Cricket's Viewing and Advertising Revenues Hang in Balance Amid Reliance's Reported Acquisition Talks with Disney's Indian Business"
"Reports suggest that Mukesh Ambani's RIL might be on the brink of a substantial deal, acquiring Disney's India business, marking a potentially massive shift in India's entertainment landscape. This deal could hold immense consequences for the lucrative Indian cricket sphere, where Reliance's Viacom18 and Disney Star jointly possess rights worth approximately Rs 55,000 crore for major cricket events over the next 4-5 years.
The rights encompass crucial cricket properties like the Indian Premier League, International Cricket Council rights for both men's and women's global events, and India's bilateral matches spanning various formats. These rights extend across television and digital platforms, forming a significant part of the entertainment market.
The speculated agreement might involve Reliance acquiring either Disney Star's entire Indian business or solely its digital streaming segment. Disney's India business comprises the prominent streaming platform Disney+ Hotstar, a substantial linear TV section with over 70 channels in eight languages, and a thriving film studio. Meanwhile, Reliance's broadcast arm, Viacom18, boasts ownership of 38 TV channels in eight languages, the JioCinema video OTT app, and Viacom18 Studios.
If Reliance opts solely for the streaming business, it would mean the acquisition of World Cup digital rights, further expanding their portfolio. However, should they acquire both linear TV and digital operations, except for specific international tournaments and World Cup TV rights (anticipated to be acquired by Zee-Sony if their merger is finalized), almost all cricketing properties would fall under the RIL-Disney Star alliance, according to Karan Taurani, Senior Analyst and Vice President at brokerage firm Elara Capital.
Taurani expresses concern that in such a scenario, a monopoly would be established, controlling roughly 80-90% of the potential cricket advertisement revenues. This dominance would allow them to command premium rates from advertisers and potentially restrict access to cricket content by placing it behind a paywall. He estimates that cricket alone generates an ad revenue of Rs 9,000-Rs 10,000 crore across TV and digital platforms, constituting a significant portion (one-tenth) of India's Rs 1 lakh crore advertising market.
The necessity for the deal arises from reports indicating Disney's intent to divest its Indian business as part of a global cost restructuring initiative. Initially, options such as selling off or establishing a joint venture for the India business were considered. However, no official confirmation of any deal has been made.
Viacom18 currently possesses the IPL digital streaming rights and both TV and digital rights for India's bilateral matches across T20I, ODI, and Test formats in men's and women's cricket. To attract more viewers to its platform, Viacom18 streamed the 2023 edition of the IPL cricket tournament for free on the JioCinema app, available across various telecom networks.
Disney Star, on the other hand, holds the IPL TV rights and ICC digital rights, with plans to sub-license ICC TV rights to Zee Entertainment Enterprises Limited (ZEEL). Despite the announcement of this distinctive deal in August 2022, it is yet to materialize, even as Zee and Sony Pictures Networks India (SPNI) navigate a proposed merger. Additionally, Disney Star streamed the recently concluded cricket world cup for free on its Disney+ Hotstar streaming app in a bid to compete with Jio Cinema.
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