In permitting consortiums to participate in its bilateral media rights auction, the Board of Control for Cricket in India (BCCI) has made a significant policy adjustment. This represents a departure from their previous stance, in which consortiums (a group of businesses or banks working together to achieve a common goal) were not permitted to participate in media rights bidding, even being excluded from the Indian Premier League (IPL) media rights auction last year.
While the immediate justification for this policy change is unclear, it appears to favor Sony Pictures Network India and Essel Group (Zee Network), which have been actively pursuing a merger. In terms of business, the policy’s relaxation enables two media corporations to establish a united front.
This strategic move appears well-planned at first sight. Sony and Zee could potentially establish a formidable entity, resulting in an increase in the value of media rights. Both firms have substantial linear and digital presences, posing a formidable threat to rivals such as Viacom 18 and Disney Star. If they were to pursue separate paths, this advantage might not be as pronounced.
In India Inc., the long-awaited merger of Sony and Zee has garnered significant attention over the past few years. Nonetheless, the ultimate approval has been delayed by a number of legal disputes. The most recent information indicates that October 1 is a possible completion date for this unification. It is unclear whether they will establish a consortium, but according to the ITT, the BCCI has no objections.
In addition to these occurrences, the Invitation to Tender (ITT) issued by the BCCI on Thursday, October 3 outlines three crucial timelines. The auction is scheduled to conclude on August 31, and the BCCI will receive inquiries until August 16. Technical evaluation proposals are due by August 28, two days before the auction.
The BCCI stipulates that participating firms’ incremental proposals must total at least 1 crore rupees. In essence, companies competing for the two bundles – India subcontinent linear rights and India subcontinent digital rights, as well as global TV and digital rights – must increase their proposals by Rs 1 crore collectively. For instance, a proposal of Rs 25 lakh for Package A and Rs 75 lakh for Package B would satisfy this criterion, so long as the total amount exceeds Rs 1 crore. Even if a company is only vying for a single package, the incremental proposal must be Rs 1 crore.
According to previous reports, the next five-year iteration, beginning in September 2023, will consist of 88 games. The base fee for linear rights is Rs 20 crore, while the base price for the digital package is Rs 25 crore. The BCCI has indicated that the entire process may be reconsidered if the total value does not exceed Rs 60 crore, or Rs 5200 crore overall.
In addition, the winning company or companies must provide commentary in five languages, including English and Hindi, with the remaining three regional languages selected at the discretion of the broadcaster.
