The media rights online auction on June 12 could be a pivotal moment not only for the Indian Premier League (IPL) but for global sport as well.
If the internal estimates of the Board of Control of Cricket in India prove correct and exceed the value of collective rights across categories R45,000 crores (~6 billion USD, 2023-27), the IPL could become the second most valuable league in the world.
It would have jumped past the English Premier League and Major League Baseball (MLB) and become second only to the National Football League (NFL). This is what’s in the cards with BCCI raising the ante by pegging the collective reserve prize R32,890 crores, i.e. twice the present value.
The comparative ratings we are talking about are not absolute as the leading sports leagues are played across different periods. The IPL has the shortest playing period and the fewest matches (74 matches, 8 weeks) in between. The NFL sees 272 games played over an 18-week period. The Premier League and the Bundesliga have a total of 380 and 304 matches respectively, played for nearly 10 months. 162 MLB games are played in a seven-month long season.
But in terms of just media rights value per match, the IPL could go up from US$8.5 million in (2018-22) to US$16.21 million. According to the 2020 Duff and Phelps IPL Brand Valuation Report, the NFL tops the list with $17.36 million per game. Since then, the NFL has boosted its numero uno position, having doubled its valuation in the latest round of media rights sales, last year. Estimated future NBA ratings are expected to nearly triple, but given the sheer number of games played in the season, the cost of each game will rise proportionately.
For the IPL, who is only a decade and a half old, being on the podium with the European soccer leagues and the American sports leagues is an extraordinary success story.
“The comparisons are not entirely representative because other leagues maintain such high ratings over a much longer duration. But what the IPL has clearly done is put cricket and India on the sports world map in a short amount of time,” says N Santosh, Managing Partner of D& P Advisory.
With India’s demographic advantage and deep interest in cricket, the new media rights deal is expected to enhance BCCI’s financial leverage in the larger cricket ecosystem.
In cricket, IPL is the most valuable and highest paying league in the world. The maximum salary for an IPL player across ten perks is R900 crores annually. English Cricket’s (ECB) Big Bash comes in second and third place with an approximate total wage portfolio of R80 and 75 crores respectively.
But the excessive commercial dependence on India’s market also prevents IPL from expanding its reach into international enclaves. According to a 2019 Sportingintelligence research report, the Premier League is leading the way by far in getting significant media rights income from its overseas market (45.7% of the total). Looking at the attractiveness of global football, La Liga (44%) is followed by the Italian League (27.9%). Despite the Super Bowl being one of the most watched singles sporting events, the NFL’s gains outside the US market are limited (2.7%).
Efforts to globalize cricket have been slow but stakeholders see potential for IPL growth abroad.
“There is still potential for growth both in India and around the world with markets in the UK, US and UAE growing significantly over the past three to five years,” said Manoj Badal, principal owner of Rajasthan Royals. “We believe this can increase further, and it would be great to learn from the example of the Premier League where external rights equal their domestic rights.”
A closer look at the IPL’s recent rights cycle reveals that the IPL’s external value would have made up 5.5% of the total, had their consolidated Star bid not won all the categories at once. In the upcoming auction, the likes of South Africa’s SuperSport sports network and Sky’s UK have bought the media rights tender for the Rest of the World category.
Social media access
A major recent metric used to measure a property’s growing fan base is the league’s social media. The IPL can significantly raise its game on this vertical at number 6 with an average follower count (Twitter + Instagram + Facebook) of 12.9 million. The NBA tops social media with an average of 48.3 million followers, followed by the Premier League (46.7 million), La Liga (43.4 million) and the NFL (24.2).
The social media phenomenon is relatively new and the foreign leagues first mover advantage is being neutralized. Given the huge cricket fan base in India, the current numbers are modest. A big drawback is the IPL’s limited playing window and the relatively smaller number of teams playing.
“The significance of the IPL on social media is that 60 days and two weeks before and after it. This is the underlying challenge compared to other leagues,” said Siddharth Raman, Executive Vice President at Sportz Interactive, which deals with fan engagement in the sport. And social is where the next room to unlock value in IPL is. There are nearly 700 million people online in India. Even if the IPL reaches half of them, you’re talking about my league reaching the US population in a couple of months.”