With the much-anticipated Zee-Sony merger falling through, all eyes are now on the possible union of Disney Star and Viacom18. If the two companies indeed come together, the new entity will undoubtedly become the largest broadcaster in India, both in terms of market share and number of channels. Also, the newly formed company will have a monopoly in terms of sports content because Disney Star and Viacom18 hold media rights of the country's all major sporting events, especially cricket that accounts for the biggest chunk of sports advertising revenue. While the monopoly in sports content will be an advantage for the broadcaster, how will it impact the Board of Control for Cricket in India (BCCI) when it comes to the auction of media rights?

Industry analysts share that the consolidation may limit the BCCI’s options when it comes to selling their cricket rights. However, due to the market becoming less competitive, the industry may see some tech and OTT behemoths enter the fray strongly.

Monopoly insports coverageis not new globally, with ESPN being dominant in the US for many years (particularly in the college football market that is one of their most lucrative sports) and at the same time setting the benchmark for sports programming the world over, opines Bhairav Shanth- Co Founder ITW Consulting. Sky TV has built a similar stature in the UK ever since they played an important role in the creation of Premier League, he adds.

According to Shanth, from a purely revenue perspective, the BCCI may find that growth in the value of media rights may slow down compared to what we have seen in the past, led mainly by competition and multiple interested parties with deep pockets. “But while consolidation is a natural consequence of runaway growth in most industries, we are more likely to see innovation and new technology come in with the broadcaster having the security of a longer tenure. So, from a viewer’s (and even advertiser’s) perspective, it will have a positive impact. However, it will need the broadcaster and the BCCI to work together keeping in mind that ultimately it is the viewer who votes with their choices and preferences,” said Shanth.

Experts say the merger will bring together the experience ofStar, which has been a long-time broadcaster of Indian sports, and Jio, which has brought great innovation in technology in recent years. This bodes well for viewers and could be a positive step for the broadcast industry as a whole.

“It would be incorrect to assume that this (merger of Disney Star and Viacom18)will not allow newer players to enter the market in the medium to long run, provided OTT platforms scale up capabilities to match the offerings. Fundamentally, the economies of scope it brings in could push the industry towards more innovation,” said Shanth. He also mentioned that as far as the BCCI is concerned, while consolidation lends some stability, a lack of diversification options for their cricket rights could be a downside.

During the 2022 IPL media rights auction, Disney Star, Viacom18, and Times Internet won different packages. But it was the BCCI that emerged as the true winner, collecting a record Rs 48,390 crore over the next five-year cycle (2023-2027). As previously reported by e4m, the IPL media rights auction had broadcasters, tech, and OTT heavyweights vying for various packages.

According to Nitin Menon, Co-founder and Managing Partner of NV Capital, Reliance and Disney coming together would surely be a bellwether for the media & entertainment industry, especially sports broadcasting.

Menon says it is too premature to say whether there would be a monopoly because there have been instances of the lines between tech, social media and media blurring. There could be possibilities where tech or social media platforms or even OTT platforms would compete for sports rights.

“Let us not ignore that ultimately it boils down to eyeballs and enhancing your subscriber base. As long as the content, whether it is long form or short form or even sports for that matter, delivers eyeballs, platforms or media companies will try to procure it. In India, cricket is the most coveted property and every company worth its salt will try to muscle their way in for some piece of the cricket pie irrespective of the price,” said Menon.

Sharing similar thoughts, Karan Taurani, Senior VP, Elara Capital, said that there might be chances that OTT giants enter the market for sports content. For instance, Netflix recently signed a deal for $5 billion to stream WWE Raw for over 10 years in US, Canada, UK, and Latin America. In India, Sony owns the media rights for WWE Raw.

“Given the low competitive intensity, cricket and sports rights could be an interest for large OTT giants as well but for now the number of players would reduce if the Disney Star and Viacom18 deal goes through,” said Taurani.