Star India bags IPL media rights for Rs 16,347.50 crore: Logic can't explain massive sum splashed out for league

You could hear a collective gasp around the world and see many jaws dropping in astonishment when it was announced that the Indian Premier League media rights for the next five years had been sold to Star India, with its all-or-bust strategy, for a whopping Rs 16,347.50 crore. Others went about their business, making it appear routine for them to be clinching such massive deals. Yet, others were untouched by the happenings in Mumbai. But it will not be long before the mega deal starts drawing from everyone who subscribes to the Star India network, either via satellite dish or cable. The net would be cast wider, even those who use the Hotstar app on their mobile phones will chip in for Star India to be able to pay BCCI Rs 3,269.50 crore a year for IPL. Indeed, as an industry, IPL appears to be blessed with a reservoir of endless funding, defying expectations each time money matters have come in focus. It is the offshoot that has outgrown the Board of Control for Cricket in India and threatens to find a wind of its own for its wings, what with many state associations unlikely to have access to the kind of money a franchisee will have. There will be quite a few licking their fingers, anticipating a bountiful IPL season in 2018. IPL teams (read franchises), successful and beleaguered, entrenched and those returning from suspension, can all expect to get more from the central pool. Therefore, players and support staff will also expect better wages — except in the unlikely event of the IPL Governing Council increasing the salary cap only marginally in the coming years. State Associations which host IPL games will be anticipating greater returns; other State units may start clamouring for a share from the IPL pie, too. Yes, everyone who has something to do with IPL will be hoping to be blessed with some extra largesse from the coming season. The refrain will be simple: all said and done, media rights have fetched twice as much as in the previous years. Meanwhile, officials of other sports can only watch with envy and, perhaps some dismay, as IPL continues its unstoppable journey, mopping up top dollar. They need to stop scratching their heads in disbelief and act if they are to survive the onslaught. IPL’s astronomical rights figures, added to repatriation to overseas football leagues, will cause deeper furrows in their brows. Yet, before organisers of other sport complain that the market has little money for them, it will help to remember that while the six-week Twenty20 tournament will rake in Rs 3,269 crore a year from the broadcasting giant, the rest of Indian cricket calendar brings in only around a fifth of that amount from the same media company. It is easy to attribute the skyrocketing valuation to the times we live in — the Indian cricket team has delivered consistent results and IPL has offered entertainment to even those who do not understand the nuances of the game — but there is no apparent logical explanation to the manner in which these valuations are made. But then, there has been little about IPL that falls in that realm. It has always defied commercial logic — recession was rampant around the world in 2009 but didn’t seem to affect IPL; DLF backed off as title sponsor after paying Rs 200 crore over five years but Pepsi came on board at Rs 396.8 crore for five years; it ended the contract two years prematurely after paying close to Rs 240 crore in three years. Vivo stepped in as title sponsor at an estimated Rs 100 crore a year for two years but changed the game when it offered to pump in a whopping Rs 2199 crore over five seasons in 2018. That was the first indication of the already powerful but growing attraction that IPL held to the corporate world. The broadcast rights were expected to rise manifold as well. But this could well be IPL’s ultimate challenge. Having survived without the talented, if mercurial, Pakistani cricketers, a match-fixing scandal, the comings and goings of some franchisees and a season and a half of having to be staged overseas, it has shown the capacity to be remain a strong property. Yet, the time may be at hand when the fan will end up making a statement. The quality of cricket has remained more or less the same, a few new names may have surfaced but the crowds are still drawn by many who have been playing since the inception of IPL. It is the teams’ inadequate connect with fans that can determine whether Star India will hit paydirt with its gamble to go big with the overall numbers on offer for media rights for IPL. How much can an elastic band be stretched without snapping? Who will bear the burden of the massive bid? It will be the fans who will fund this dream — by subscriptions to TV stations beaming the matches through satellite dish or even old-fashioned cable and on the mobile platform. Will Star India’s punt costing Rs 16,347.50 crore over five years come good? Or will the cricket fans finally see how their passion is being milked dry at all levels and start behaving like well-informed consumers in the market by showing signs of firmly putting their feet down? The answers may not be available immediately but the process will be worth tracking.