Amazon.com Inc. is planning to withdraw from a heated competition for the rights to stream Indian Premier League cricket matches, ceding one of the world’s most popular sporting contests to rivals from Walt Disney Co. to Mukesh Ambani’s Reliance Industries Ltd.

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The rights had been estimated to fetch an unprecedented USD 7.7 billion. The US giant, led by Jeff Bezos, is planning to throw in the towel rather than get into a bidding war at the June 12 auction, according to people familiar with the matter.

While Amazon has already invested more than USD 6 billion in the country, more spending merely for the online streaming rights to the league didn’t make business sense, they said, asking not to be identified as discussing internal deliberations. Representatives for Amazon didn’t respond to a request for comment.

Amazon’s surprise pullout leaves the field open to Ambani’s Reliance, Disney and Sony Group Corp., who are betting the game will help them dominate an Indian consumer market increasingly going online. Whichever company scores the deal could also bolster their position in a country of 1.4 billion where the English sport enjoys cult-like status.

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“Amazon has a great balance sheet but as a standalone, digital-only bidder, it would’ve had a challenge recouping such a big investment on streaming,” said Mumbai-based Mihir Shah, vice president and India's head at Media Partners Asia. “There’s a global shift toward saner valuations, and companies including Amazon are thinking harder about acquisition costs and unit economics.”

Amazon, which identified IPL among a half-dozen global sports franchises it’s interested in, had initially been determined to score a victory, Bloomberg News reported. The retail titan has spent hundreds of millions of dollars on European soccer rights and has forged a deal to broadcast Thursday Night Football in the US at USD 1 billion a season until 2033.

The IPL is a multi-week tournament typically held in April and May every year. Ten teams comprising players from mostly the British Commonwealth countries play matches that last three hours each, a shortened and more entertaining format compared to the classic five-day test cricket.

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Drawing more than half-a-billion viewers, the annual IPL tournament trails only English soccer and the National Football League in popularity globally, according to its organiser, the Board of Control for Cricket in India, or BCCI.

The IPL was valued at about USD 5.9 billion in 2020 by Duff & Phelps, now known as Kroll. That number could now be 25 percent higher, according to Santosh N, managing partner at D and P India Advisory Services. The BCCI estimates it’s worth USD 7 billion.

For the first time, the BCCI will auction IPL’s broadcast and streaming rights separately. Four contracts are up for grabs, broadly covering television and digital rights, as well as a pick of key matches, in the Indian subcontinent and overseas.

Total Bids

Given the intense competition, total bids could reach even Rs 600 billion (USD 7.7 billion), said Karan Taurani, a media analyst at Elara Capital. That would be more than triple the Rs 163 billion 21st Century Fox Inc. paid in 2017.

Disney, which inherited the rights when it took over Fox’s entertainment assets in 2019, is flying in top executives from its headquarters to Mumbai for the auction, according to people familiar with the matter. Hotstar, a local streaming service popular among cricket fans and now with Disney after the Fox deal, accounts for more than a third of Disney’s 138 million streaming users globally.

Representatives for Disney, Reliance and Sony declined to comment.

First Published:Jun 10, 2022 4:30 PM IST