By permitting consortiums to participate in its bilateral media rights auction, the Board of Control for Cricket in India (BCCI) has undertaken a significant policy move. This decision could prove shot in the arm of Sony and Zee network who are actively planning for a merger since long.
This policy change is also a departure from BCCI’s previous stance, in which consortiums (a collaborative group of multiple businesses or banks working together to achieve a common goal) were not permitted to participate in media rights bidding. The Indian board even barred consortiums from the Indian Premier League (IPL) media rights auction last year.
While the immediate reason for this policy change is unknown, it appears to advantage Sony Pictures Network India and Essel Group (Zee Network), which have been actively negotiating a merger. In business terms, the regulatory modification allows two media companies to form a unified front.
This strategic action appears to be well-planned at first glance. Sony and Zee’s combined resources might create a strong corporation, potentially increasing the value of media rights. Both firms have strong linear and digital presences, posing a stiff challenge to Viacom 18 and Disney Star. This benefit may be less obvious if they pursue separate routes.
Over the last few years, India Inc has paid close attention to the long-awaited merger of Sony and Zed. However, the final approval has been hampered by a number of legal squabbles. According to the most recent update, the unification should be completed by October 1. It is unclear whether they will establish a consortium, but according to the ITT, the BCCI will not object.
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Aside from these developments, the BCCI’s Invitation to Tender (ITT) issued on Thursday (October 3) stipulates three crucial dates. The auction is set to end on August 31, with questions to the BCCI welcomed until August 16. Bids for technical assessments must be received by August 28, two days before the auction.
According to the BCCI, participating enterprises must ensure that their incremental offers total at least Rs 1 crore. In essence, companies bidding for the two packages – India subcontinent linear rights and India subcontinent digital rights, as well as worldwide TV and digital rights – must raise their offers by Rs 1 crore combined.
A bid of Rs 25 lakh in Package A and Rs 75 lakh in Package B, for example, would meet this condition as long as the total exceeds Rs 1 crore. Even if a corporation only bids on one package, the incremental bid must still be Rs 1 crore.
As previously stated, the upcoming five-year cycle, which will begin in September 2023, will include 88 games. The base price for linear rights is Rs 20 crore, while the base price for digital rights is Rs 25 crore. The BCCI has warned that if the total value does not reach Rs 60 crore (about Rs 5200 crore), the entire procedure may be revisited.
Furthermore, the winning firm or companies must assure provision of commentary in five languages, including English and Hindi, with the choice of the three remaining regional languages left to the discretion of the broadcaster.
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