Ambani takes over broadcasting on Disney in world’s richest cricket league - IPL 2023
The importance of the IPL to media groups was revealed when Disney and Viacom18 spent around $3 billion last June on television and digital rights for the period 2023-2027.
Indian tycoon Ambani captures broadcasting on Disney in world’s richest cricket league
BADSHAHBOOK: Since its launch in 2008, the IPL has become the world's premier domestic cricket tournament. The shorter Twenty20 format - in which games last around three hours compared to the five-day Test matches - has proved suitable for television audiences, attracting the world's best players and hundreds of millions of viewers.
Advertisers, broadcasters and investors have flocked to the 10-team league, whose franchise owners include a number of Indian conglomerates as well as foreign investors such as CVC Capital Partners, which has spent $750 million on the Gujarat franchise in 2021.
The importance of the IPL to media groups was revealed when Disney and Viacom18 spent around $3 billion last June on television and digital rights for the period 2023-2027. These record sums have turned the Indian Premier League into the list of second most valuable sports tournaments in the world on the match basis.
That turned out to be an immediate windfall for the team owners, who are safe from player wage inflation by the salary limit, even when the rights income doubled. That revenue "will be significantly higher for the teams," said Mike Fordham, former head of the Rajasthan Royals franchise. "They're going to be even more profitable than they are." For Disney and Viacom18, however, this battle could prove costly.
While rights spending has soared, analysts and executives expect ad revenue to remain flat as the economic slowdown strains corporate advertising budgets.
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Consultancy Media Partners Asia estimates that this year's IPL season will attract around $550 million in advertising revenue - with total rights costs for media groups equal to $1.2 billion a year. "It's very difficult for these two broadcasters to gain positive cash flows from this," said Santhosh N, the managing partner at valuation firm ‘D and P Advisory’. However, for Relianceand, Viacom18 getting hold of the IPL digital rights is a crucial tool in the conglomerate's long-term efforts to grow a business on sports and digital services.
Disney will battle newcomer Viacom18 — a partnership between Mukesh Ambani's Reliance Industries, Paramount and an investment group led by James Murdoch and former Disney executive Uday Shankar — for viewers and advertisers after losing streaming rights in a record $6.2 billion auction. last year.
Disney holds the rights to broadcast the IPL 2023 with the competition on television and has used its command of the IPL to build one of the most successful media businesses in India.
This included its lucrative Star TV network, India's largest, as well as its Disney+ streaming platform Hotstar, which with more than 50 million subscribers is growing much faster in India than rivals like Netflix.
However, Viacom18 wants to use the competition to build India's leading digital media brand. Its biggest owner, large-pocketed Reliance, has been using price wars and aggressive discounting to enter new business areas. Viacom18 is preparing an "all-out assault on TV," according to one person familiar with the plans, including streaming the competition for free on its JioCinema platform to undermine Disney's pay-TV model.
Analysts add that it is also courting advertisers and has hired several former Star executives. Viacom18 wants JioCinema to "become the default destination for most people," the person said.
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Friday, March 31, 2023, 04:39 PM