BCCI hails role of new tender process in IPL’s Star deal

Board of Control for Cricket in India chief executive Rahul Johri has hailed the role of the governing body’s new tendering strategy in securing the Indian Premier League’s lucrative rights deal with Star India, while the pay-television broadcaster’s chief executive, Uday Shankar, has maintained it has not overpaid for the contract.

Star yesterday (Monday) ousted Sony Pictures Network India as the main rights-holder to the IPL after securing the global television and digital rights to the Twenty20 competition.

Under an agreement with the BCCI, Star has paid Rs164.375bn (€2.17bn/$2.56bn) for all rights packages on offer across the five editions of the IPL, from 2018 to 2022.

Johri has admitted that the due-diligence process originally recommended by the Lodha Committee, which was formed to drive reform in the BCCI, and subsequently followed by the Committee of Administrators has created a healthy environment that attracted a variety of bidders to the table.

The Star deal comes on the back of two major sponsorship contracts sealed by the BCCI in recent months. In June, Chinese mobile handset manufacturer Vivo agreed to pay a huge increase to retain its title sponsorship rights for the IPL.

Vivo, which has served as the title sponsor for the past two editions of the tournament, will pay a total of Rs21.99bn over five years, from 2018 to 2022. The figure, which equates to just under Rs4.4bn per season, marks a 554-per-cent increase on Vivo’s previous deal for the IPL and a 267-per-cent premium on the base price set by the BCCI.

In March, the BCCI sealed a similarly lucrative deal with the Indian division of Chinese smartphone manufacturer Oppo, which was named as the new main sponsor of India’s national team. Oppo’s five-year deal with the BCCI began in April and will run until 2022.

Johri told the ESPNcricinfo website: “In business if you have accountability, transparency and stability, that translates into numbers. And that is what has happened. These three tenders have happened under the CoA's watch.”

Johri also pointed to the decision to change the contract duration from the previous 10 years, for the rights cycle that ended with this year’s IPL, to five-year terms. Referring to the domestic digital rights tender, for which Facebook, Airtel and Reliance Jio all entered ultimately unsuccessful bids in excess of Rs30bn, Johri added: “You saw the excitement in digital and who knows five years from now where digital will be… It absolutely justifies (reducing the rights term).

“Companies plan for five years. I don't know of many companies that plan for 10 years. There is accuracy in those (five-year) plans. These are all board-level decision companies have to take. Even the bidders have accountability, they can't just put up an arbitrary number. There are processes. So keeping it for five years works well.”

The BCCI had been forced to abort the tender process on a number of occasions but released a fresh invitation to tender on July 21. The ITT attracted interest from 24 parties for the seven categories of television rights in India, digital rights in India, and combined television and digital rights for the US, Europe, Middle East, Africa and the rest of the world.

Ultimately, 14 bidders were present at Monday’s auction, which saw Star emerge victorious with its all-encompassing offer trumping the individual bids on the table. Questioned on the value of its deal, Shankar told Indian newspaper the Economic Times: “You have to look it in the right context. Don't compare it with what people paid for IPL 10 years ago, when T20 itself was untested and new.

“Now for 10 years, IPL has delivered year-on-year. Look at the price at which ICC (International Cricket Council) rights have gone, or even BCCI rights; that too more than five years ago. We are paying Rs43 crore (Rs430m) for BCCI Test matches (2012-2018). If you compare it to that, this is not an insane bid.”