BCCI's move to reduce IPL media rights period well received

The BCCI’s decision to reduce the media rights period for the IPL from 10 years to 5 years has been welcomed by cricketing experts. As per the tender that was proposed in September 2016, the broadcast rights were issued out for 10 years, while the digital rights were only for a period of 5 years. Following the appointment of the Lodha panel by the Supreme Court, the bidding process was cancelled.

However, the BCCI has come to understand that the gap between broadcast and digital mediums is rapidly reducing. As a result, the board has decided to offer a 5 year period for both rights.

Nevertheless what remains unclear is whether the new tender will allow the board to compare consolidated bids with bids for individual rights. The BCCI hasn’t clarified what happens in a case where bidders attach one figure for all three rights without specifying the price for each individual right.

As of now, the rights have been divided into three categories, which are Indian subcontinent television rights, Indian subcontinent digital rights and the rest of the world media rights (broadcast and digital).

Some industry executives have however questioned the BCCI’s move saying, “By allowing consolidated bids, BCCI is restricting market forces from individually valuing media rights. It is likely that the BCCI sees the interest of broadcasters as primary because that’s the bigger revenue pool, or the board is apprehensive of taking the risk of floating digital rights separately because it doesn’t believe the market has warmed up for separate pricing of digital rights yet.”

BCCI’s move questioned

In particular, Ashish Bhasin, the chairman and CEO at Dentsu Aegis quoted to Cricbuzz, “Smartphone penetration in India is about 20%. In two years it will reach 30% or higher, which will be an inflection point. It’s clear that the digital platform should be treated on its own merit.”

On the other hand, Jatin Ahluwalia, founder and CEO at Seven3rockers Technologies, opined that the BCCI has exhibited transparency in the new tendering process. He felt in the earlier scenario the broadcaster had a clear advantage. “But it also needs to recognise the emergence of small start-ups who can only bid for digital and not broadcast,” he added.

According to reports, the BCCI has also proposed that digital streaming will be deferred by five minutes unless the broadcaster also decides buys the digital rights and is thus allowed live streaming for no extra fee. To this proposal, an advertising industry executive had a question for the BCCI, which could shed some light on the board’s fresh moves, “”In the previous (September) bids that were cancelled, how many parties bought the tender to bid only for digital rights vis-a-vis those who were bidding for broadcast rights? By comparing the two, the board should be able to know how much interest is already there in digital-only rights.”

The bidding process is scheduled to begin in early June, and a final decision regarding the broadcasters will be taken in July.