BCCI Defers Indian Premier League Media Rights
18 potential bidders included leading media and technology companies such as Star India, Amazon, Sony Pictures Networks India, Reliance Jio Digital, Twitter and Facebook
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The inevitable has happened. The Board of Control for Cricket in India (BCCI) has called off the IPL media rights tenders for which 18 potential bidders had come forward, including leading media and technology companies like Star India, Amazon, Sony Pictures Networks India, Times Internet, Reliance Jio Digital, GroupM Media, ESPN Digital Media, BT, Twitter and Facebook among others.
On late Monday evening (Oct 24), the BCCI tendered its 'sincere apology' to all 18 potential bidders for their interest in the media rights for the next 10 editions of the Indian Premiere League (IPL) as it decided to call off the auctions. It said the next move in this regard and any decision in the matter will rest with the Justice RM Lodha committee.
The BCCI statement brought an end to the 72-hour drama that had played out between the board, the committee and the bidders. It should be noted here that one of the potential bidders - Star TV , the broadcast rights holder for Indian cricket - had already informed the BCCI of its decision to not participate in the tender process "until there was complete clarity" on the matter.
"At the time of going to press, BCCI has not received any further directions from the committee, which is now the custodian of the entire (bidding) process and has been tasked with the duty to ensure that the tender process is undertaken in a professional and transparent manner with least inconvenience to all stakeholders involved," BCCI said in its statement.
BCCI, however, reiterated that it appointed independent agencies to vet the legal, financial and technical details of the bids as well as the bidders and cited the Supreme Court judgment on October 21 to suggest that the Lodha committee should now be the custodian of the entire process.
The court order had directed the BCCI to route all tenders and contracts through the Lodha Committee. In the order, the court had also asked the committee to appoint an independent auditor to oversee all existing and future finance-related issues, tenders and contracts of the board. The court also asked the committee to set a "threshold value" for contracts; whenever that limit was exceeded, the BCCI would need to seek approval from the Lodha panel before moving ahead in the particular matter.
Setback to IPL
With the Lodha panel now virtually left with the powers to take any decision on the next lot of media rights, the future of IPL for now looks bleak. Barely eight-days ago the BCCI had announced to the world that it got "massive response" to its IPL media right invitation to tender (ITT) as 18 players had picked up the tenders in the one-month period purchase window between September 19 to October 18.
Back then, Anurag Thakur, the BCCI President had said: "This is going to be a historical moment for Indian cricket. I am pleased to see the overwhelming response from the media and technology companies for IPL media rights. With the global trends of showcasing content on multiple platforms becoming increasingly important - TV, Internet and Mobile rights are up for grabs together this time. To have as many as 18 prospective bidders in the fray reinstates the faith of market forces in Indian Premier League."
The BCCI had divided these rights into three separate categories - TV rights of IPL for the Indian sub-continent (for 10 IPL seasons, 2018 – 2027); the India digital rights and and rest of the media rights for a set of 5 IPL seasons falling between 2018 – 2022.
How things unfolded?
The Lodha Committee now virtually taking charge of the day-to-day functioning of the BCCI comes after a long journey that started in 2013 with the allegations of match-fixing scandal that had hit the IPL back then. The Apex court had initially appointed the Lodha Committee to determine appropriate punishments for those involved in the fixing, and propose changes to the BCCI's functioning to ensure best practices. In July 2016 the court accepted the majority of the committee's recommendations, covering wide-ranging aspects of Indian cricket at the central and state level, making it binding on the BCCI to implement them. The BCCI, however, has been questioning the wisdom/benefits of some of the recommendations. In the process it has managed to upset the apex court's decisions which has led to the current day's position and prompting the Lodha Committee and the Supreme Court to pursue the matter.
Why IPL Media Rights Are Important?
BW Businessworld in its issue dated 'June 13, 2016' had done a cover story titled 'IPL Is Back On The Block' analyzing why the media rights virtually meant war for interested bidders and how IPL has been a money churner for the stakeholders.
“In retrospect, IPL has turned out to be the biggest property on television. But it has taken significant effort from us to get there. Every year, we created award-winning marketing campaigns to build IPL. We never took the platform for granted. Had we not put the kind of money we did at the time of the bidding, we would not have seen franchise owners investing so much in IPL either,” Rohit Gupta, president, Sony Pictures Network, had explained.
Sony Pictures Network, then SET India, had partnered with Singapore-based World Sports Group in 2008 to put a sum of $918 million and an additional promotional spend of $108 million for the tournament for a 10-yr period. Barely a year later however, BCCI opened up the property for renegotiation and milked a fresh deal pegged at $1.6 billion (Rs 8,200 crore) in 2009, for the remaining nine years.
IPL, the sixth largest valued sports league globally, generated an estimated Rs 2,650 crore in economic output in 2015, according to KPMG. Consulting firm American Appraisal put the brand value of IPL at a humongous $3.54 billion last year; this year fresh industry estimates are putting the figure at $4.3 billion, the story had said.