StreamTV Insider
The Indian Premier
League (IPL) is only played for two months a year (generally April through May)
but ranks among the most valuable sport leagues in the world rivalling the NFL
and soccer’s English Premier League in terms of rights per match.
article here
So valuable is the
franchise that it is tempting to view the proposed merger, valued at $8.5
billion, of Disney’s Star India with Reliance Industries media wing Viacom18
solely in that light.
Viacom18 had locked
in streaming rights for the IPL until 2027 paying $3.05 billion and Disney
through Star India owns the tournament’s TV contract worth $3.02 billion.
This values each of
the 74 matches per season at about $7.36 million per game broadcast on TV and
$6.4 million per match for streaming.
Moreover, Disney
brings with it streaming rights for International Cricket Council matches
events in the domestic market.
It is hard to
overstate the value of cricket in India (and in neighboring Pakistan,
Bangladesh and Sri Lanka) where the sport is often described as akin to
religion.
Media agency GroupM
estimates sports industry spending in India totaled $1.7 billion in 2022, up
49% from the previous year. Cricket accounted for 85% of the spending on
sponsorship, endorsement and media.
It’s why Ken Leon,
research director at CFRA Research, told CNBC, "Cricket is everything
in India ... I think [Disney CEO] Bob Iger made the right decisions here.”
But the move is
already being scrutinized for its potential to swamp competition. Although the
entity will also have digital and broadcast rights to other key sports like the
EPL, Wimbledon and FIFA World Cup 2026 in USA, Canada and Mexico it is the cricket
rights which have lawyers exercised.
K.K Sharma, a
senior partner at Indian law firm Singhania & Co, told Reuters that
the merger would leave “hardly anything of cricket left. The regulator
[Competition Commission of India] gets concerned even when there is a
possibility of dominance. Here, it is not merely dominance but almost an
absolute control over cricket.”
A multi-year
stranglehold on the most popular sports property will be of concern to
advertisers worried that the lack of competition will push prices up.
"The
regulator's concern as far as cricket is concerned will be on the advantage the
Disney-Reliance entity will have on raising prices for advertisers," noted
Karan Chandhiok, head of competition law at India's Chandhiok & Mahajan to
Reuters.
India is the most
populated country on the planet by some accounts, with 1.4 billion people.
The merger is expected to immediately tap more than 750 million of them.
The Indian
streaming market is growing rapidly and is why streamers such as Netflix and
Disney have targeted it. At issue is that revenue per subscriber there is
substantially less than in the U.S. or Western Europe, reflective of lower
average incomes. A basic Netflix plan in India for instance costs about $1.80
per month.
Having expanded
into the market by acquiring streamer Hotstar (via Twentieth Century Fox) in
2019 Disney launched a mobile service over which it offered exclusive live
viewing of the IPL for around $4 a month.
It then lost IPL
streaming rights to Reliance’s Viacom18 in 2022. Reliance undercut Disney
by offering the tournament for free on its own streaming platform, Jio Cinema,
and Disney+ Hotstar shed 4.6 million customers in the first three months of
2023 as a result, followed by 12.5 million in the quarter ending July 1.
“The fact that
digital rights value was higher than television showcases the scale and future
potential of streaming in India,” Mihir Shah, VP of Media Partners Asia, told
the BBC when the IPL rights deal was struck in 2022.
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