Amazon Pulls Out Of The Race; Reliance In It

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IPL Media Rights: Amazon pulled out of the competition for the Indian Premier League media rights despite having purchased the bid document. On Friday, the technical assessment of the bidders was carried out in Mumbai. However, Amazon was not present for the event.

Amazon currently has a large foothold in India thanks to its e-commerce operation. It was known that the company was giving serious thought to the idea of submitting a bid for digital rights to the Indian Premier League. The much-anticipated face-off between two of the world’s wealthiest men, Jeff Bezos and Mukesh Ambani, for IPL eyeballs, became a non-starter when the American multinational business with a market worth of $1.181 trillion decided not to bid for the rights to broadcast the Indian Premier League. Aside from the sport of cricket, Amazon and Reliance have been engaged in a heated competition for the purchase of Future Group.

What’s the story?

Viacom 18, which is owned by Reliance, is anticipated to make a competitive offer. “It is very evident that we do not lack the necessary reserves. Amazon did not perceive sufficient value in the direction that the bidding wars would have led them. If they participated in the auction to reach a certain price threshold, there is a good likelihood that they would end up in second place. They would have preferred to steer clear of that situation,” an industry executive said.

The absence of Amazon will result in a reduced level of competition for digital rights, which may lead to a decrease in value within that category. Google, like Amazon, had bought the bid paperwork. But, unlike Amazon, Google did not proceed with the offer. In Reliance Jio, Google has a 7.73 percent ownership in the company. As a result of reevaluating its approach to living streaming sport, Meta (Facebook), which had placed the largest digital offer in the last rights cycle at Rs. 3,900 crore, did not indicate any interest in participating in this round of bidding.

All of this also enhances the likelihood of a single media conglomerate going all out for both TV and internet rights, similar to what Star did in the last round. This time around, there is no unified bid category, which means that each media firm will have to win distinct categories (TV, digital, and non-exclusive digital) in order. All of the companies that are anticipated to compete in the television category, including Star, Viacom 18, Sony, and Zee (provided that they pass the technical test), will also be in the race for the digital category.

The choice made by Amazon did not shake the confidence of BCCI executives. They have been emphasizing that linear television would continue to be the primary factor in determining values, at least for the future rights cycle. “Over-the-top (OTT) services are going to be the norm as soon as connection and capacity improve. However, the kind of last-mile connection that is required to enjoy the property via OTT would still take some time to implement. As a fan, even at this point, I would prefer to see it on traditional television. We think that linear television still has a significant commercial presence in India,” Arun Dhumal, the treasurer of the BCCI, said on Tuesday that linear would play a significant part in the current auction.

The starting price for TV rights is substantially higher than the starting price for digital rights, which is set at 33 crores each match. The starting price for TV rights is 49 crores per match.

What’s next for the IPL Media Rights?

It was a foregone conclusion that a property that was increasing in value and profitable for the players would occupy more days in the international calendar at some point in the future. It is seeming more and more probable that the Indian Premier League would expand to a full-fledged 10-team competition with 94 games played in a home-and-away format beginning in 2027.

The BCCI has not made any commitments. But bidders have been instructed to plan for a total of 410 matches rather than 370 for the cycle that will take place between 2023 and 2027. While there will be 74 matches played over the course of the next two years, much like this year, it is anticipated that the extra 40 matches will be played between the years 2025 and 2027. Between 2025–2026, there will be 84 matches, which would need a different method for scheduling the games. When it comes to bidding, if a season has 84 matches, the number of matches that are included in the non-exclusive bundle (opening match, playoffs including the final, and evening matches of double headers) increases from 18 to 20 matches. This is because the non-exclusive bundle includes the opening match, playoffs including the final, and evening matches of doubleheaders. The non-exclusive package will consist of 22 matches if there are 94 games.

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