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Reliance’s acquisition spree to shift the paradigm of sports broadcasting

Viacom18 has the media rights of Serie A, La Liga and Ligue 1.

The multinational conglomerate company, Reliance Industries is one of the leading companies in India which has its foot imprinted throughout the vast country. The company has diversified its businesses in various sectors such as natural gas, retail, telecommunications, energy and textiles. The trusted Indian company now has decided to enter into the booming sector of sports broadcasting, it has also initiated the process through its subsidiary Network18. The Indian media company’s subsidiary TV18 owns a majority stake in Viacom18.

The Ministry of Information and Broadcasting (MIB) granted TV channel licenses to Viacom18 Media along with the Disney-owned Star India. Viacom18 is a joint venture entity between TV18 and ViacomCBS (American entertainment conglomerate). The two companies received four TV licenses each. If the venturing into the sports broadcasting sector is done through a TV channel then it will be done by Viacom18.

Reliance being a massive company with its gigantic reach and its outward pursuit of sports broadcasting will have a dwindling effect in the sports broadcasting sector. The regular players of the sector in India, Disney Star and Sony Sports Network will go through severe losses. The sports broadcasting giants will miss out on a golden opportunity of generating massive revenues through airing and streaming sports in the Indian subcontinent. Star and Sony won’t only miss out on the opportunity of earning money through broadcasting but also through sponsorship and advertising deals. The Indian Premier League’s media rights which are currently owned by Star is about to end in 2022, the BCCI is scheduled to release the media rights tender later this year or early next year. Reliance is reportedly planning to bid for the marquee Indian T20 league through Reliance Jio or Viacom18, the Indian company will be competing against Star, Sony and Amazon in the bidding war for IPL’s rights. If the Mukesh Ambani-owned company Reliance bags the rights for IPL, the regular players Star and Sony will miss out on an estimated more than 3000 crore in ad revenue and about Rs 13-14 lakh for a 10-second slot. They will also miss out on the sponsorship packages for the co-sponsor slot which started around 170 crore in IPL 2021. “If Jio manages to win IPL media rights, the scale of the tournament will reach an unprecedented level. It will be a never-seen-before scale,” the source said, on the condition of anonymity.

As per industry estimates, Star Sports earned about Rs 2,600 crore in ad revenue through Hotstar during IPL 2020. The broadcaster charged Rs 13-14 lakh for a 10-second slot in IPL 14. According to sources, Star introduced several sponsorship packages starting from Rs 150-170 crore for a co-sponsor slot, while the associate sponsor deal was worth Rs 40-50 crore. The OTT platform had charged Rs 120-130 crore according to the reports for the slot of co-sponsor.

The regular players also won’t be able to lay their hands on the viewership, as per the data released by the Broadcast Audience Research Council (BARC) India, IPL 2020 clocked 400 billion viewing minutes which is the highest ever viewership in the history of the domestic league. The consumption increased by 23% than to the previous year, the television viewership acquired 31.57 million average impressions in 2020. According to the industry experts, it was speculated that the IPL 2021 viewership might dip as the offices have reopened again, but that won’t affect the ad and sponsorship deals.

Reliance’s successful run in sports broadcasting will definitely pave way for several other Indian media companies to enter the lucrative sector. This would make it difficult for foreign media companies to retain their dominance.

The Indian joint venture operation commenced its sports broadcasting rights acquisition with cricket. In 2018 they bought the rights of the tri-series, Nidahas Trophy which was played between India, Sri Lanka and Bangladesh. The series was aired on Rishtey Cineplex (now known as Colors Cineplex). The media rights of that tournament were also shared with Discovery Communications’ sports channel DSport. Vicaom18 also attained the media rights of the ‘Road Safety Series’, the cricket tournament that features legends and retired players like Sachin Tendulkar, Jonty Rhodes, Brian Lara, Yuvraj Singh and many more. In its latest acquisitions in cricket, the rights for the Abu Dhabi T10 League was also acquired by the company.

After entering into cricket and attaining success, Reliance’s venture into football was imminent. Earlier this year, Viacom18 acquired the broadcasting rights of La Liga in India. The Spanish league will be broadcasted on Viacom18’s channel MTV along with getting streamed on Jio Platforms and Voot in India. Following La Liga’s acquisition, the Indian media company also bought the rights for Serie A. Gourav Rakshit, COO of Viacom 18 said, “One of the core propositions of our network is the promise of variety in content. Sports is a whitespace that we have been consciously experimenting with for some time now. The response to our initiatives, thus far, has been very encouraging. Italian Serie A is one of the most exciting & competitive leagues in Europe and we are excited to bring it to our viewers across digital and broadcast platforms.”

In its latest acquisition, Viacom18 also purchased the rights for the French competition Ligue 1 in India. Reliance acquiring media rights of the major football competitions for the Indian subcontinent will see the traction of the Indian audience in huge numbers. The ongoing season of La Liga which made its debut on MTV on August 14 has been witnessing incredible response on TV. During its first week, the football competition registered 3X reach on MTV than the previous La Liga season, according to the network. As per the data by BARC, the average time spent per viewer (TSV) for the opening weekend was 7X bigger than the last season on TV. As per BARC, the viewership for the Spanish football competition was 38% from the rural areas while 51% came from the urban cities. The competition saw 28% of viewership coming from non-Hindi speaking markets (HSM).

Reliance’s biggest acquirement in its sports broadcasting portfolio is yet to take place. According to the reports, Viacom18 is in the active race of acquiring rights for the 2022 FIFA World Cup and is the number one contender to win the bidding race. The rights for hosting the upcoming FIFA World Cup was won by Qatar. With a population of two million, Qatar becomes the first Arab state to host the football world cup. An Asian country hosting the 2022 FIFA World Cup would be monetarily beneficial for Reliance, who is the favourite to win the media rights for the competition. India is just 2 hours and 30 minutes ahead of Qatar, without much time difference, Viacom18 will be receiving a massive active viewership during the football world cup.

The big players of the sports broadcasting arena

In 2018, Star India pipped Sony and Reliance Jio for bagging the media rights of India’s home series as well as domestic fixtures for the upcoming five years. Star had to pay a whopping amount of Rs 6138.1 crore for the lucrative deal, the agreement with BCCI will come to an end in 2023. In the previous bidding war, Reliance lost to Star, in the next media rights auction, the company backed by Ambani will enter with more experience in the broadcasting sector along with massive revenue to outbid other companies.

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