Did Disney Star outsmart Reliance in the e-auction?

From closed bids in the previous IPL media rights to e-auction for the 2023-27 seasons, it was actually BCCI which played smart. 

The world’s richest cricketing body has considerably increased its wealth after selling the media rights for the next five seasons of IPL for a whopping Rs 48,390 crore.

While TV rights went to Disney Star India for Rs 23,575 crore, at the rate of Rs 57.5 crore per game, Reliance-backed Viacom18 led by top media executive Uday Shankar has bagged the digital rights for Rs 20,500 crore at the rate of Rs 50 crore per game.

The board sold Package C (India digital rights 18-game non-exclusive pack) rights for Rs 3,258 crore to Viacom18. This means that Viacom18 will pay an additional Rs 36 crore per game for 18 or more games every year.

In effect, the digital rights would cost Rs 23,758 crore to Viacom18, which is more than the sum the cricketing body received for TV rights.

Package D for the rest of world was sold for Rs 1,057 crore.

Even the two winners – Disney Star and Viacom18 – are not in the position to tell what the future holds for them, but as things stand today, Disney Star seems to have outsmarted Reliance.

Disney by nature is a conservative player and no one would have thought of the kind of aggression it displayed in the just concluded e-auction. 

In fact, Disney Star India President K Madhavan on several occasions hinted that Disney will bid aggressively till the time it makes business sense for them. 

But then things changed when Disney’s Chairman of International Content and Operations, Rebecca Campbell, landed in Mumbai 4 days ahead of the e-auction. 

She led the bid from the front and made sure that the incumbent media rights holder successfully defends at least one of the two crucial rights. 

Campbell’s presence had instilled confidence in her team and everyone was sure of retaining at least a part of the IPL media rights.

When media and cricket enthusiasts were busy guessing the winners on Monday and almost handed over broadcast rights to Sony and digital rights to Viacom18, Disney officials told NewsDrum that they were sure of winning one of the two rights.

Any M&E player or media analyst would effortlessly tell you that only Disney Star was in the position to monetise the broadcast rights to the fullest, as it stands today. And the network played on its strength in order to protect its P&L.

Many believe that TV is falling and viewers are migrating to either Free TV or digital and if this trend continues, any broadcaster will struggle to justify such a high acquisition cost.

“While such deterrence would have held others, Disney Star had the confidence on its infrastructure it built over the last 5-6 years,” said a Disney Star executive. 

It is not that digital was less important for the global content company. After all, it built Hotstar riding on IPL over the last eight years. But then, it was left with a incremental near-stagnant growth every year.

Disney left the industry guessing whether and what it will bid aggressively for till the last moment.

At the auction, it played on its strength as per the popular belief that only Star can monetise broadcast as it stands today.

It secured broadcast rights first and then sensed Reliance’s desperation for digital rights.

When the digital rights were closed at Rs 48 crore per game, Disney used its right to challenge the Package B winner Viacom18 with an incremental value of Rs 1 crore per game.

Wouldn’t Disney have factored the risk in case Viacom18 would have backed out at Rs 49 crore per game? The risk was there and Disney would have been in big trouble at Rs 49 crore but then it played well.

It is clear that Disney read Reliance’s mind well in advance. And quit the bid the moment Viacom18 countered with another Rs 1 crore bid.

In the end, Viacom18 takes digital rights at Rs 58 crore per game versus Rs 57.5 crore for TV rights won by Disney.