Indian Premier League Media Rights Face Stagnation Amid Changing Market Dynamics

The Indian Premier League (IPL) is entering a critical phase as projections indicate that the upcoming 2028–32 media rights cycle will plateau at $5.4 billion, mirroring the current 2023–27 period. This figure represents a 13% decline in value per match, decreasing from $13.2 million to $11.5 million. The report from Media Partners Asia (MPA) attributes this decline to the expanded format of 94 matches, which increases volume without a corresponding rise in value.

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The current media rights cycle saw a significant increase from the previous 2018–22 period, where Star India secured consolidated rights for $2.55 billion. The 2022 auction marked a pivotal moment, with rights split across packages for the first time. Viacom18, backed by Mukesh Ambani’s Reliance Industries, acquired digital rights for approximately $3 billion, while Disney retained television rights for $3.01 billion. However, the merger of Viacom18 and Disney’s Indian operations into JioHotstar has diminished competitive tension in the market, which previously fueled rapid growth.

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According to MPA, rights holders in the current cycle are facing cumulative losses estimated between $1.8 billion and $2 billion. Advertising revenue growth has slowed significantly, with a compound annual growth rate (CAGR) of 7% over the last three seasons, compared to 18% in the previous cycle. Factors contributing to this slowdown include policy-driven exits by ed-tech and real-money gaming companies, as well as a ban on crypto advertising by the Board of Control for Cricket in India (BCCI), which has narrowed the advertising base.

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At the franchise level, media rights now constitute 75% of total revenues, up from 48% in 2017. Despite EBITDA margins expanding from an average of 10% in the league’s first cycle to 34% currently, MPA warns that this operating leverage could amplify risks if rights values decline.

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Mihir Shah, vice president of India at MPA, emphasized that the upcoming rights reset will necessitate a shift in focus for franchise owners towards building non-media revenue streams, such as sponsorships and international presence. He cautioned that current franchise valuations may not accurately reflect the impending challenges posed by the rights cycle headwind.

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On the digital front, JioHotstar recently achieved over 70 million concurrent users during the ICC T20 World Cup finals, indicating potential for growth in viewership. However, the report highlights that the gap between streaming revenues and rights expenditures remains a significant constraint on future valuations.

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Critics have raised concerns regarding the sustainability of current franchise valuations, particularly in light of the declining per-match rights value and the concentration risk associated with the merged media rights platform. The reliance on a single revenue stream poses challenges for franchises that may struggle to diversify their income sources.

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• “marks the beginning of a period in which franchise value creation depends on building the non-media revenue base, focusing on sponsorship, international presence and digital monetisation.” — Mihir Shah, Vice President, Media Partners Asia

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• “the window at current multiples may be shorter than the market assumes.” — Mihir Shah, Vice President, Media Partners Asia

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As the IPL navigates these challenges, the focus will likely shift towards innovative strategies to enhance revenue beyond traditional media rights.

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