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    Billionaire bets on Indian Premier League big-money TV deal

    Broadcasters and billionaires anticipate a fierce bidding war on Indian Premier League television rights for next year’s update, after high payments have been made to two new teams participating in the expanding cricket competition.

    Corcata-based utility and retail tycoon Sanjiv Goenka and European private equity fund CVC Capital Partners are owned by billionaires such as Gortam Adani, Udaiko Tuck, and Manchester United stakeholder Avram Glazer. We defeated the companies that do so and launched a new franchise at the end of last month. ..

    Goenka’s $ 71 billion bid for the Lucknow franchise and CVC’s $ 56 billion offer to Ahmedabad are big bets on the rights to broadcast in South Asia’s most popular sports league today. It was the first time that a franchise auction had attracted two financial bidders from abroad.

    The current Disney-owned television deal with Star India will end next season, and the next iteration is expected to generate far higher offers than the 2018 star wins. The Rs 162 billion paid by the star for a five-year contract was almost four times the amount Rs 82 billion paid by Japanese rival Sony Sports to screen the first decade of the league in 2008.

    According to Star India, about 400 million people have participated in at least one match in the last few seasons. Given the ongoing turmoil of Covid-19 in 2020 and 2021, there are no small feats. The last two competitions were held primarily in the Arab region. The Emirates and 2021 seasons had to be paused in the middle of four months. It ended only on October 15th and was won by Chennai Super Kings, a team owned by construction giant India Cements.

    “As we saw in recent auctions, the IPL team’s reputation has risen significantly and broadcasts will inflate. We expect at least three big players to participate in the race, and the bid is It’s going to be very fierce. Inflation rights bids could double and are expected to range from 400 billion to 450 billion rupees, “brand strategist Harish Bijoor said. It suggests that the value will be doubled.

    Sony may bid with Zee Entertainment Enterprises if it succeeds in consolidating its Indian operations as planned. Stars are also expected to bid on their rights again. Other companies, including TV18 Broadcast, owned by billionaire Mukesh Ambani, are also keen to enter new businesses.

    Facebook, which bid for digital-only rights in 2018, could be mixed again. In support of Star’s joint proposal for both television and digital rights, the $ 600 million (Rs. 39 billion) proposal for digital rights was rejected.

    The new franchise will expand the 2022 IPL starting in March to 10 teams. This means that the season will expand from 60 games to 74 games.

    IPL’s four-hour cricket format, when launched in 2008, was immediately successful, with the glitz and celebrity charm of millionaires. Reliance Industries’ Mukesh Ambani, JSW Group’s Sajan Jindal, and Wadia’s chairman Nusri Wadia are among the investors in the league’s team, along with Hindi movie stars such as Shah Rukh Khan and Preity Zinta. ..

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    This article is from Nikkei Asia, A global publication with a unique Asian perspective on politics, economics, business and international affairs. Our own correspondents and external commentators from around the world share their views on Asia, and the Asia300 section details the 300 largest and fastest-growing listed companies from 11 countries other than Japan. increase.

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    For Indian cricket enthusiasts, superimposing movie stars and cricket legends has become a new version of reality TV. Lalit Modi, who started the league as founder and commissioner, was praised for bringing together fighting cricket managers from various states and providing the Indian Cricket Management Board (BCCI) with a new money-spinning industry. I’m looking for a way to support domestic cricket.

    The controversy arose early on. Match-fixing allegations, government investigations into the team’s financing, and allegations of misconduct that led to a lifetime ban on Modi from BCCI, he denied the allegations and did not prove indictment in court. But nothing undermines the popularity of IPL and its ability to attract top players around the world.

    Or about that, its ability to attract sponsorship and advertising. The match instantly gives brand awareness to companies seeking to establish their position in the Indian market. Most of IPL’s top sponsors compare Chinese phone handset maker Vivo, online education company Byju’s, online gaming company Dream11, and India’s largest initial public offering, Paytm. It is a young company.

    Vivo withdrew from the IPL’s 2020 season due to heightened border tensions between India and China, but returned in 2021. Just weeks after Dream11 paid Rs 2.2 billion for its IPL title sponsorship in 2020, it raised $ 225 million from investors led by Tiger Global Management.

    Management consultant Duff and Phelps said in March of this year that the IPL ecosystem, including the franchisee, for Covid’s pandemic, which hit ticket and food sales and brought costs to keep players in a virus-free bubble. Value and governing bodies decreased by 4% from 475 billion rupees in 2019 to 458 billion rupees in 2020. Of the team, Mumbai Indians remained at the top of the brand rankings for the fifth consecutive year, recording a brand value of 7.6 billion rupees. It decreased by 6% from 2019.

    The new franchise auction suggests that the recovery of valuations that began with the delay in the start of the 2020 season is accelerating. This means that top teams such as Chennai Super Kings and Mumbai Indians can reach “Unicorn” status, worth over $ 1 billion each.

    Based on the price paid, Mumbai-based brokerage firm Motilal Oswal Financial Services has chipped shares in United Spirits, a listed subsidiary of Diageo that owns the Royal Challengers Bangalore team. The Royal Challengers, who finished third in the league this year, are headed by Indian captain Virat Kohli.

    “Even if we benchmark the RCB’s rating for the new Ahmedabad franchise as a base case, it could rise by nearly 10% from the current market capitalization of United Spirits,” said Motilal Oswal analyst Krishnan Sambamoorthy.

    At least one billion billionaires believe Goenka and CVC have paid a lot. “I think the bids are very high,” he said, asking IPL advertiser Mumbai-based executives not to be identified. He noted that the first eight teams were sold for a total of Rs 29 billion in 2008, and Ambani’s highest bid for Mumbai Indians was Rs 4.47 billion.

    “We believe the Lucknow franchise will cost Rs 36 billion in the first decade,” he said. “And it will be a break-even point even in 22 years.”

    But the denials haven’t hurt Goenka’s enthusiasm. Billionaires said they would regain half of the money they paid within 10 years from ticket sales, team and event sponsorship, and a share of the Lucknow franchise’s new broadcast rights deal.

    Goenka and CVC will have to pay the total winning bid in equal installments to BCCI over the next 10 years. In return, BCCI will evenly pay 10 teams half of the money received from the broadcast rights and sponsorship.

    “The net difference between what we get and what we pay BCCI as a license fee is halved … The amount we have to pay BCCI over the next 10 years,” Goenka told the TV channel.

    Jay Shah, BCCI’s Honorary Secretary and son of India’s Interior Minister Amit Shah, will make the next IPL season much “bigger and better” by adding a new franchise. I promised.

    “Despite the many challenges raised by Covid-19, the 13th and 14th seasons have been completed. The bid proves that stakeholders trust BCCI and its hosting capabilities.” He said.

    NS Version of this article Published by Nikkei Asia on November 16th. © 2021 Nikkei Co., Ltd. All rights reserved.

    Billionaire bets on Indian Premier League big-money TV deal

    Source link Billionaire bets on Indian Premier League big-money TV deal

    The post Billionaire bets on Indian Premier League big-money TV deal appeared first on Eminetra.

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