No Bezos-Ambani face-off as Big Tech quits race for IPL broadcast rights

Amazon, Alphabet, Apple pull out of media rights auction; Disney-Star combine and RIL-led Viacom 18 emerge frontrunners

Global tech majors Amazon, Alphabet and Apple Inc on Friday dropped out of the race to bid for Indian Premier League (IPL) media rights, leaving the space to traditional broadcasters. With this, the auction starting Sunday is expected to see Disney-Star combine and Reliance Industries-led Viacom 18 at the centrestage of a keenly-watched sporting rights battle.

However, Sony and Zee, which are set to be merged by September, could be the dark horse, sources said. They were among the seven participants at the technical evaluation of the bids by the Board of Control for Cricket in India (BCCI) on Friday.  

Analysts and bidders are divided on whether the withdrawal of the tech majors would dim the prospects of BCCI garnering around Rs 40,000-50,000 crore for five-year media rights. However, the pull-out by Amazon indeed rules out a Jeff Bezos-Mukesh Ambani faceoff in the IPL arena.      

        

The composite base price for broadcasting, digital and global rights of IPL for 74 games per season for 2023-2027 has been set at Rs 32,000 crore, which is double the total bid amount when Disney-Star had bought rights for both TV and digital last time at Rs 16,347 crore.          

Sources said Zee may bid for both digital as well as broadcasting rights. Zee-Sony as a merged entity could overtake Disney + Star as the top broadcaster in the country if they win the IPL rights, analysts said.

Amazon, Alphabet and Apple Inc did not comment on why they decided not to participate in the bid.  

Other companies which came for the technical evaluation, apart from Disney+Star, Viacom 18, Zee and Sony, include Times Internet and Africa-based SuperSports and radio broadcasting company Fun Asia.

Both SuperSports and Fun Asia will look for international rights, according to officials.  Besides the tech companies, others like Dreamz 11 and Sky Sports did not show up for technical evaluation though they had bought the bid papers.

Companies, which clear the technical evaluation, will bid on Sunday for the various rights on offer. In the previous IPL edition, Facebook had bid for digital rights but had lost.

Sandeep Goyal, managing director of ad agency Rediffusion, believes Disney+ Star and RIL’s Viacom are the only two serious competitors in the fray. ‘’Rest of them either don’t have the monetization vehicles or don’t have the balance sheets for the size of the punt,” he said.  

Amazon, like other high tech players, has been hamstrung by the rules of bidding. For instance, the rules do not allow anyone to bid in a consortium (it cannot bid for TV rights as it does not have a broadcasting channel and it can’t tie up with one). The company, therefore, could have bid either for the digital rights for all the matches with a base price of Rs 33 crore per match or only half of that for digital rights for 18 key matches on a non-exclusive basis.

Bidding match

• Disney+Star, Viacom 18, Zee, Sony, Times Internet, Africa-based SuperSports, and radio broadcasting company Fun Asia came for technical evaluation
• Those who will clear the evaluation will bid on Sunday for various rights on offer — TV rights, digital rights, rest-of-the-world rights, etc.
• Experts expect BCCI to garner Rs 40,000-50,000 crore for the five-year rights
• The base price for the rights, at Rs 32,890 crore, is double of what Disney Star paid in 2018  

However, BCCI bidding conditions provide a distinct advantage to legacy broadcasters (with TV channels and digital platforms). The highest bidder for TV rights this time has the choice of rebidding for the digital rights of all matches, if it is not already the highest bidder in that segment. Similarly, the highest bidder in digital segment can also rebid for TV rights where it is not number one, provided it also is a TV broadcaster.

A top executive at one of the prospective bidding firms said: "BCCI might have to reduce its expectations from the auction. It had expected that digital rights will go up sharply with the entry of top tech companies in the fray, After all Amazon has paid huge amounts in the US for a package of National Football League  games. Also it expected Dreamz 11 to bid for digital. Now only Time Internet might."  But another executive of a company with big stakes in sports broadcasting said: “No one has really looked at Amazon as a real contender, so don’t see it getting anyone excited or subdued.” The executive pointed out that the new structure ensures that bidding prices go up and BCCI and the 10 franchisees make more money with only one player getting all the rights – TV and digital.

Even digital rights for the 18 non-exclusive matches could go to one of the broadcasters who could not get digital rights for all the matches, a source said.  

With a global war chest of $30 billion for content, out of which a third will be for sports, Disney is not short of cash to retain the IPL. Elara Capital estimates that one third of Star’s revenue (digital and TV) comes from IPL, and the company says it controls 15-20 per cent share of sports advertising on TV. But it has been underplaying its interest in the property saying it would not indulge in a price war.  

For RIL-led Viacom 18, which has a viewership market share of around 12.8 per cent which is less than half of market leader Star-Disney at 29.1 per cent and the Zee-Sony combine at 26.9 per cent, cricket could give it a big leg-up to catch on with the two big broadcasters. Reliance had bid last time but had lost to Star-Disney.