Rupert Murdoch must have found that rarest of things: an American cricket fan. The Australian media mogul, through his unit Star India, agreed on Friday to pay almost $1 billion for the global rights to the home games of India’s national cricket team. It is unusual to see a company in play splashing the cash as freely as this. The deal suggests Walt Disney, which has offered to buy parts of Twenty-First Century Fox, shares its commitment to the growth market.
Star has secured broadcast rights for television and digital platforms for five years to 2023, outbidding Sony Pictures and Reliance Industries, which is backed by Mukesh Ambani, India’s richest man. A price of $9.25 million per match is a 40% increase from the previous auction and more expensive, match-for-match, than rights to Indian Premier League cricket, which Star bought in September for $2.5 billion.
India is a cricket-mad nation, and Star now has a monopoly over a sport with a huge and growing audience.
Digital viewership
The IPL has 400 million viewers, a number that has doubled in two years. Television ownership is still increasing. And as mobile data gets cheaper and smartphones proliferate, another 650 million Indians will come online by 2022, Counterpoint Research estimates, which will fuel growth in digital viewership.
By contrast, Americans are losing interest in real-time events such the National Football League. Deteriorating viewership will hurt advertising revenues and the bottomline. That explains why India has held such appeal for Murdoch and is of serious interest for Disney, which has offered $52 billion for parts of Fox. In February, Disney boss Bob Iger said India was a market with huge growth potential and singled out Hotstar, Star’s Netflix-like streaming service, as of particular interest.
Operating in India is not without its problems. Star has only just staved off New Delhi’s attempt to force it to share all its IPL games with a state broadcaster, agreeing instead to share just a fifth of the tournament with a one-hour time lag. Still, Murdoch would probably not be splurging on new broadcast rights unless he knew that Fox’s suitor shared his passion for the geography and the game.
(The author is a Reuters Breakingviews columnist. The opinions are her own.)
