IPL 2023: The big battle off the field between Viacom18 and Disney-Star

IPL teams' average revenue may double to Rs 630 cr; Mumbai Indians could rake in as much as Rs 802 crore this year

As the 10 Indian Premier League (IPL) franchisees slug it out in the cricketing extravaganza that begins today, some big winners have already emerged off the field. The team franchisees are laughing all the way to the bank, since their revenues from the central pool of the  Board of Control for Cricket in India (BCCI) are expected to at least double — from Rs 305 crore to Rs 630 crore this year.

The pool includes a share of the sale of the lucrative television and digital rights for the IPL as well as the money from the main sponsors. The central pool contributes to as much as 75-80 per cent of the franchisees’ overall revenues.

BCCI, which manages the IPL, will also become richer than it ever was. Its share of revenues from selling TV and digital rights will surge threefold — from Rs 8,174 crore for IPLs 2018-22 to Rs 24,195 crore for the next five years of the league, beginning today. 

The IPL’s viewership is expected to swell too. It is estimated that as much as half the Indian population-- over 550 million--will be glued to the matches at least for some time, either on television or a digital platform. This is important, as IPL’s TV viewership fell from 269 million in 2021 to 229 million in 2022. Disney Star, which had both the TV and digital rights, restricted viewership on digital by keeping it mainly for subscriptions.

The belief that there will be a larger viewership this time stems from the fact that Viacom18, which has won the digital rights to IPL, is offering the matches free on Jio Cinema. And to ensure that viewers don’t pay too much for data, Reliance Jio is also offering low-priced data packages. Even Disney Star is offering some matches free to pull in more viewers. 

For the first time the TV and digital rights have been split between two broadcasters: Viacom 18, which has won the digital rights, and Disney Star, which retains the TV rights. The two are fighting to grab a bigger slice of the near stagnant overall IPL advertising pie of about Rs 4,500 crore.

Disney Star and Viacom-18 have collectively paid nearly three times more than the last auction held five years ago — a staggering Rs 48,390 crore. This means that to break even, they need to rustle up revenues of nearly Rs 10,000 crore every year from advertising and other sources. Going by current numbers, it looks unlikely that anyone will make money for a few years. Some experts even say that they won’t.

However, the 10 franchisees, including the two in Gujarat and Uttar Pradesh, will make their fortune without much effort. According to estimates by Elara Capital, the average revenue of each franchisee will go up from Rs 305 crore in the last IPL to Rs 630 crore this year.

The bulk of the money will come on account of the threefold spike in revenues from TV and digital rights, half of which is shared between the 10 franchisees equally. The teams also make money from the sponsors they bring to the table (could account for 20-25 per cent), gate money (5 per cent), and the sale of merchandise. Estimates suggest that some franchisees have got sponsors on board who will cough up anything between Rs 60 crore and Rs 100 crore.

Elara has projected a huge jump in overall revenues this year. For example, the revenues of Mumbai Indians is expected to go up by 109 per cent, hitting a cool Rs 802 crore, and that of Chennai Super Kings could rise by 124 per cent. 

However, while franchisees have a field day, the battle between Viacom 18 and Disney Star is about to get fiercer. In the last IPL, when both the rights were with the latter, the skew in favour of advertising on TV was as high as 70-80 per cent, with the rest going to digital.

But Viacom 18 has upset the applecart this time by offering IPL matches free on its platform, Jio Cinema. Media planners have projected that it will be able to grab 60 per cent of the IPL ad pie, while insiders in Viacom18 say they are aiming to get as much as 70 per cent.

Viacom 18 has the advantage of there being no restrictions on digital inventory. Also, it can customise ads at  regional and local level, which TV cannot. In fact, the company has got more than 750 advertisers, including small and medium businesses, who will be advertising in the IPL for the first time.

But Disney Star is fighting back. Insiders say the company expects to get ad revenues worth Rs 2,200-Rs 2,400 crore and that it has already roped in over 71 advertisers and sponsors.