IPL Valuation Dips By 10.6% As Media Rights Uncertainty Grows

The Indian Premier League (IPL) ecosystem experienced its first-ever decline in valuation, as reported by D&P Advisory. The report indicates a 10.6 per cent decrease in value, dropping from Rs 92,500 crore to Rs 82,700 crore which translates to a decline from $11.2 billion to $USD 9.9 billion(approximately 11.7 per cent). Despite the league's ongoing popularity on television and digital platforms, the decline is mainly due to a reassessment of media rights values.

Shift on IPL Valuation
D&P Advisory notes that the previous valuation had accounted for expected growth from the upcoming media rights renewal. However, a major shift occurred in 2022 when the Board of Control for Cricket in India (BCCI) secured both TV and digital rights for the 2023-2027 cycle. While this development elevated the IPL to the position of the second-richest league per match, it also influenced the competitive landscape. The intense rivalry between Jio and Disney for digital rights, once viewed as a positive indicator is now clouded by uncertainty.

Monopolistic Control
The report underscores several factors affecting the upcoming media rights auction including the failed Zee-Sony merger, media industry consolidation and the delayed entry of tech giants into the bidding process.

"The failed merger between Zee and Sony, which was expected to go through as of the last valuation has impacted market dynamics. The combine 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," the report said.

"However, with the merger off the table, each of these two players would struggle to be serious contender for the media rights, particularly the digital segment. Compounding this issue is the consolidation of broadcasting power. The merger of reliance-owned Network 18 and Disney-owned Star India has essentially created monopolistic control over television and digital broadcasting," it added.

According to D&P Advisory, the reduced competition in the IPL media rights arena has missed the aggressive bidding that historically drove up media rights values. The anticipated delay in the entry of major tech players like Apple, Amazon and Meta into the IPL media rights market further complicates the situation.

Shift Towards Conservative Media Rights Valuations?
D&P Advisory suggests that the diminished competition may lead to a more cautious approach in future IPL media rights auctions. The era of skyrocketing prices fueled by intense bidding wars could be coming to an end, raising concerns about the future trajectory of IPL media rights valuations.

This report casts uncertainty over the future of the IPL ecosystem. While the league’s popularity remains robust, the evolving media landscape and industry consolidation present significant challenges to its continued growth. The question now is whether the IPL can sustain its status as a global sporting powerhouse amid these shifting market dynamics.