IPL media rights may soar up to 4x; these names to benefit the most

New Delhi: Brokerage Elara Capital expects media rights for the Indian Premier League (IPL) to soar up to three to four times to Rs about 50,000-60,000 crore in the next cycle - which is 2023-2028.

This would be an astounding growth for the world's biggest and cash-rich T20 league, whose broadcasting rights were sold for Rs 16,300 crore in the previous cycle (2018-2022).

The brokerage expects T20 leagues' annual media rights to hit Rs 10,000 crore-mark, which was Rs 3,220 crore in the last cycle and Rs 820 crore in the first cycle.

In the new season, IPL will host 94 matches, spanning over 10-11 weeks. All 10 teams will play a round-robin tournament, facing each other twice and four matches for playoffs.

The fifteenth edition of IPL concluded two weeks ago where debutants Gujarat Titan clinched the title after defeating Rajasthan Royals. The other debutant, Lucknow Supergiant, made their way to the playoffs.

According to Elara Capital, digital rights are likely to command the most premiums, close to 100 per cent over the current base price, whereas TV rights will command a 40 per cent premium.

The brokerage firm expects 6 per cent annualised growth in revenue for the TV rights owner and 35 per cent annualised sales growth for digital rights owners for IPL matches over the next five years.

"This in turn should massively bolster India's sports media rights market. IPL’s share may grow to 74 per cent from 54 per cent currently, reviving its importance," the brokerage said.

IPL rights renewal should yield the biggest delta for SunTV – the owner of Sunrisers Hyderabad (SRH) – as SRH’s valuation may spike the most, even as the contribution to the future market cap may look skewed, the report said.

Mumbai Indians (MI) and Royal Challengers Bangalore (RCB) may contribute 0.7 per cent and 15.5 per cent to their owners Reliance Industries (RIL) and United Spirits (USL) market caps, respectively. However, Chennai Super Kings (CSK) is likely to emerge as the biggest beneficiary.

Karan Taurani, Sr Vice President, Elara Capital said CSK is one of the most successful teams in IPL with strong revenue growth and healthy EBIT margins. "They have a robust fan following and brand value, attracting merchandise sales."

Though, he warned about the potential decline in sponsorship and endorsement revenue, when MS Dhoni hangs his boots. "This is the only near term challenge for the franchise, else other pointers are not a hurdle for them," said Taurani.

Chennai Super Kings is a multibagger counter, actively traded in the unlisted space. The scrip, after demerging from India Cements in November 2018, zoomed to Rs 240 during the latest season from merely Rs 12-15 in less than four years.

Commenting on CSK, Dinesh Gupta, co-founder, UnlistedZone said the stock has corrected to the Rs 180-level for now but the sale of media and broadcasting rights would be a major trigger for the South India-based franchise.

"Given valuations of two new franchises and CSK's sound track record with solid profit growth, it won't be a surprise it becomes India's first-ever sports unicorn," he added.

According to Elara's Karan Taurani, IPL can be a blessing in disguise for another company - Paytm, only if it has the exclusive rights to sell tickets for the next editions of the T20 league.

"Paytm will be able to leverage upon the increased number of users to other sectors as well from paying bills to other transactions," he added. "If there is exclusivity in the ticket selling, Paytm will be able to acquire more customers."



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