Zee’s move to acquire the TV rights to the ICC event (2024-27) for $1.4 billion to $1.5 billion is due to (1) sports broadcasts being less susceptible to OTT disruptions and (2) a portfolio approach. It supports the emerging view that (entertainment + sports) is important to ensure safety. core television business. Sports broadcasts are generally not profitable, and given the rapid content inflation and the move from his TV to his OTT, this is unlikely to change. So I don’t fully appreciate/understand Zee’s decision to invest more in sports TV rights (I would have preferred a higher investment in OTT). Separately, CCI has raised several questions that could delay his Sony-Zee merger.
Zee acquires exclusive TV rights to ICC men’s cricket event (2024-27)
Zee entered into a licensing agreement with Disney Stars for this purpose. Recently, the Disney star won the TV and digital rights to his ICC cricket event (Indian market for 2024-27). According to media reports, the Disney star acquired TV and streaming rights for about $3.1 billion, and TV rights to Zee for about $1.4 billion to $1.5 billion (an IPL-like TV/digital rights deal). meaning that the values are about the same). $3.1 billion in ICC media rights in 2024-27 (4 years; Indian subcontinent) versus $2 billion in 2016-23 (8 years; global media rights) is 15% + 8 years Note that it means CAGR (dollar conversion). For IPL media rights, the five-year CAGR is 24% in terms of INR (Rs 163 billion in 2018-22 versus Rs 484 billion in 2023-27). Such a sharp increase in the cost of cricket rights could lead to (1) increased sports losses/lower profitability for OTT/TV players and/or (2) pressure on entertainment advertising on television. there is.
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Trading involves risk
Men’s World Cup 2027 (The most valuable ICC properties are five years away, and TV monetization will depend on the pace of the shift from TV to digital over the next five years.
Time zone risk — The Men’s T20 World Cup (2024) will be held in the United States and the West Indies, which could favor a streaming platform (Hotstar) over TV.
Risk associated with India’s performance — Semi-Final/Final spot yield (advertised rate) is a function of the progress of the Indian cricket team.
Currency risk — ICC contracts are denominated in dollars and if the rupee depreciates, the actual payout in INR may be higher.
Streaming and TV viewership ratios for major ICC events are somewhat impacted by differences in Hotstar production quality and subscription pricing.
Regulatory Risk — Domestic subscription revenue from cricket facilities is limited by TRAI regulations.
The IPL’s advertising revenue potential is far superior to the ICC cricket event. Star TV is expected to push significant increases in advertising rates from next his IPL season to pass inflation on his cost of content to advertisers. Ongoing liquidity pressure will weigh heavily on the startup ecosystem (primary advertisers).
It remains to be seen whether the ICC event will be able to maintain its fair share on TV against the IPL, or whether the latter will get a disproportionate share.
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