Rupert Murdoch’s Star India has seen off rival offers from Sony Pictures and Facebook with a record $2.6bn bid to secure the rights to show the Indian Premier League cricket competition around the world for the next five years.
Star India, a subsidiary of 21st Century Fox, won the auction for the IPL rights on Monday, beating Sony Pictures, which owns the broadcast rights until next year, and Facebook, which had bid $600m for the digital rights. Sony had paid about $1bn for its ten-year contract, meaning the value of the competition has quintupled in a decade.
The IPL lasts for just two months of the year, but its popularity among cricket-mad Indians means it has become one of the most lucrative sports tournaments in the world. It has already set records for player fees, with the Rising Pune Supergiants paying England all-rounder Ben Stokes about $2.3m to play for them in this year’s competition.
A range of US West Coast players, from Amazon to Yahoo, had expressed interest in the IPL package, but Facebook was the only one to make an offer for the digital rights. It was pipped by Star, which was the only company to make a “global bid” for both worldwide broadcast rights and digital rights. Sony bid about $1.7bn for the domestic rights as well as some of the international ones.
Star’s knockout offer reflected similar bids by Mr Murdoch’s other companies — namely Sky television, which has used Premier League football rights to build a commanding position in UK pay television.
Rahul Johri, chief executive of the Board of Control for Cricket in India, the sport’s governing body, said: “The IPL is one of the biggest cricketing properties globally. That the best companies in the global market have shown interest is a testimony to the value that it brings in for the investors.”
The successful bid by Star underlines the Murdochs’ commitment to India, having set Star an operating income target of $1bn by 2020. Uday Shankar, Star’s chairman and chief executive, said last year that the company would generate $500m in operating income in 2018. The IPL rights will complement a portfolio that includes international cricket, tennis and European football, as well as kabaddi, India’s oldest sport.
Star will hope that the IPL maintains its rapid growth. This year, a total of 1.3bn people watched at least some of the IPL around the world — up a quarter on the previous year, and equivalent to the entire population of India. Ten seconds of advertising space during an IPL match can sell for as much as Rs800,000, about $12,000.
“After demonetisation [last year’s unexpected decision to replace almost all Indian banknotes], advertising rates went down for almost everything, except for the IPL,” said Chetan Narula, a cricket journalist. “That’s when it really proved its value.”
IPL has continued to grow in popularity despite a match-fixing scandal in 2013, which saw two teams suspended from the competition. The teams — the Chennai Super Kings and the Rajasthan Royals — will rejoin next year.
The money from Star Sports will provide a useful financial boost for the BCCI, which has endured a torrid year, having been taken over by a court-appointed panel as the consequences of the match-fixing scandal continue to ripple through the sport.
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