Star India’s massive winning bid for the Indian Premier league rights shows that T20 is the format of the present and also future. For sure, cricket in India is in good health
As the dust settles on the Star network’s astonishing Rs 16,347 crore ($2.55 billion) winning bid for the Indian Premier league (IPl) rights for a period of five years between 2018 and 2022, it’s important to start putting things into perspective. When the IPl was launched in 2007, at a function in the national capital, the culture of full-fledged franchisee club sport was still very nascent in India. It was also the time when cricket in the country had still not fully come out from the 2007 One-Day International World Cup disaster. Yes, winning the World 20-20 a fortnight after the launch was a massive boost for the IPl, but would that offer a guarantee of the league being successful in IndiaIJ
Star’s massive winning bid of Rs 16,347 crore brings it to slightly over Rs 3,250 crore per year for the IPl rights. Previous broadcaster Sony was paying just over Rs 900 crore per year, if one goes by the renegotiated deal that was struck ahead of the second season, of Rs 8,200 crore for the period between 2009 and 2017.
While one can look 10 years down the line and say that Sony possibly struck a bargain, at the same time, one should also look at the fact that the IPl and club sport in India was still fairly nascent close to a decade ago. However, that is history now and while Sony as the broadcaster has a huge role in creating the brand value of IPl, which led to such a massive bid, this is Star’s moment.
IPl founder and ex-Chairman, lalit Modi had once said that his ambition is for the league to be at par with the English Premier league (EPl). It seemed wishful thinking at that time but when one stacks the numbers up, it hasn’t done too badly. To give a country that was enamoured by the Manchester United’s, Chelsea’s, liverpool’s and Arsenal’s, their own league where they can support locally-based teams, is
certainly commendable.
The five-year IPl global rights bought by Star still falls short of $6.82 billion that Sky and BT have paid together for the English Premier league rights for a period of three years between 2016 and 2018. It’s obviously way ahead in terms of valuation but there are two major differences. First, football is a sport played and watched all over the world unlike cricket. Second, the EPl as the top tier of English football had been in existence since 1888 as the first division while the EPl itself was formed in 1992. A point to be noted is that Star and Sky are both owned by the same person, Rupert Murdoch.
The question that come to one’s mind is: Where does Star, as a network go from here, having now firmly established themselves as the number one cricket broadcaster in this cricket-mad country. They have had the rights to all ICC cricket since 2007 and will continue to have them till 2023 (the figure has not been disclosed) while they have the Indian cricket rights till the end of March next year.
Given that the Indian cricket satellite rights will be up for renewal at the end of March, it will be interesting to see if Star goes on to bid for them. They had paid Rs 3,851 crore in 2012 for the rights. With Sony buying the Zee-owned Ten Network for a sum of Rs 2,600 crore last year, it has effectively left just two players in the Indian sports broadcast market.
It may be worth recalling that the IPl wasn’t Sony’s first tryst with big-time cricket in India, having held the ICC rights for a period of five years between 2002 and 2007. With 20-20 cricket only officially launched in 2003, there were just two formats at the time tests and ODI cricket. While the influx of T20 cricket has gone a long way to kill the enthusiasm people once had for ODIs, signs of the decline were visible earlier as well.
For Sony and ODI cricket, the nadir was clearly the 2007 ODI World Cup, the last event of their contract. With India and Pakistan knocked out in the round-robin stage after playing just three games, the remaining five weeks featured other countries, and with matches played well into the morning hours, it was a nightmare for both the viewers and sponsors.
The IPl deal for 10 years from 2008 to 2017 was a risk, given that club sports was still fairly nascent in India. However, they were able to grab the correct format in 20-20 cricket. Having IPl rights for 10 years was massive for the network and frankly, even if Star does not bid aggressively for India’s home season rights, it’ll be interesting to see how much would Sony want to go for them.
More than the IPl, it’s also 20-20 which is the most viewer-friendly and family-friendly version of cricket nowadays. Would a network, that has built its reputation on a hugely successful T20 club tournament, now be satisfied with their quota of five-day and 50-over international matches and the odd T20 internationalIJ
Despite this mega-winning bid from Star where they are paying Rs 55 crore for an IPl match compared to Rs 43 crore for a home match of India, the primacy of international cricket still remains intact as of now. It’s still, of course, lower than the Rs 88 crore per match that broadcasters pay for an EPl game. However, these numbers still give out a very clear indication of where the game appears to be heading financially. If the network, which is the biggest player in sports in the country, feels a club cricket tournament is more valuable than international cricket, one wonders going forward if market forces will start dictating how the game is going to be played in the future.
One major factor for the IPl retaining its popularity is that all the teams are well-balanced due to the same financial purse. This is different to international cricket where some previously competitive countries are of late falling off the radar which is leading to more one-sided matches than before.
Another factor to consider from here is how is this deal going to affect the playersIJ It’s well-known that the satellite rights deal is one of the biggest contributors to the coffers of various franchises through the central revenue pool.
Since the EPl has been discussed here, the massive deal that the EPl has with its television broadcasters is one of the factors behind some of the most inordinate spending on players we have seen over the past two-three years.
With much more money coming through to the Board of Control for Cricket in India from the Star deal, compared to its previous one with Sony, an increase in the purse of franchises will certainly be on the cards. Till last season, all eight franchises were allowed to spend a maximum of Rs 60 crore. Unlike the EPl, there is a salary cap in place in the IPl but it would not be out of the question for this amount to be considerably increased next season.
Until last year, the highest-earning player in the league was Virat Kohli who was retained ahead of the 2014 season by Royal Challengers Bangalore for Rs 15 crore. It would not at all be surprising to see players going for much higher amounts at next year’s auction. It is unclear as of now what the procedure would be, whether franchises will be allowed to retain or not, but surely the likes of Kohli can expect over Rs 20 crore or even close to Rs 25 crore if the purse does increase due to the new satellite rights deal.
One thing is for sure, cricket in India, which people thought would suffer with the retirement of the great Sachin Tendulkar in late 2013, is definitely in good health as this huge winning bid from Star indicates.
(The writer is a sports management professional)