Disney and Viacom18 winners in $6.2 billion cricket rights

Disney, Viacom18 and Times Internet have won the five-year media rights for the Indian Premier League cricket tournament, the Board of Control for Cricket in India said Tuesday, beating rivals including Sony to a license that gave the California-headquartered giant a big leg up in amassing over 200 million subscribers.

Viacom18 — a venture between Mukesh Ambani’s Reliance and Paramount — scored the streaming rights for the Indian subcontinent region with a bid of $3 billion, said the cricket board, which oversees IPL. Viacom18 will also stream the matches in Australia, South Africa, and the UK, the board said. Times Internet, which operates popular streaming app MX Player and Willow TV, has won the rights to stream the matches in the US and the MENA region, the board said.

Disney bagged the television broadcast rights for the Indian subcontinent for a sum of $3 billion, the board said. In total, the auction for the media rights netted $6.2 billion, nearly three times of the $2.1 billion Disney-owned Star India paid for the past five-year rights.

The announcement on Tuesday confirms TechCrunch’s Monday reporting about Disney and Viacom18 winning the media rights for the Indian subcontinent.

“The BCCI will utilize the revenue generated from IPL to strengthen our domestic cricket structure starting from grassroots, to boost infrastructure and spruce up facilities across India and enrich the overall cricket-watching experience,” said Jay Shah, the secretary of BCCI in a tweet. “Now, it’s time for our state associations, IPL Franchises to work together with the IPL to enhance the fan experience and ensure that our biggest stakeholder – ‘the cricket fan’ is well looked after and enjoys high quality cricket in world-class facilities.”

Started in 2008, the Indian Premier League has helped boost the popularity of cricket in the country and beyond. For about two months each year, some of the world’s top players visit India to face off in three-hour matches for the title. Each match draws more than 50,000 fans to the stadium and hundreds of millions of individuals follow it on TV and online.

For the initial few years, eight teams participated in the tournament, but the number has since grown to 10 after Indian billionaire Sanjiv Goenka bought two teams for a sum of nearly $750 million and $950 million, respectively, figures that are far above the valuation of several clubs in English Premier League, the richest contest in football.

Disney, which through its subsidiary Star India held the previous five-year media rights for IPL, has seen the sporting event help its streaming service Hotstar attract tens of millions of subscribers and break several global streaming records.

Some analysts, however, had recommended the firm to drop out of the bidding because Indian subscribers don’t bring much revenue to Disney, making it difficult to justify the high price tag for the rights.

“I would like nothing better than if they didn’t get the IPL rights and walked back their subscriber number,” Michael Nathanson, a senior media analyst at MoffettNathanson, told WSJ earlier this month. “It would indicate a focus on financial discipline and return on capital.”

Without the streaming rights, Hotstar will face an increased pressure in retaining subscribers. The streamer says it has about 50 million paying subscribers. Disney CEO Bob Chapek has pledged to take Disney+’s subscriber base to 260 million by 2024.

Reliance had made clear its intention about the IPL rights in recent months. In the run up to the auction, TV network Viacom18 partnered with — and raised capital from — Murdoch and Uday Shankar’s firm Bodhi Tree. The duo previously ran Star India and their bet on Hotstar and cricket streaming made the Indian app a crown jewel in Disney’s portfolio.

“The global sports industry has emerged as a mega-growth opportunity, with US sports’ media rights revenue CAGR at 8.2% through CY12-21, accounting 45.2% of 2021 global media rights revenue. Of this impressive pie, soccer commands a lion’s share of 39%. However, of all the sports, cricket rules the Indian market, with a stupendous 94% share in media rights vis-à-vis a mere 3%, globally,” wrote analysts at Elara Capital earlier this month.

“Cricket may continue to enjoy such sheer dominance in India, medium term, propped by large-lucrative properties such as the Indian Premiere League (IPL). Thus, expect IPL renewal to underpin media rights growth in India, medium term.”

Amazon, another key player that had shown interest in bidding for the rights, backed out days before the auction. Meta, which bid for the streaming rights last time and secured some content rights for ICC cricket events three years ago, and Google were also expected to participate in the auction.

The story was updated at 6.39pm IST on Tuesday with official confirmation and additional details.