Star India on Monday completed its virtual monopoly of cricket broadcast by winning the coveted Indian Premier league (IPl) media rights for a whopping 16,347.50 crore (US$ 2.55 billion) for the next five years.
The staggering deal, which will run from 2018 to 2022, has turned out to be a financial windfall for the BCCI despite the administrative crisis it is facing at the moment.
The testimony to IPl's growth as the premier sporting property of the country is reflected by the fact that the previous 10-year bid for TV rights only was bought by Sony at Rs 8200 crore in 2008.
Now, the BCCI stands to earn nearly double that amount in half the duration (five years) with earnings of Rs 3270 crore from IPl media rights per year.
The BCCI will now earn Rs 55 crore approximately from an IPl match compared to Rs 43 crore, ironically, for each international match that India play.
"India, cricket and IPl have changed dramatically since its inception (in 2008) and this bid is a reflection of that," Star CEO Uday Shankar told mediapersons.
The media rights include broadcast (TV) and digital (mobile and internet) for various segments namely India, Middle East, Africa, Europe and America.
Interestingly, rival Sony's individual bid for broadcast (TV rights) this time was Rs 11,050 crore compared to Star's Rs 6,196 crore.
However, as per rule, the companies could form a consortium and if its consolidated global bid happened to be greater than the sum total parts of every individual bid they stand to win the rights.
Accordingly, the sum total of other bids, excluding Star consortium, was Rs 15,819.51 crore which is at least Rs 500 crore less than Star India's consolidated bid.
It is expected that Star India's digital vertical HotStar would be used for live streaming of IPl matches in India.
Shankar admitted that they might not have won the bid had the amount been slightly lesser.
"Even if it was slightly less, we would not have got the rights. In every category, it was so competitive," Shankar added.
BCCI CEO Rahul Johri, on his part, said, "our main endeavour to the stakeholders was to provide a transparent process where there should not be any iota of doubt."
In the morning, 14 out of the 24 companies that had bought the ITT (Invitation to Tender) document bid for various rights, turned up for the auction. Out of the 14 companies, BamTech was disqualified as they did not meet the requisite criteria.
Sony and Star were the two companies which stood the test of scrutiny for India broadcast rights.
Some of the other companies that were in contention for India digital rights were Times Internet limited, Jio, Airtel and Facebook.
‘IDEA WAS TO GET EVERYTHING’
Star India CEO Uday Shankar on Monday said that the Indian Premier league's media rights auction was a case of "getting everything or losing everything" for the company, which paid a eye-popping Rs 16,347.50 crore in a landmark deal.
"We were either prepared to get everything or lose everything. It feels good because at Star, when you try for something you want to succeed," Star India top boss Shankar said in an exclusive interview.
Asked if it was a technical battle where Star outbid Sony despite being nearly Rs 4850 crore short in India (TV) broadcast bid, Shankar tried to put things in perspective.
For India broadcast bid, Sony's singular bid was Rs 11,050 to Star's Rs 6196 crore.
"Well, it might sound technical but I think BCCI created a brilliant strategy to maximise its value. Because what they did was, they realised by unbundling the rights (segregating verticals and areas), they could get interests of people to focus disproportionately on the most relevant piece of right that they wanted," Shankar explained.
Sony, without so much of a digital presence, put its whole budget (Rs 11,050 crore) while Star bid in every segment even at times when it was functional, which showed that it was ready to diversify in terms of verticals (broadcast and digital) as well as areas. Similarly, Facebook came up with a monstrous Rs 3900 crore India digital bid only.
"Our strategy was very simple. We felt we are the only bidders, who have a presence in TV broadcasting and also robust presence on digital platform (via HotStar). We have a good distribution of Star Channels internationally and we want to role out HotStar globally. We thought IPl could be a device for that," Shankar explained the rationale behind the global bid.
"So we felt that instead of putting money on one or two segments disproportionately, individually, if we got only one right, the value that we put would have been a reflection of our reluctance to own one piece.
"So we were prepared to either get everything or lose everything whereas others focussed on specific areas of interest. We wanted to get India as well as global rights so that we can unlock a better value for our business. Even if we have been marginally off in any of the segments we would have lost it," he said.
Shankar admitted that some of the bids like Rs 65 crore for Middle East (where BeIn Sports bid 330 crore) or Rs 17.88 crore (where FollowOn bid Rs 70.01 crore) for Australia and New Zealand were functional.
"Yes, (on functional bids) but on the other hand, from BCCI's point of view, it was the case of price discovery and yet they have managed to get more from consolidated bids than they could have got from the some of parts (Rs 15,819.51 crore). That is a very interesting aspect."