The suspense is finally over; Rs 16,347.50 crore ($2.55 billion) is the magic figure that has won Star India the IPL rights for the next five years.
But, can this humongous amount of money be recovered or is it a rather ambitious bid? What does this mean for Star’s other properties like the rights for international cricket in India, English Premier League (EPL), Pro Kabaddi and all else that supplies content for its bouquet of 12 sports channels? And what does this mean for other market leaders like Sony who were used to having the market share of viewership in April-May for the last decade? And, what does this mean for the franchises and the players?With 40 per cent of the income decidedly going to the franchises, each of them stand to gain an additional Rs 800 crore over five years. With a whopping Rs 160 crore of added revenue per year, their valuation is all set to sky rocket. Each one of them will now be valued at over Rs 1,000 crore and any interested buyer will have to pay that much more to acquire an IPL team or even a majority stake.
Also, it’s certain that a significant portion of the added revenue will be passed on to the players. Unless that happens, Virat’s salary of Rs 15 crores in comparison to the BCCI’s income of Rs 16,347.5 crore appears miniscule. And Virat, more than anyone else, is the star draw for the IPL for at least the next two years. To expect him to earn the same amount of money while the IPL’s income pool has gone up five times is naive and unfair. Close to 200 other cricketers also stand to benefit from the increased money that has come IPL’s way. Some of them would be domestic cricketers. The teams would now be in a better position to spend on them.
And what does this mean for Star’s India cricket rights, which will come up for renewal next year? Does it also signify a decisive win for franchise cricket over international cricket? Will Star, already Rs 16,347.50 crore poorer, want to renew its India rights to retain market monopoly or will we see the BCCI finding a new broadcaster in 2018? That’s also the real challenge for the BCCI. While Rahul Johri and his team has done well to fetch a massive amount from IPL rights, it was always well known that IPL was the jewel in the BCCI’s crown. Can Johri get an amount close to Rs 60 crore per game for an India match in 2018 or will Indian international cricket be the big loser in the future? For the moment though it’s time to celebrate. For Star, which had withdrawn from being sponsors of the national team jersey citing turmoil in the BCCI, the bid is a kind of patch up with Indian cricket’s apex body. For existential reasons, the patch up was imminent and now it’s a fact of life.
For the BCCI on the other hand, much maligned in the Supreme Court for nonimplementation of Lodha reforms, this is a huge fillip of sorts. Even with brand Indian cricket at its lowest, the BCCI fetched such massive monies for a domestic Indian property, which is now in sync with the world’s premier sports properties. For a league emanating from the global south and one which is only a decade old, this is a massive development.
Just hours before the bids were opened, Lalit Modi had tweeted $5 billion for 5 years is what he wished to see. Ambitious as with all things Lalit, the BCCI should target such an amount and more come 2022 when the rights will be up for grabs yet again. Five-fold increase in 10 years, no wonder the Indian Premier League continues to be India’s only global sports brand.