BCCI TV & digital bilateral rights: Lower premium expected this time, says Karan Taurani
Also, the cricket board has reportedly reduced the base price of title sponsorship rights for international cricket matches played in the country to Rs 2.4 crore per match
With the Board of Control for Cricket in India (BCCI) reducing the TV and digital base price for bilateral series by 25% compared to the previous cycle, a lower premium is expected due to fewer platforms bidding, curtailed ad spend of new age & commerce firms, and IPL revenue decline of 20-25% YoY in 2023, a latest report from Elara Capital said.
The Board has kept TV and digital rights of the bilateral series in two packages at Rs 200 million and Rs 250 million per match, respectively, for 88 matches within the cycle (25 Tests, 27 ODI and 36 T20I). The combined base price stands at Rs 39.6 billion.
“The BCCI expects at least Rs 600 million per game at auction, which translates into a base price of Rs 52.8 billion via the e-auction process. It may cancel the process if the numbers are not breached,” said Karan Taurani in the report ‘BCCI on the Defensive’, released by Elara Capital.
According to the report, which e4m has exclusive access to, during the cycle of 2018-2023, the BCCI had earned Rs 61.3 billion from Star India for 103 matches, with a price per international game at Rs 600 million (TV and digital combined).
The base price for this cycle’s media rights is 25% lower per match than CY18-23.
The report says that BCCI could garner 1.6-1.9 times of base price (32% higher than earlier cycle rights on a like-to-like basis, as the number of matches has come off by 15% vs the earlier cycle), as the current base at Rs 450 million per match is already 25% lower than the last cycle’s price of Rs 600 million.
Talking about IPL auctions, the report said, during CY23-27 it had a base price that was 47% per match higher than the earlier cycle. IPL number of matches went up by 37 % In the current cycle.
It said sharp growth in IPL media rights price (like-to-like), was due to higher inflation in cricket pricing than other genres (0.8x growth over a five-year period at a CAGR of 12-13%); firms taking part in the bidding process on the digital side, including global OTT giants; and scarcity premium as cricket is an important strategy for any platform to increase scale on digital.
“However, the BCCI is keeping the base price lower at 25% than the price of the past cycle, which indicates likely low demand and wanting to attract interest from platforms.
“Premium in these media rights could be lower than the earlier cycle, due to fewer platforms bidding, curtailed ad spend of new age & commerce firms, and IPL revenue decline of 20-25% YoY in CY23 (TV and digital),” the report said.
The report said that a final bid could be Rs 65-75 billion at a premium of 77% over base price and at a premium of 32% over the past cycle’s price, which in turn, translates into a per match price of Rs 0.8 billion.
IPL had garnered a premium of 47% over high base price (2.2x higher than earlier cycle), the report said, adding that in this case, premium is likely to be lower as final auction value depends on the countries that will come to tour India, and lower pricing for ODI & test matches (50-80% lower than T20), as T20 attracts the most premium pricing due to higher concurrent viewership.
“We expect premium to be higher than the base price for digital for these media rights too (just like IPL), as TV rights premium may be in the range of 30-40% over base price whereas digital rights premium could be in the range of 80-90%, which translates into a per match price of INR 0.8bn (TV and digital).
“We believe this pricing is justified as it will give platforms an opportunity to breakeven or turn profitable. India’s ad environment may turn conducive in CY24, led by profitable new age & commerce firms, inflationary pressures cooling off, and emergence of Meta, Web 3.0 & 5G,” it said.
Meanwhile, in a similar development, the BCCI has reportedly reduced the base price of title sponsorship rights for international cricket matches played in the country to Rs 2.4 crore per match. In the last cycle, MasterCard and Paytm had paid Rs 3.8 crore per match.
The title sponsorship period will start in September 2023 and end in August 2026. The total price of the three-year sponsorship will be Rs 134.4 crore.
