From retail, Amazon vs Reliance war spills into IPL media rights turf

As the Amazon versus Reliance retail battle continues, the two behemoths will be locked in another high-stakes rivalry over the next month-and-a-half, this time for India’s favourite sport – cricket.

It’s Amazon Chairman Jeff Bezos against Reliance Industries Chairman and Managing Director Mukesh Ambani in the second round of fierce competition as the world’s two of the richest men bid to win streaming and TV rights for the Indian Premier League (IPL).

Also read: Reliance takes over Future Retail stores despite Amazon case

Where it began: The retail battle

The retail battle between Amazon and Reliance has been centred on the Future Group. In 2019, Amazon and Kishore Biyani-led Future, the No 2 player in India after Reliance, formed a partnership under which the former invested $200 million in a unit of the latter.

The deal featured non-compete clauses prohibiting Future from selling retail assets to select rivals – and that list included Reliance. Its terms called for disputes to be settled by the Singapore International Arbitration Centre (SIAC).

When COVID struck in 2020, hitting hard the retail industry, Future sought to sell its assets to Reliance. Amazon moved the SIAC, saying the Future-Reliance deal is legally not tenable. Future and Reliance argued that the Amazon deal only covered select units of Future that Reliance was not buying.

This has morphed into a long-drawn-out legal battle, shuttling between the SIAC and Indian courts, including the Supreme Court.

Reliance currently leads the Indian retail market, with 1,100 supermarkets; Future has around 1,500 outlets, and both are expanding fast into e-commerce. According to media reports, Ambani is planning a public issue of Reliance Retail to boost its financial muscle. If Amazon manages to buy Future, it could become a bigger retail player in India than Reliance. At stake is India’s $900 billion retail market.

‘Best-in-class sports content’

The legal battle is ongoing and now the two will shift focus to the cricket field. Amazon has entered the sports streaming arena and already holds the rights for English Premier League, while Reliance, through Viacom18, has made its foray into sports broadcast with the recent launch of Sports18 TV channel.

The Reliance-backed Sports18 went on air on April 15, with a promise of offering “best-in-class” sports content in India. It made a big impact before going live by bagging the FIFA World Cup 2022 broadcast rights.

𝗬𝗼𝘂𝗿 𝘀𝗽𝗼𝗿𝘁𝘀 𝗵𝗲𝗿𝗼𝗲𝘀 𝘄𝗶𝗹𝗹 𝗵𝗮𝘃𝗲 𝗮 𝗻𝗲𝘄 𝗵𝗼𝗺𝗲 𝗮𝘁 𝟭𝟴𝟬𝟬 𝗵𝗼𝘂𝗿𝘀 🥁#Sports18 #HeroesHaveANewHome

— Sports18 (@Sports18) April 15, 2022

Besides the football World Cup, it also holds the rights for NBA (basketball), LaLiga, Ligue 1, Serie A (all football), Abu Dhabi T10 (cricket), and top ATP (tennis) & BWF (badminton) events.

Now, Reliance is eyeing a big share of Indian cricket and brand IPL. There is no better way to connect to the Indian masses and make an impact in broadcast and streaming other than cricket.

Also read: Game on: Sports broadcasting war hots up with Reliance entering fray

Over the last 15 years, the brand IPL has grown tremendously, and everybody wants to associate with it one way or the other. When the Board of Control for Cricket in India (BCCI) sold the TV rights for IPL in 2017, Star India shelled out a record Rs 16,347.50 crore for five years (2018-22).

E-auction for IPL rights

With Star’s contract ending this year, the BCCI has already invited bids for IPL rights for the next five-year cycle, and both Reliance and Amazon are in the fray, along with Star Sports, now owned by Disney, Sony Sports Network, and others.

Unlike the previous composite bid for IPL media rights, this time, the BCCI has split it into digital, TV, rest of the world, and a new non-exclusive bundle of 18 matches. With the inclusion of two new teams from this year, IPL’s number of matches too has gone up – from 60 to 74, and it could be more in the future.

For the first time in IPL history, the media rights will be e-auctioned from June 12.

