India Media Landscape Redrawn as Viacom18, Disney Carve up $6.2 Billion IPL Cricket Rights

IPL Trophy

Viacom18, a TV and streaming group backed by billionaire industrialist Mukesh Ambani, has paid $3 billion to win an online auction for two packages of digital rights to Indian Premier League (IPL) cricket. It now has the leverage to change the Indian broadcasting landscape and to the tip the balance even further in favor of streaming.

Variety understands that Viacom18 has agreed to pay $2.63 billion for a five year package of regional digital rights. It also successfully bid an additional $417 million for what was billed as a non-exclusive package covering 98 matches over five years including tournament openers, playoffs, finals and selected evening games.

Walt Disney, which has held the TV and digital rights to IPL for the past five seasons, won only the broadcast TV rights, but agreed to pay $3.01 billion for them.

Rights for the rest of the world were sold for $135 million with Times Internet the reported winner of rights in the U.S., Middle East and North Africa. Viacom18 also won rights for the U.K., Australia and South Africa.

In all, the four rights packages sold for a combined total of $6.2 billion.

The consortium led by Viacom18, a joint venture between Paramount Global and Ambani’s Reliance Industries, also includes Bodhi Tree Systems, a platform of James Murdoch’s Lupa Systems and former Disney president Uday Shankar. The bid buys it Indian digital rights to 410 matches played over five years across the the 2023-2027 tournaments.

Viacom18’s success means that Walt Disney’s hegemony in India now faces a serious challenge.

Disney inherited the Indian TV, digital and international rights as part of its 2019 purchase of 21st Century Fox. That acquisition also brought Disney the Star TV group and the nascent Hotstar streaming operation.

Now revamped and rebranded as Disney+ Hotstar, the platform has leveraged live sports to become India’s largest streamer in a highly competitive field that includes multinational conglomerates, local studios and cross-border joint ventures. Losing the digital rights means that Hotstar is without its crown jewel and could lose its top dog status.

Jay Shah, honorary secretary of the Board of Control for Cricket in India (BCCI) tweeted: “The BCCI will utilize the revenue generated from IPL to strengthen our domestic cricket structure starting from grassroots, to boost infrastructure and spruce up facilities across India and enrich the overall cricket-watching experience.”

Disney’s new position — paying a higher price for only half the rights — is such an uncomfortable one that some analysts have been left wondering why Disney bid for the TV rights package at all. Disney feels that the rights its has secured will still act as a locomotive for other content.

“We made disciplined bids with a focus on long-term value. We chose not to proceed with the digital rights given the price required to secure that package. IPL is an important component of our portfolio of television channels in India, providing an incredible opportunity for us to showcase The Walt Disney Company’s powerful global brands and iconic storytelling, as well as Disney Star’s impressive collection of local original content, to millions of viewers in India,” said Rebecca Campbell, chairman, international content and operations, The Walt Disney Company, in a statement.

Even before adding in production costs, calculating Disney’s $3 billion winning bid as $600 million per season compares unfavorably with its earnings potential from the IPL.

Consultancy, Media Partners Asia has previously reported that Disney earned $775 million from IPL this year. That broke down as $510 million from TV, $250 million from digital and the balance from international licensing.

The new landscape appears to create at least three further problems.

Disney will no longer be able to charge premium rates for advertising around the cricket as there will be two ad sales teams peddling essentially the same inventory.

Another problem is that Viacom18 will be able to use IPL cricket to shift users between its linear TV channels and onto Reliance Jio’s digital platforms. Given that India is a mobile led market, poised to reach 1 billion smartphone users by 2026, per the latest Deloitte report, this plays directly to Reliance Industries’ strength. Ambani’s Jio is India’s top mobile services provider with 407 million subscribers out of India’s 2022 total of 1.14 billion mobile users. (Of these, some 750 million are smartphone users.)

A third benefit accruing to Viacom18 will be data insights into users.

During the last Disney earnings call it was revealed that Hotstar had over 50 million paying subscribers, or some 35% of Disney+’s worldwide subscriber total. The monetary impact of a subscriber decline would be less painful than in some other countries as, in common with all streamers in India, average revenue per user tends to be extremely low. Disney+ Hotstar’s monthly ARPU in India is reported as $0.76.

Nevertheless, any dent in Disney+ Hotstar’s sports content offering will also affect the platform’s number of casual and ad-supported viewers. On average Disney+ Hotstar enjoyed 60 million monthly average users. But this typically rises during the IPL tournament and was well over 100 million in the second quarter.

Other defeated bidders included Amazon and Sony.

“We made a reasonable bid, considering all the expected returns. We had to factor in the market’s anticipated expansion and potential economic and other concerns over the next five years. Fiscal prudence, in my opinion, is critical for strategic management,” said NP Singh, MD & CEO, Sony Pictures Networks India.

The rights auction played out in entertaining fashion, starting on Sunday and running through Tuesday local time. It offered four different packages, with the winners of the TV category allowed to outbid or haggle with the winner of the main digital rights package. The winner of the main rights package also had the option to rebid for the non-exclusive digital package.

The many available permutations are all set to make the IPL and its team owners tremendously rich.

Some analysts have calculated that with the total value of the Indian rights packages being $6.2 billion, the mean value of each IPL match is $15 million. That is second only to the implied per game value of the U.S.’s National Football League ($35 million per game) and ahead of English Premier League soccer ($11 million per fixture).

VIP+ Analysis: How the IPL Rights Sale Impacts Paramount, Disney