Jeff Bezos and Mukesh Ambani are Expected to fight over $7.7 Billion in Cricket Rights

According to those acquainted with the situation, the tycoons are drafting aggressive game plans to assure victory.

Two of the world’s wealthiest men, Jeff Bezos and Mukesh Ambani, are about to duel once more. This time, the battle is over media rights to cricket’s Super Bowl, one of the fastest-growing sporting events in the world, with 600 million spectators and a brand worth of about $6 billion.

The billionaires’ companies are expected to be the top two bidders at an Indian Premier League auction on June 12th, which is expected to attract a number of bidders for separate five-year telecasting and internet streaming rights in various geographies. According to those acquainted with the situation, the tycoons are drafting aggressive game plans to assure victory. Walt Disney Co., which had the rights until last year’s just-ended season, and Sony Group Corp. are two other formidable competitors.

For the two first-timers, there’s a lot more on the line than just becoming the most powerful media player in a country of 1.4 billion people. In the former British colony, the English sport has a cult-like following. Both Ambani’s Reliance Industries Ltd. and Bezos’s Inc. are wagering that the game will help them achieve their ultimate goal: dominating an increasingly online Indian consumer market.

Jeff Bezos and Mukesh Ambani
Jeff Bezos and Mukesh Ambani

“The bidding will represent a gamble on India’s story over the next decade,” said Karan Taurani, a media analyst at Mumbai-based Elara Capital. “Bidders are betting that data-hungry Indians will control the fortunes of every industry, from retail to banking, and from travel to education.”

According to people familiar with the situation, Ambani, 65, has been identifying and hiring seasoned leaders for the role since mid-2021. Anil Jayaraj and Gulshan Verma, who helped 21st Century Fox Inc. seal the previous acquisition in 2017, are among them.

According to those familiar with the situation, Reliance’s war room also includes Ambani’s loyal lieutenant Manoj Modi and his older son Akash Ambani. A recent partnership with Uday Shankar, the former chief of Fox’s and later Disney’s India and Asia Pacific divisions, will give the team even more heft.

According to a separate group of insiders who asked not to be identified because they were discussing internal deliberations, Amazon, which has chosen IPL as one of a half-dozen global sports franchises it is interested in, is similarly motivated to win.

One guy stated that the thinking is against being conservative. The retail behemoth has spent hundreds of millions of dollars on European soccer rights, as well as a $1 billion-per-season deal to broadcast Thursday Night Football in the United States until 2033.

Hotstar Disney+

Disney is flying top executives from its Burbank, California headquarters to Mumbai for the auction, according to people familiar with the situation. Disney needs to decide how much it’s willing to pay. If the US entertainment behemoth fails to keep the rights it received three years ago from Fox’s $71 billion acquisition, it stands to lose a lot of money. Hotstar, a popular streaming service among cricket fans, was included in the deal, giving Disney’s relatively new presence in the Indian market an immediate boost.

The Disney+ streaming service has 138 million paid customers worldwide, with Disney+ Hotstar accounting for more than a third of those. In the quarter ending April 2, Disney+ added 7.9 million new customers, while Netflix Inc. struggled. More over half of those came via Disney+ Hotstar, a streaming service available in India and Southeast Asia.

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Gaurav Gandhi, the head of Amazon Prime Video in India, declined to be interviewed for this piece, and Amazon did not respond to an email seeking comment. Disney, Reliance, and Sony representatives all declined to comment.

Apple Inc.’s iPhone was just a year old when IPL began in 2008, and live streaming was still sporadic. Digital rights are expected to command a high price as more Indians view material online, including on smartphones.

The IPL is a multi-week cricket event that takes place every year in April and May. Ten teams, largely from the British Commonwealth, compete in three-hour matches, a shorter and more exciting version than the traditional five-day test cricket style. According to its organiser, the Board of Control for Cricket in India, the annual IPL competition is the third most popular sport in the world, behind only English soccer and the National Football League.

Duff & Phelps, now known as Kroll, evaluated IPL at $5.9 billion in 2020. According to Santosh N, managing partner of D and P India Advisory Services, that number might possibly be 25% higher.

The BCCI will auction the broadcast and streaming rights to the IPL separately for the first time. Four contracts are up for grabs in the Indian subcontinent and abroad, covering a wide range of television and digital rights, as well as a selection of significant matches.

Elara’s Taurani predicted that overall bids will reach 600 billion rupees ($7.7 billion), more than tripling the 163 billion rupees raised in 2017.

With the rising battle between Amazon and Reliance in the Indian retail business, the stakes are likewise high. The two corporations were most recently embroiled in a protracted legal battle over the management of faltering local retailer Future Group. Neither of them were successful.

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Following that impasse, some are referring to the cricket rights battle as Ambani vs Bezos 2.0

In the case of Disney, the possibilities of a decent bid appear to be dwindling, according to a source familiar with the situation who asked not to be identified because he was discussing internal concerns. According to the source, aggressive bidders such as Reliance and Amazon might emerge with a “open purse,” making the price unviable in terms of future ad revenue returns.

According to the source, Disney will bid for both broadcast (both domestic and international) and digital, but may forego broadcast in favour of increasing its live-streaming offer.

According to multiple sources following the firms’ progress, top officials at both Amazon and Disney’s headquarters will decide on auction strategies and prices. According to them, the ultimate figures for the highly wanted rights are likely to exceed $1 billion every year.

According to Tarun Pathak, a research director at consultancy Counterpoint Technology, the goal of winning the auction is based on a notion that a few hundred million internet users will become dedicated users of a range of digital enterprises.

Pathak explained, “Amazon took commerce and developed the Prime Video content business on top of it.” “If Reliance wins, it’ll take the other route,” he said, referring to the company’s technology department. “It’ll put commerce on top of content to make Jio a household name.”

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