The Sony Pictures Networks India has been hugely affected by the loss of their media rights for the highly profitable Indian Premier League as the company was extremely dependant on the month and a half long tournament for its profits.
Sony who has been the broadcasting partner of IPL for the last decade has earned around Rs. 1,3000 crores in 2017 while in the previous edition they had a total profit of Rs 1,100 crores from advertising.
The Star Sports Network has paid Rs. 8,200 crores in 2008 for the media rights of IPL for a decade and its India’s head of network has confirmed time and again, that IPL is the most profitable property. While the average rate for an advertisement during an IPL match ranges from Rs 5-6 lakhs, the Star Sports Network confirmed that the inventory sold in the region was Rs. 25 lakh for a 10-minute ad.
The inventory of an advertisement is around 2,300 seconds in an IPL match, and Sony manages to pre sell over 30 of its inventories. The remaining were sold at huge premiums. It won’t be wrong to term IPL as the most established risk-free media property at the moment.
However, the question which has been raised is whether it will continue to be a risk-free property with Star India grabbing the media rights for a staggering Rs. 16,348 crores more than double of what Sony had paid for the media rights in the last ten years.
To make it a profitable property, Star India has to make profits in the region of 20%. Star India would have to spend around Rs. 55 crores for a match which would also signify that they have to double the ad rates.
The loss of IPL media rights will be a huge setback for the Sony Pictures Network but it won’t be the end of the game as Star India’s rights of BCCI matches is ending this year, and the Sony Network will take every possible measure to ensure to take the Team India media rights.