For the first time, IPL’s enterprise value drops 11.7% to $9.9 billion | Personal Finance

According to the report, compared to the last edition, the IPL ecosystem value has fallen from Rs 92,500 crore to Rs 82,700 crore, marking a decrease of around 10.6%. In USD terms, this translates to a decline from $11.2 billion to $9.9 billion, representing a decrease of approximately 11.7%. This downturn comes despite the league’s unyielding allure, which continues to attract audiences across television and digital platforms.

Factors Affecting Media Rights Valuation:

• 
  Failed Merger: The failed merger between Zee and Sony has impacted market dynamics.
• 
  Monopolistic Control: The merger of Reliance-owned Network18 and Disney-owned Star India has created a dominant player in the media landscape.
• 
  Delayed Entry of Tech Giants: The absence of major tech players like Amazon, Meta, and Apple in the IPL media rights arena has limited competition.

 “We anticipate certain demand- side constraints in the next IPL media rights cycle auction due to a decrease in number of  potential bidders. Several significant developments from the past year have led us to revise our media rights value estimates,” said Santosh N, Managing Partner of D & P Advisory.

The study by D&P Advisory suggests that the upcoming IPL media rights auction might not be as competitive as expected, potentially leading to lower overall revenue for the league. Here’s a breakdown of the key points:

The merger of Reliance owned Network18 and Disney-owned Star India has essentially created monopolistic control. First, the failed merger  between Zee and Sony (which was expected to go through as of the last valuation) has impacted market dynamics. The combined entity would have had a stronger position in bidding for IPL broadcasting rights in the future and would have given a strong  competition to Disney and Jio to acquire the rights, making it a three-horse race as against the current two-horse race. However, with the merger off  the table, each of these two players would struggle to be serious contenders for the media rights, particularly the digital segment. 

Compounding this issue  is the consolidation of  broadcasting power. The merger of Reliance-owned Network18 and Disney-owned  Star India has essentially  created  monopolistic  control over television and  digital broadcasting.  

 Santosh N, from D&P Advisory, expects fewer companies to actively participate in the bidding. This could lead to a situation where broadcasters are more cautious with their bids, resulting in lower overall revenue for the IPL.

The  expected delay in the entry of major technology players such as Amazon, Meta, and Apple into  the IPL media rights arena  exacerbates the situation.  Although these tech giants  have made inroads into other sports leagues like the NFL, NBA, and EPL, the unique monetization challenges of  the Indian market and IPL’s reliance on advertising and subscription models pose significant hurdles.  If tech giants enter into the IPL broadcasting arena, it could further revolutionize sports media in India, as they leverage their digital infrastructure to enhance viewing experience and innovate on content delivery.

 “The days of escalating bid prices driven by fierce competition may be behind us, casting  shadow over the future growth trajectory of IPL’s media rights valuation. Despite a substantial growth opportunity for digital platforms, the pivotal question remains: will market forces generate sufficient competition to drive up the per-match value of IPL rights?” said Santosh. 

Overall, the IPL and WPL are well-positioned to capitalize on the growing digital landscape and continue to attract significant investments and viewership. 

First Published: Sep 04 2024 | 8:50 AM IST