may be over, casting a shadow on the trajectory of future IPL media rights valuation.
This report raises questions about the future of the IPL ecosystem. While the league's popularity remains strong, the changing media landscape and consolidation of power pose challenges for future growth. Only time will tell if the IPL can maintain its position as a global sporting powerhouse in the face of these evolving market dynamics.