The Tender document is now available for purchase. For the first time in @IPL history, the media rights will be e-auctioned. The e-auction will commence from June 12th, 2022 #TATAIPL

— Jay Shah (@JayShah) March 29, 2022

This time, the BCCI is set to earn more than Rs 40,000 crore as the combined base price is set at nearly Rs 33,000 crore.

Both Reliance and Amazon are sitting on piles of cash and both are keen to tap India’s giant market, be it retail or sports. IPL is the perfect platform for both.

Personal battle

It will be a personal battle/ego clash between Ambani and Bezos to secure IPL rights. They are expected to go all out in the bidding war. It could turn out to be the most fierce in IPL history.

Ambani is not new to IPL. He already owns a franchise – Mumbai Indians (MI) which is the most successful team in the league with five titles. Mumbai is the most valuable IPL franchise in 2022 at $1.3 billion (Rs 9,948 crore approximately) and its revenue is $33 million (Rs 252 crore approximately), according to Forbes.

Mr. Mukesh Ambani, @sachin_rt & @SrBachchan celebrating Mumbai Indians’ third IPL title. #CricketMeriJaan pic.twitter.com/YbgQwKfVzu

— Mumbai Indians (@mipaltan) May 23, 2017

“Cricket is the second biggest sport in the world, with two-and-a-half billion fans, and IPL is like its Super Bowl… If you’re not there, you do not exist,” Anton Rublievskyi, head of Parimatch, a betting company that advertised at IPL 2021, told Reuters.

Triplecom Media iTap Founder & CEO Kunal Dasgupta expects a “big fight” for digital rights.

“The big fight will happen for digital rights and not for TV rights. I don’t think the TV rights value will be going much above the reserve price of Rs 18,000 crore. These stories of drop in viewership of IPL will not have any impact on the value that the property will garner from the upcoming auctions,” he was quoted as saying by exchange4media website.

“The drop in viewership is worrying but it will not have a significant impact on IPL media rights auction. The dynamics of e-auction are totally different. Each player has a different level of desperation and nobody would want to be without IPL for the next five years. It’s too big a property to miss,” a senior executive from a leading TV broadcasting company, told the portal.

Murdoch’s entry into Viacom18

Just before the IPL e-auction, Reliance got a shot in the arm with James Murdoch, son of media mogul Rupert Murdoch, and Uday Shankar (former CEO of Star India), investing in Viacom18. Shankar’s vast sports broadcasting experience will drive Reliance’s bid for IPL rights.

On April 27, Reliance and Viacom18, announced a strategic partnership with Bodhi Tree Systems, which is a platform of James’ Lupa Systems and Shankar, to form one of the largest TV and digital streaming companies in India. Viacom18 is among the leading players in the core linear TV business with 38 channels across nine languages and a pan India presence.

“Bodhi Tree Systems is leading a fund raise with a consortium of investors to invest Rs 13,500 crore in Viacom18, to jointly build India’s leading entertainment platform and pioneer the Indian media landscape’s transformation to a “streaming-first” approach. Viacom18 owns and operates the suite of Colors TV channels and OTT platform, VOOT,” Reliance said in a statement.

Also, Reliance Projects & Property Management Services Limited, a wholly-owned subsidiary of Reliance Industries which has a significant presence in television, OTT, distribution, content creation, and production services, will invest Rs 1,645 crore.

Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, is an investor in Bodhi Tree Systems.

‘Track record unmatched’

Speaking about the partnership, Ambani said, “James and Uday’s track record is unmatched. For over two decades, they have played an undeniable role in shaping the media ecosystem in India, Asia, and around the world. We are very excited to partner with Bodhi Tree and lead India’s transition to a streaming-first media market. We are committed to bringing the best media and entertainment services for Indian customers through this partnership.”

“We could not be more pleased to announce our new partnership,” Murdoch and Shankar said. “Our ambition is to leverage technology advances, particularly in mobile, to provide meaningful solutions to meet everyday media and entertainment needs at scale. We seek to reshape the entertainment experience across more than 1 billion screens.”

Come June 12, IPL’s biggest off-field battle begins. Who will win?