The Competition Commission ruled that the Board of Control for Cricket in India, the world’s wealthiest national cricket body, abused its position by agreeing to broadcasters’ demands that it would not allow a rival to the IPL.
The commission ordered the BCCI to pay 520 million rupees ($8 million) within 60 days.
Sony Pictures Networks has held the rights since the IPL started in 2008.
But in a major coup, Rupert Murdoch’s Star India channel in September bought the rights for 2018-22 for $2.55 billion — a 150 percent increase on the previous deal — confirming the league as one of the world’s hottest sports properties.
The anti-trust commission made an initial ruling in 2013 that the BCCI’s deal with Sony was illegal because of a clause which prevented the BCCI from allowing any other 20-over league to compete with the IPL.
The cricket body won a court order forcing a review of the case.
But the commission’s new ruling came to the same conclusion and ordered the same fine.
The BCCI had pleaded that bidders for the television deal had insisted on the no-competition clause.
“BCCI has not provided any justification as to how this self-imposed restriction of not organising, sanctioning, approving or supporting another T20 cricket event that will be competing with IPL, is connected to the interest of cricket,” the competition commission said however.
The commission said that “in the absence of any plausible explanation” it had found that the clause was intended to “enhance the commercial interest of the bidders of broadcasting rights” and the revenues received by BCCI.
In addition to the fine, the commission said the BCCI must not place any “blanket restriction” on the organisation of professional leagues to rival the IPL.
The BCCI made no immediate comment on the fine. But the ruling is a new blow to the body that has been managed by a panel appointed by the Supreme Court in 2016 to reform it.
The BCCI has in recent years been riven by infighting and allegations of shady dealings.
The IPL has created a huge buzz after its consolidated media rights were sold to Star India for a whopping US$2.55 billion.
The media rights, which combine television and digital coverage as one package, have been sold for a five-year period, starting next year and running until 2022.
So exorbitant is the value of the deal that it has dwarfed the media rights for the Indian national team.
Star India currently holds the rights to telecast national team matches until 2018. The value of that deal is approximately $600m for a total of 96 matches – around $6.7m per fixture.
On the other hand, the staggering amount bid for the IPL means that one match would cost Star India $8.47m.
For the first time since the IPL began, the broadcast rights for a single IPL match are worth more than an India home international. #IPL
— Anand Vasu (@anandvasu) September 4, 2017
The difference between the two showcases the ever-growing commercial value of the T20 format to broadcasters – with sponsors paying a premium to ensure their brands are seen in front of huge audiences.
India has been the economic behemoth of the cricketing world for some time now with its cricket-crazy population of over a billion people.
In comparison, the Big Bash League (BBL) of Australia sold its media rights for $20m per year, though that deal is up for reconsideration soon.
In broader sporting terms, the huge amount of money poured into the IPL means the competition holds it own on the world stage, but the English Premier League is top of the three when it comes to monetary value.
The Premier League media rights are valued at approximately $ 6.7 billion (from 2016-19), meaning each match costs a whopping $13.15m.
— Lalit Kumar Modi (@LalitKModi) September 4, 2017
Similarly, the NFL brings in about $22.47m per game. In the NBA, each contest equates to $1.99m.
It is clear to see that the growth of the IPL has been tremendous and the revenues are pouring in. If the current trend continues, it will not be long before the franchise-based model will be counted among the most lucrative television deals in the world of sports.
That belief was indeed evident when Star India CEO Uday Shankar spoke to reporters after winning the bid.
“We believe the IPL is a very powerful property, and we believe there is lots more value that can be created for fans of cricket on digital and TV,” Shankar said.
“India, cricket and IPL have changed dramatically since 2008, and this bid is a reflection of that.”
The Board of Control of Cricket in India (BCCI) has announced that Star India has bagged the Indian Premier League (IPL) television and digital rights for a whopping US$ 2.55 billion (INR 16,347.5 crore) from 2018-2022.
There were a total of seven categories up for grabs: television rights for India, digital rights for India and rights for the USA, Europe, Middle East, Africa and the rest of the world.
A total of 24 firms had bought the tender documents though only 14 of them had bid for the rights.
— IndianPremierLeague (@IPL) September 4, 2017
Star India made a consolidated bid for the all seven markets which was larger than the combined sum of the highest bid in each category.
Sony and Star India were the only two bidders left in the fray for the Indian market after the bids were evaluated on Monday morning.
The World Sports Group (WSG) had won the initial television rights for the IPL in 2008 for $918 million for a ten-year period. These rights were then bought over by Sony for $1.63 billion in 2009.
— Lalit Kumar Modi (@LalitKModi) September 4, 2017
Meanwhile, Star India had held the previous rights for the Indian digital market on a three-year deal from 2015 to 2017.
Star India chairman Uday Shankar expressed delight at winning the lucrative bid and said “We believe the IPL is a very powerful property, and we believe there is lots more value that can be created for fans of cricket on digital and TV.”
“We would remain committed to ensure the growth of sports in this country continues to be driven by the power of cricket.”
“India, cricket and IPL have changed dramatically since its inception (in 2008) and this bid is a reflection of that,” the CEO told reporters.
Indian team sponsorship – OPPO 1079 crores
IPL title sponsorship – VIVO 2199 crores
IPL media rights – STAR 16347.50 crores
— Bharath Seervi (@SeerviBharath) September 4, 2017
BCCI CEO Rahul Johri said, “Our main endeavour to the stakeholders was to provide a transparent process where there should not be any iota of doubt.”
The new deal would see the IPL edge out the national team in terms of cost per match from 2018 onwards.
The current cost of one Indian national team match is INR 45 crore while Star India’s new bid would mean one IPL match would cost INR 55 crore.