The media rights for the 2023 to 2027 season of the Indian Premier League will be on e-auction on June 12 and a report by Elara Capitals cautions that these could be a "winner’s curse for broadcasters".
In an interview with CNBC-TV18, Karan Taruni of Elara Capitals said, "The content cost is going to be phenomenally high there is no doubt about that, what we are expecting is that the premium on the digital part will be as high as 90 to 100 percent. For broadcasting, it will not be higher than more than 25 to 30 percent. Because broadcasting as an industry is not growing too much."
Taruni further adds: "The breakeven will happen in the third year and the profits will happen in the fourth and the fifth year."
The biggest media companies from India and abroad are in a race to win the rights to win the right to bring to the billions of cricket fans the IPL action via TV and the internet.
From domestic players like Disney+ Hotstar, Sony Network, Viacom Reliance, and Zee Entertainment, tech giants such as Amazon, Apple and Google have also shown interest this time around. All these companies have picked up bid documents.
Despite the companies suffering losses in the first two to three years of buying the IPL media rights, according to the report, they would fight tooth and nail once the rights are up for sale in the e-auction.
The report titled "Force Multiplier of front foot" published by Elara Capitals states:
"Expect IPL media rights for the next cycle (2023E-2028E) to grow in 3-4x range (25 percent growth due to more matches) to INR 500-600 bn, led by the sharpest growth in digital media."
The report states that cricket will continue to enjoy "sheer dominance in India", "propped by large-lucrative properties such as the Indian
Premier League".
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The IPL-media rights grew the fastest compared to other top sports leagues like the English Premier League (EPL), the National Basketball Association (NBA) and the National Football League (NFL).
The last year saw the world of sports come up with $ 52.1 billion worth of media rights. It was a 13.8 percent rise or approximately $7.2billion versus 2020 levels. About $47.9 billion was generated by the top-10 most-valuable sports combined from media rights in 2021, scripting a strong recovery from USD 41.5 bn/USD 46.9bn in 2020/2019. Cricket's contribution was only 3 percent but the IPL remained the fourth most valuable global league.
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(Edited by : Abhishek Jha)
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