Minutes after Star India was announced as the winner of the Indian Premier League (IPL) media rights for the next five seasons on Monday, employees of the network were already feeling the pressure. To drive sales, with new, revised targets coming very soon. Whatever math Star India must have done to win these rights, across digital and television, for India and rest of the world, the total amount it has paid is eye-popping. At $2.55 billion. Or a massive Rs 16,347.5 crore. Or Rs 54.5 crore per IPL match.
As it turns out, Star India’s bid was approximately Rs 527.99 crore (or 3.3%) higher than the sum of all winning bids in individual categories (Rs 15,819.51 crore). It was that close. “All it needed was, for two companies like, say, Facebook or Reliance Jio to have submitted Rs 250 crore each as part of their individual bids,” says a media and entertainment analyst with a top four consulting company, on a condition of anonymity because he’s not authorised to speak with the media. “It could’ve been too close to call.” (In these auctions, there are two types of bids: an overall or global bid and a ‘sum of parts’ bid where there are winners for each of the categories on offer. The cumulative value of that bid, if higher than the overall bid, is deemed the winner in such cases.)
It’s apparent this is Star India CEO Uday Shankar’s high-stakes poker moment. Something the legendary poker professional Doyle Brunson would’ve been proud of. He played all or nothing. And took everything away. Cleaned the table. The poker analogy holds up, only some distance though. Only for the winning day. The difficult part starts now. But first, the winning day.
How they pulled it off
It is no secret that Star India has been eyeing this day for a long, long time. Insiders say that the company spent around two to three months prepping for this bid amid close interactions with analysts, both in India and abroad. All this to arrive at a number, a number they could assign as the value of these rights. “They were obviously monitoring events around the IPL, the BCCI [the Board of Control for Cricket in India], the brand value and everything else [controversies] that has been going on in the background, and internally, there was a belief that this would eventually come down to a figure between $2.5 billion and $2.7 billion,” says a Mumbai-based media professional, on a strict condition of anonymity. “Star felt that while the combined India + ROW [rest of the world] TV rights was not more than Rs 10,000-11,000 crore, and that digital rights [global] were somewhere around Rs 4,000-5,000 crore and tipped it over in their actual bid.”
Star’s strategy was simple: throw everything at the global bid.