Billionaire Mukesh Ambani’s media venture has won the digital streaming rights to the Indian Premier League, outbidding entertainment giants such as Walt Disney Co and Sony Group Inc, according to a person familiar with the matter.

The online rights to the popular annual cricket tournament were awarded to Viacom18 Media Pvt, a joint venture between Paramount Global and Ambani Reliance Industries Ltd, the person said. The local cricket governing body, the Board of Control for Cricket of India, which kicked off the auction on June 12, has yet to officially announce the winner.

The Financial Times reported that Viacom18 bought the rights for around $2.6 billion (approximately Rs 203 billion), while the New York Times reported the deal was closer to $3 billion (approximately Rs 2,340 crore). billion rupees). However, the Financial Times said that Disney did acquire the TV rights to the game for about $3 billion (approximately 234 billion rupees).

The five-year digital contract is a crucial win for Ambani’s conglomerate, which has an ambitious entry into the club of global media and online streaming giants. Known as the Super Bowl of Cricket, the IPL is one of the fastest growing sporting events in the world and has a cult-like status among the diaspora in South Asia and the subcontinent. It has attracted more than 600 million viewers and is also seen as the fastest way to grab attention and expand the audience of any platform in India, the world’s largest consumer market with a population of nearly 1.4 billion.

Representatives for Reliance and Disney did not immediately respond to requests for comment. Disney shares fell 3.7% in a broad market sell-off on Monday, extending this year’s losses to 38%. Shares in Reliance were down 0.6% as of 9:34 a.m. in Mumbai on Tuesday.

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long-term stickiness

Utkarsh Sinha, Managing Director of Bexley Advisors, a boutique technology-focused investment firm, said: “IPL is one of the highest converting assets in the competitive OTT market, where consumer wallet saturation and fragmentation are fast becoming insurmountable challenges.” and media. “It provides long-term stickiness, which is again difficult to achieve because users show capricious loyalty to the platform and dynamically move to where the content is.”

Four contracts are up for grabs from 2023, covering a broad range of TV and digital rights, as well as some key competitions in the Indian subcontinent and overseas. For the first time, the BCCI auctioned off the broadcasting rights and streaming rights of the IPL separately.

Although Amazon.com Inc. unexpectedly pulled out of the auction at the last minute, competition at the auction remained fierce. The total bid has exceeded Rs. 450 billion, more than Rs. According to Bloomberg, the BCCI set a floor price of $328 billion. That’s almost triple the amount raised at the last auction in 2017.

Before Amazon pulled out of the race, people familiar with the development expected the auction to attract more than Rs. The total bid was $400 billion, with one analyst even predicting as much as Rs. 600 billion.

Cricket is a quintessentially summer sport with huge fan bases in most of the Commonwealth of Nations, especially the Indian subcontinent. Second only to the Premier League and National Rugby League in global popularity, the IPL is increasingly seen as a key catalyst for any media company looking to entice Indian consumers to shop and play online.

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The value of IPL is Rs. Duff & Phelps (now known as Kroll) will be worth $458 billion in 2020. Santosh N, managing partner of D and P India Advisory Services, said it could now be 25% higher, thanks in part to the addition of two new teams that increased the competition to 25% in the just-concluded season. 74 games. The league now has 10 teams.

IPL started in 2008 and is a shorter and more interesting format. Usually held in April and May, each match lasts three to four hours, compared to the one-day version and the classic five-day Test cricket known for its coffee break. The stadium that hosts IPL matches features merchandise and a carnival-like atmosphere, with Bollywood actors often cheering from VIP boxes.

breathe a sigh of relief

Some shareholders may breathe a sigh of relief even though Disney lost the rights it inherited from the global entertainment assets it acquired from 21st Century Fox in 2019. Subscribers to Disney+ Hotstar pay an average of 76 cents a month to get the service. With annual revenue of less than $500 million (approximately Rs 390 crore), it is difficult to justify the annual royalties.

Morgan Stanley analyst Ben Swinburne wrote in a May 12 research note that “India’s earnings is minimal” and that if Disney doesn’t accept the contract, there won’t be a material impact on earnings. Chief executive Bob Chapek told investors in February that while cricket is a big part of its offerings, the company’s new local content being developed in India will mitigate its impact.

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“If we didn’t get it, we wouldn’t see the business evaporate,” Chapek said.

Still, the loss could impact the Burbank, -based company’s ambitious goal of gaining as many as 260 million users globally by 2024. While rival Netflix Inc. lost subscribers last quarter, Disney+ added 7.9 million subscribers. More than half of them came from Disney+ Hotstar offered in India and several other Southeast Asian countries. Another 10 IPL matches last quarter contributed to the increase in Disney’s international advertising revenue.

Disney+ Hotstar now has 50.1 million paid subscribers

For Reliance, the first bidder in the IPL’s 15-year history, the cricket streaming rights will also boost the e-commerce and retail ambitions of its technology venture Jio Platforms Ltd.

Bexley Advisors’ Sinha said Reliance “has energized IPL assets with the deepest pockets and longest staying power”. “As consumer media wallets continue to be fragmented into smaller segments in an overcrowded market, Reliance may approach it with a ‘consolidate and dominate’ strategy. IPL’s victory is a strategic move in this direction step.”

© 2022 Bloomberg LLC



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