IPL Media Rights: Disney Star Must Push Tough Deal With Advertisers

The total expenditure for Disney Star to IPL media rights which has just ended for five years is Rs 23,575 crore. This brings into play the television broadcasting rights for the Indian subcontinent. How does the calculation work in terms of recovering this investment?

Each IPL match has approximately 3,000 seconds of advertising time and Disney Star revenue will come from a mix of advertising and subscription.

For the just-ended season, the average rate for a 10-second spot was Rs 14-15 lakh (this is a combination of bundled and one-off offers cutting matches before arriving at a number average), which means at the top end one the match has grossed Rs 45 crore. This multiplied by the total number of matches (74 in the case of IPL 2022) translates to Rs 3,000-3,300 crore. Adding another Rs 800 crore from Hotstar, the network’s OTT platform, the total comes to around Rs 3,800-4,000 crore.

Cut to the 2023-2027 five-year candidacy which has just been won. At the price Disney Star bought the rights to 410 games (this number fluctuates in a few years but the average is 82), the total revenue to be made per game to recoup the cost is Rs 57 crore. Again, at 3,000 seconds per game, each 10-second spot is to be sold at Rs 19 lakh or a 27% upside from the Rs 15 lakh commanded by this year’s edition.

On a cost per ball (taken as 20 overs per side or 240 balls played in all) for each match, this translates to Rs 23.75 lakh. By far, IPL remains the most expensive advertising proposition on television – the cost of the final exceeds Rs 20 lakh for a 10-second spot beaten only by big-money world cup matches such as India v Pakistan or India against Australia. .

The challenge for Disney Star in the new storyline with only TV broadcast rights means it will be difficult to sell a package/bundle package as digital has moved to Viacom18. Karan Taurani, Sr VP, Elara Capital, highlights advertising sectors where key segments such as e-commerce, automotive and banking dominate the overall pie across TV and digital at 60% of the total pie. “However, in the event that IPL rights are sold separately, we expect fierce competition within TV and digital platforms for advertising budgets. We see certain verticals like fintech, commerce, edtech and electric vehicles are moving rapidly towards digital, while consumer goods and automobiles will continue to rely heavily on television for their mass campaigns,” he said.

For Disney Star or any other network, subscription revenue scales with the type of programming they have, with IPL always seeing an increase in numbers. That said, it is advertising that will most often generate a network’s revenue.

Madan Mahapatra, an independent marketing and media consultant, says the premium amount for digital rights (Viacom18 paid Rs 20,500 crore for basic digital rights and Rs 23,758 adding all non-exclusive markets and some markets foreigners) is 5x more than in 2017, when Facebook was the highest bidder at Rs 3,900 crore. “Television is twice as much. However, the argument also works in favor of digital which has not yet reached its peak in sports and therefore may be easier to sell compared to television, which has presumably reached its peak,” thinks he. To that extent, the leeway Disney Star can raise rates for a somewhat reluctant advertiser will be attractive. “At the end of the day, many will be driven by unicorns and a few crazy cricket brands who want to fight for 40 more stocks.” Digital today is driven by feedback and that’s the story that will last at least for a while.

In the 2022 edition of IPL, TV ad revenue made about 3.5 times more than digital for Disney Star. However, in terms of acquisition costs for digital, the difference is remarkably small. Whether it’s the story of hidden digital potential or Viacom18 overpaying, it’s something waiting to be told.

Also Read: IPL Media Rights: STAR India wins TV, Viacom18 grabs digital rights, confirms Jay Shah

Also Read: IPL Media Rights Auction: ZEE Praises BCCI for Efficient and Transparent Process

Also Read: IPL Media Rights: Digital Deal Overtakes Traditional TV in Bid Battle

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