scorecardZee and Sun TV might not have won IPL media mandates but here’s how they will benefit from the IPL auction
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Zee and Sun TV might not have won IPL media mandates but here’s how they will benefit from the IPL auction

Zee and Sun TV might not have won IPL media mandates but here’s how they will benefit from the IPL auction
Business2 min read
ZEE5 and Sun TV
  • IPL media rights saw its final round of bidding yesterday and have been auctioned for ₹484 crore (US$6.2bn) for the period 2023-2027.
  • Star has retained the linear broadcast rights, Viacom18 has bagged the digital rights.
  • The owner of franchise SunRisers Hyderabad, Sun TV Network, will also get a big cut in profits from BCCL as IPL’s overall value jumps by 3x.
  • ZeeL is also likely to benefit from losing the international mandate.
Mukesh Ambani’s Viacom18 and Disney+Star are not the only two media conglomerates to benefit from the recent auction of the Indian Premier League’s media rights.

Media channel Sun TV Network and Zee Entertainment Enterprises Ltd (ZeeL) might be two indirect beneficiaries of the recently-concluded IPL media rights auctions.

Sun TV to get a bigger share in profits from BCCL
Sun TV owns the IPL franchise Sunrisers Hyderabad (SRH). The media network had earned ₹175.55 crore in IPL revenues for H1 ended September 2021.
Sun TV Networks 01_01_22 to 15_06_22.
BSE

After the latest auction, IPL value has jumped by 3x to ₹48,000 crore, which means franchises will get a bigger cut in profits from the Board of Control for Cricket in India (BCCI).

IPL franchises earn from brand sponsorships, prize money, ticket and merchandise sales and get a guaranteed 50% revenue share from IPL’s central contract revenue pool.

As per financial advisory firm Elara Capital, all IPL teams will see their revenue jump by 2x after the auction and SRH’s revenue is expected to grow by a compound annual growth rate (CAGR) of 16.1%.
Sunrisers revenue
Elara Securities

When losers are the real winners

Media conglomerate Zee Entertainment and Sony had their eyes set on package D of IPL media rights bundles as Zee has a strong network of subscribers outside of India. The bundle included digital and broadcasting rights of a few international markets.

However, Zee lost the mandate to Times Network and Viacom18. Package D was sold for a total price of ₹1,058 crore.

According to a report by Elara Capital, Zee might actually benefit from losing out on the mandate this time.

The report explains, “Star and Hotstar financials suggest that winning the broadcast rights in the previous cycle does not seem to have had a material positive impact on profitability. Not winning the rights to these elevated values, therefore, is a positive for Zee, in our view.”

Zee-Sony’s earnings would have taken a huge hit due to hefty content costs if it had won IPL rights.
OTT maus
Elara Securities Research

Zee5 and SonyLIV are currently ahead of Viacom18’s Voot in terms of monthly active users (MAUs).

After winning IPL digital rights, the tables might turn and Voot or the Jio platform might add more subscribers and MAUs.

Currently, both digital platforms SonyLIV and Zee5 would have to bring their A-game to the forefront to win new consumers and maintain their MAUs growth.

“Zee5 and SonyLIV may have to accomplish immense leg work on the OTT side In terms of user experience, large-scale content and distribution -- in order to emerge a winner and scale-up in the highly fragmented Indian OTT market. We maintain BUY on Zee Entertainment Enterprises propelled by the merger with Sony that should drive potential synergies, both for the TV and digital businesses,” the report said.

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