Broadcast rights for the Indian Premiere League (IPL), which come up for renewal in 2017, may fetch the Board of Control for Cricket In India (BCCI) $3.2 billion dollars, according to Varun Gupta, the managing director of Duff & Phelps (D&P) India. The IPL contract is for a ten-year period.
The ninth edition of the IPL was mired in controversy after the BCCI suspended two IPL franchises – Chennai Super Kings and Rajasthan Royals – over allegations of corruption and match fixing, and title sponsor Pepsi pulled out prematurely.
A report by D&P India, a valuation and corporate finance advisor, suggests that the IPL has not only survived, but thrived in the face of this adversity. Varun Gupta of D&P India told BloombergQuint via email,
We believe the renewed broadcast rights deal will see a jump of around 150 percent of the current deal, which stands at $1.3 billion. We expect it to touch $3.2 billion for a similar contract period.Varun Gupta, Managing Director, D&P India
Spectator Interest
One reason for D&P India's optimism is that both Television Rating Points (TRPs) and attendance at IPL matches saw a dramatic pick-up after sluggishness in the first two weeks. Sony Picture Networks India currently holds broadcast rights for the IPL till the end of season 10 in 2017.
The report also points out that IPL viewership on digital platforms rose significantly over the last year. Hotstar, a Star India platform, which holds the tournament's internet broadcast rights, saw IPL viewership rise to 100 million in 2016 from 41 million in 2015.
Social Media Reach
The study also pegs the IPL as the fastest growing global sports league on Twitter. According to information D&P India received from Twitter India, the number of mentions of IPL on the social media platform registered a growth of 300 percent compared to the Union Of European Football Association (UEFA) Champions League, which grew 239 percent, the National Football League (NFL) which grew 125 percent, and the National Basketball Association (NBA) which grew 99 percent.
Over 30 million users on Facebook participated in 360 million conversations – the highest ever on the social media platform for the IPL. The number of ‘likes' on the official IPL Facebook page also grew over the last one year by 2 million to reach 18.4 million in 2016, according to the D&P India report.
VIVO, the Chinese mobile phone manufacturer, came on board as the title sponsor in 2016, filling the vacuum left by Pepsi, at a 25 percent premium, paying Rs 100 crore for two seasons.
The Sweetheart Clause
There is a catch, however. The current broadcaster Sony has the right of first refusal, according to the contract with BCCI. This means that they have the right to make an offer to the BCCI, which in turn can make them a counter offer. The broadcast rights will only go to auction if both parties cannot come to an agreement.
Sony indicated its intention to retain the broadcast rights post 2017 in an email statement to BloombergQuint.
Sony Pictures Networks India (SPN) has the IPL broadcast rights upto 2017. Over the last nine years, we have invested heavily in co-creating the iconic stature and brand equity of IPL and have nurtured it into being recognised as one of the most sought-after sporting entertainment property, internationally. After having delivered successfully upon Season 9 of IPL, we look forward to serving our viewers in Season 10, and many years after that as well.Sony Pictures Network India
An email and repeated follow-up over days with the Star Network's communication team did not elicit any response.
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