IPL ad costs could help boost other sports

The merger between Reliance and Disney has the potential to reshape India’s sports media landscape, as the flagship IPL tournament becomes the preserve of the biggest advertisers, while smaller advertisers turn to emerging sports.

What’s happening 

• Last month’s announcement of an $8.5bn tie-up between the two companies finally ended speculation that Disney was set to leave India.
• The joint venture brings together the sporting rights of the separate entities so that it controls 70-80% of the country’s cricket content (as well as the IPL this includes WPL, ICC and BCCI media rights).
• Cricket itself hoovers up more than 85% of total sports industry spending across media, sponsorship and endorsement. 
• “This development underscores the IPL’s towering influence on media consolidation and its burgeoning role in shaping the future of sports broadcasting and advertising in India,” says Daoud Jackson, senior analyst for Media and Entertainment at advisory business Omdia. 
• The IPL has global ambitions and team owners are involved in new T20 franchises in the Middle East, South Africa and the US. 

What it means for advertising 

• With IPL media rights costing around $1.2bn annually, rights holders Reliance and Disney will seek to recoup this cost primarily through advertising and sponsorship, rather than subscription revenue. 
• There are signs that 2024 will be a record year for advertising around the event, according to Omdia, with more games than ever before, increased commercial confidence across the country and broadcasters announcing new ways to drive revenue.
• Observers anticipate IPL and Cricket World Cup ad rates rising due to a monopoly effect, possibly to the point where only large advertisers can afford to be associated with these tournaments. 
• Advertisers with smaller budgets seeking a sports audience are likely to invest in non-cricket sports, such as football or kabaddi, which are widening their audience base. 

Sourced from afaqs!, Omdia

[Image: IPL]