Earlier this week, a significant development in the Indian sports and entertainment broadcasting industry could have far-reaching implications for the global cricket landscape. The Board of Control for Cricket in India (BCCI), long the dominant force in the cricket world, has consistently leveraged the country’s deep passion for the sport to set the market value for broadcast rights. As the world’s wealthiest cricket board, the BCCI has dictated terms for broadcasters eager to showcase top-tier cricket talent.
However, a major shift may be on the horizon. On November 14, 2024, Disney’s Star India merged with Reliance’s Viacom18 in an $8.5 billion deal, creating a broadcasting powerhouse that is poised to alter the balance of power in Indian sports and entertainment.
The sale of broadcast rights for events like the Indian Premier League (IPL) and international matches has been a key revenue stream for the BCCI. The International Cricket Council (ICC) also heavily relies on media rights revenue, particularly from the Indian subcontinent. The IPL’s 2022 media rights auction saw a massive 196% increase in value, rising from ₹16,347.5 crore for 2018-2022 to ₹48,390.5 crore for 2023-2027, driven by fierce competition between Viacom18 and Star India.
In an interview with India Today, Uday Shankar, Vice Chairperson of the merged entity, discussed the potential impact of the merger on cricket media rights. While acknowledging the ongoing importance of cricket as a major market driver, Shankar noted concerns over the sustainability of bidding wars in the future. The merged company now holds a broader portfolio, giving it more flexibility to approach media rights strategically, without feeling pressured to outbid competitors.
“We no longer suffer from FOMO. If we don’t bid for the next cycle of ICC rights, we can comfortably sit it out, and it won’t make a dent in our business,” Shankar said.
With over 50 million subscribers across Hotstar and JioCinema, the combined entity could opt to step back from the auction process, allowing other broadcasters like Sony and Zee to vie for cricket rights. Furthermore, new players like Amazon Prime and Netflix have entered the sports broadcasting market in recent years, with Amazon securing cricket rights in New Zealand and Facebook and Netflix testing the waters with various sports.
If major broadcasters choose to sit out, it could slow the growth of cricket broadcast revenues, potentially stalling further market expansion. Shankar, however, remains optimistic, explaining that the diverse portfolio of the merged company will offer more flexibility in making bids that align with long-term business goals.
While the IPL is a marquee event, Shankar acknowledges the financial pressures broadcasters face when securing high-value cricket rights. Disney Star’s acquisition of ICC TV and digital rights for 2024-2027 at a cost of $3 billion has added significant financial strain on broadcasters.
“There are onerous financial liabilities on account of the cricket rights,” Shankar said, recognizing the need to innovate in advertising and monetization to manage costs. “The good news is that cricket rights are awarded for a short period, so you can grit your teeth and get through it,” he added.
Shankar is cautiously hopeful that the soaring prices of cricket rights will eventually stabilize. Despite the escalating competition, he believes that cricket remains a highly valuable asset if acquired at a reasonable price.
“If cricket is available at a reasonable price and sensible terms, it’s a great business. If not, we will revisit our strategy,” Shankar stated.
He also emphasized that competition is not just limited to traditional broadcasters anymore. With new entrants from outside the media industry, including tech companies and digital platforms, the landscape is changing, offering more opportunities for growth.
Despite the challenges posed by rising costs and market consolidation, Shankar remains confident in the long-term prospects of cricket broadcasting, particularly in the digital space.
“The viewers have more choices now, and they’ll go where the content excites them,” he said.
As the merged entity navigates its cricket commitments, it will be closely watched by the BCCI and the ICC, with the upcoming media rights cycles expected to bring significant changes to the cricket broadcasting landscape.
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Name of Author: Cricexec Staff
