If Sony lose out on the IPL, it won't be the end of the world, say experts
Read here:
The sports broadcasting war: Here’s how Sony plans to topple Star
Extract:
What if Sony does not manage to retain the IPL?
“It will be a big body blow for Sony,” said Harish Krishnamachar, a sports marketing professional and founding partner of Sportoid Sports Solutions. “In my mind, a lot of Sony’s stickiness (ability to retain viewers) comes from something like the IPL. The subscribers, the advertisers, everybody knows that the IPL is going to come around again next year and it’s a cannot-miss property.”
Sony can also get year-long subscriptions on the back of the IPL and a couple of other marquee tournaments it owns the rights to, such as the 2017 Fifa U-17 World Cup, which is being hosted by India, and the Champions League. The IPL also brings in a lot of advertising revenue. According to a
report in the
Financial Express, Sony met its target of Rs 1,300 crore in advertising revenue from IPL 10.
Star, on the other hand, does seem better placed than Sony to survive without the IPL. However, experts said that it wouldn’t be the end of the world for Sony either if it does not retain the rights. “What did Ten Sports have for the last 10 years? They lived on WWE, the Champions League and some international cricket, but they survived,” said Vijay Bharadwaj, a sports management professional.
After acquiring Ten Sports from the Dubai-based Taj Group in 2006 for $107 million (approximately Rs 500 crore), Zee had reportedly suffered losses to the tune of Rs 600 crore to Rs 640 crore from its sports business, which was possibly the reason why the company decided to pass the network on to Sony. But the fact remains that Sony was happy to purchase Ten Sports. “Leave alone the rebranding. Buying Ten Sports itself was a signal that Sony is a serious player,” said Krishnamachar.
One of the advantages of not winning the IPL rights is that the network then has a significant budget to acquire other properties which will not be as expensive. The next five-year cycle of the IPL’s media rights is not going to go cheap. Sony had paid Rs 8,200 crore for 10 years, or Rs 820 crore ($127 million) per year, back in 2008. Experts are expecting the value to at least double to Rs 1,600 crore ($254 million) per year for the next cycle.
“Sony will take a hit if they lose the IPL, but it could also be an opportunity in the long run,” said Blah. “While the IPL is a huge property, it goes on for just 60 days a year at most. If Sony lose the IPL and win, the rights to, say, the English Premier League, which goes on for nine months in a year, it won’t give you the same kind of numbers as IPL, but it gives you sustained numbers over a period of time. So, it definitely won’t be the end of the road.”
Star Sports had bagged the English Premier League rights in 2013 for $145 million over three years, or just over $48 million per year, before renewing the deal in 2016 until the 2018-’19 season at an undisclosed amount. Assuming the rights value doubles for the next cycle to around $100 million per year, it’s still less than half of what the IPL media rights are expected to go for.