Cricket viewing has been setting new records with every tournament, and broadcasters are going all in to tap this euphoria. The value of media rights and the money at stake are testimony to the extent that the broadcasters are ready to go to be associated with the sport (read IPL, BCCI and ICC).

Over Rs 80,000 crore is at stake for tournaments scheduled over the next five years. The latest auction of BCCI media rights just proved that the sky is not the limit for broadcasters, with Viacom18 bagging the cricket body's TV and digital media rights for bilateral India matches for Rs 5963 crore for the broadcast of 88 matches.

It all started in June 2022 when IPL Men’s media rights went to Viacom18 (digital) and Disney Star (TV) for a total of Rs 48,390 crore. Following this in August 2022, Disney Star bagged the TV and digital rights for all ICC events in India for Rs 24,800 crore ($3 billion). The rights are for both men’s and women’s cricket events globally through the end of 2027. Soon after, Viacom18 bagged the women’s IPL media rights for Rs 951 crore.

The question now is – will broadcasters get their money’s worth?

We posed this query to experts, and the general opinion was that the investment is likely to bring good returns over the next five years. However, to ensure that broadcasters need to keep up the viewing experience - on TV and digital - and find more monetisation avenues, they said.

Now, what drives broadcasters to go all in?

Brands Love Cricket

Whether it's on TV or digital, brands love big cricket properties – IPL, World Cup or bilaterals. This year, the 16th edition of IPL saw over 34 sponsors, TV and digital put together. Over 1,000 brands lined up to advertise on both platforms.

“Brands will always get attracted to investing in big cricket properties since in India this sport beats all other sporting events. It is the most promising property for brands as it gets the best returns. IPL and World Cup are the most sought-after events,” an industry expert noted.

According to Bhairav Shanth, Co-Founder, ITW Consulting, broadcasters spending what seems like an exorbitant amount on media rights may seem like a losing bargain if one looks at just the headline numbers, but it is an astute choice in the long run.

“When we look at the high media rates the realization for the channel is not immediate but spread across the duration of the contract and broadcasters are well aware of this. We have seen it happen – be it with IPL, the ongoing Asia Cup or the World Cup – there seems to be an insatiable thirst for cricket content, not just in India but across the globe, and brands are eager to cash in on this,” Shanth added.

Ensuring Returns

In order to recover the upfront cost, broadcasters will have to ensure that they lower production costs while not compromising on quality. Giving the viewers quality content and enhancing the experience can go a long way in getting more eyes and subscribers, the experts said.

A senior industry expert, who did not wish to be named, said, “Broadcasters should enhance viewers’ experience by giving them options to choose, like the language or highlights. There is a need to create value-added services on OTT. There can be services on digital like the Red Button Activation where viewers can select the feed they want to watch.”

For instance, during IPL this year, Disney Star broadcasted IPL matches on its TV channels in several regional languages. On digital, the network launched interactive features on TV sets allowing viewers to watch match highlights at any time. There was an option of ‘fix camera’ on favourite cricketers along with real-time subtitles of commentary.

Similarly, Jio Cinema offered IPL in several languages and made it interactive for viewers to watch it anytime and anywhere.

Nitin Menon, Co-Founder of NV Capital said, "Cricket is the biggest sporting property in India and from the last decade or so, it has always been an extremely expensive property. The aggression displayed for IPL showcases that trend. Recoverability is not the immediate concern here, it is adding subscribers. The fact that Asia Cup is streaming for free gives us an inclination that Disney is also upping their game to retain and increase their subscriber base at least on the digital front. Whether ZEE-Sony would also look at this space with their renewed vigour, time will tell."

Exploring more avenues

While advertising is a key source of revenue, distribution revenues come in second. Experts advise broadcasters to look at all options. "There has to be distribution in the form of syndication and distribution to sub-licensees."

Last year Disney Star entered a strategic licensing agreement with Zee Entertainment Enterprises Limited (ZEEL) for exclusive TV rights of ICC men’s events from 2024-27. The Disney-Zee deal changed the old patterns of buying sports media rights and ensuring they remained exclusive with one, which helped the rights owner to command high advertising rates.

Both TV & digital rights profitable

Another expert said that having both TV and digital rights allows a broadcaster to have access to much larger brand deals. “Apart from controlling prices to an extent, having both the rights also gives them more clarity on marketing each property,” he said.

Shanth cited AdEx reports to show that brands currently spend around Rs 90,000 crore, of which Rs 34,000 crore is from digital alone. This has grown over 35 per cent over the last year and stands on par with linear. This is projected to grow by another 35 per cent, overtaking brands’ spend on traditional media.

“This bet is not just on cricket being on linear TV broadcast but digital as well. Keeping an eye on the future, it is definitely looking skewed toward digital programming and that is where the broadcasters are likely to recover their investment through brands spending on digital mediums,” he added.

As per Menon, retaining and increasing the subscriber base on the digital front is the order of the day. All broadcasters are trying to pursue this since linear TV globally is facing headwinds due to cord-cutting, dip in advertising revenues along with technological changes or advancement.

These factors explain some of the moves in media rights. For BCCI bilateral matches, the base price set by the cricketing board per game for TV was Rs 20 crore while for digital it was Rs 25 crore. However, Viacom18 will be paying Rs 68 crore per match, for TV and digital together.

According to industry reports, Disney Star bagged TV media rights for IPL at a 30% premium over the base price for the matches, whereas Viacom18 bought the media rights for a premium of 70% over the base price. The IPL media rights for the 2023-2027 cycle were sold for a whopping Rs 57.5 crore (per match) for TV and for Rs 50 crore (per match) for digital.