#10: Mukesh Ambani is quietly building a Sports Media Empire
Mukesh Ambani is directly involved in sports owning several entities. Now, he is planning for an entry into distribution side of things. Here's what we know up till now and what I make of it.
FIRST, SOME BASIC BACKGROUND —
Mukesh Ambani is the richest man in India today and the 10th richest in the world. He is the chairman of Reliance Industries Limited (RIL) — a huge Indian multinational conglomerate having businesses in energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles among others. RIL is India’s largest company by market capitalisation ($233 Billion+) of which Mr Ambani and his family hold almost half. This makes Ambani a part of the $100-billion-club, an elite club of people that only a few are a part of (currently, which fluctuates between nine and eleven people)
Well, congratulations to him!
But this post is going to be about what is next for him. And, for a man and company of that stature, there is no such thing as ‘the next thing’. There are always ‘next things’. One of those for Ambani and RIL right now is the expansion of their sports media business. And I say expansion because howsoever little it may be, it does exist currently.
RIL has always had a strong presence in the operations and distribution side of entertainment content — think Reliance Entertainment, the film production house, Jio Cinema, Jio TV, Viacom18-owned TV channels like Colors, Colors Infinity, MTV, VH1 etc. [Viacom18 is a joint venture between RIL-owned Network18 and ViacomCBS]
In sports, however, Ambani and Co. have been involved in the operations side owning and running:
Mumbai Indians, the 5x champion IPL franchise
Indian Super League, a 65:35 joint venture between RIL and Star India
But RIL is not quite as involved in the distribution side of the things. That is changing now. And changing quickly.
For RIL-owned Viacom18, it started in 2018 with the Nidahas Cup. That was a good tournament to test the waters. Viacom18 co-acquired the broadcast rights along with Discovery-owned DSports and broadcasted it on its Rishtey Cineplex channel with Hindi commentary. And it turned out to be pretty well for everyone. Thanks to Dinesh Karthik who delivered a moment that will easily go down as a Top-10 all-time as far as the best moments in the history of Indian sports are concerned. [Context: Dinesh Karthik was the batter who won the finals for India when it seemed curtains. 5 runs were needed off the last ball before he ended it with a Six. Long story short: THE DRAMA WAS PURE!!!!]. Here’s what Viacom18 CEO Sudhanshu Vats had to say about their potential sports broadcasting endeavours back in 2018 —
Sports broadcasting is a bit of a business conundrum – it represents a sizeable opportunity, but the cost of entry tends to be prohibitive. It has been a white space that we have continuously been evaluating and this association with DSPORT to air the NIDAHAS tri series provides us with a fertile testing ground. As we endeavor to test waters with our very first broadcast of an international sporting property, what better than a cricket tri series involving the national team.
Cut to today in 2021, Viacom18 is going full-monty, all-in on its distribution game. And if what the CEO said was anything to go by, seems like, Viacom18 is here with a plan.
It started with roping in Anil Jayraj, the veteran from Disney owned-Star Sports. Jayraj worked at Star Sports for around six-and-a-half years and was the major factor behind the success of IPL, Pro Kabaddi League, the Indian Super League (ISL) among others. He is currently with Viacom18 serving as the CEO-Sports. He was given a clean slate and he started going crazy filling it, acquiring some top-class sports properties.
Viacom18-owned MTV recently acquired the rights to broadcast live games of the top-flight Spanish football league, La Liga. VH1 now shows live matches from the top-flight Italian football, Serie A and top-flight French football, Ligue 1. OTT platform VOOT is another alternative to watch the games. This leaves Disney-owned Star Network with just English Premier League and Sony-Zee with just Bundesliga. Viacom18 just took three of the top-5 football leagues in the world.
It doesn't end here. Apart from these properties, Viacom18 also got a hold of —
ATP Masters tennis tournament
Abu Dhabi T10 League (cricket)
And the biggest of them all — FIFA 2022 World Cup for a whooping 450 Crores. For context, FIFA World Cup 2018 reached a total cumulative of 25 Crore+ (254 million) viewers in India.
The next order of business — IPL (Indian Premier League) rights. It has to be. IPL is the hottest sports commodity in the country. The BCCI tender for 2023-27 broadcast rights/ digital streaming rights is set to be released sometime soon. It will be a close game:
— IPL has served Star Network and Disney+ HotStar well. They would want it again.
— The recently formed alliance of Zee-Sony won’t back down either and will have a serious go at it.
While deep down inside we may all be willing for IPL to go back home to Set Max (owned by Sony Pictures Network) and live that nostalgia of the super-entertaining Extra Innings T20 pre-game show, with Viacom18 and Star in the picture, it is going to be tough for everybody.
WHAT’s IN IT FOR RIL AS A BUSINESS MOVE:
Cricket-based properties are already expensive, and now, when there are going to be three players in the game, up one from the previous two (small numbers, but big enough for the impact), the prices won’t come down for sure with so much competition. Of course, the upside for IPL rights is huge, but it also runs the risk of losing viability due to high-demand-induced-price-hikes. But, there may be an advantage for Viacom18 and RIL that might give them more business than the shrinkage of margins might take away from them, one that others may not have. And that advantage is that RIL has a chance to create a sort of walled garden —
Watch sports on OUR TV channels, or watch it on OUR OTT platforms, subscribe to OUR mobile data services (or JioFi) if you don’t have internet or have run out of it (oh, and yes: watch OUR team play too!).
So, RIL has a lot of upside in buying IPL and the ICC properties. And it’s not going to be as difficult for them to buy the rights and run this business as it would have been for any other newcomer. RIL has got both — money and distribution. They also stand to gain if they bring fresh and exciting sports programming and popularise those, something that they have tried their hand at (more on that later in the piece).
WHAT’s IN IT FOR THE VIEWERS AND FANS:
Fans get a new channel or some new channels and a lot more sports content. That was the obvious part. But one of the two things happen from here — either Viacom18/ RIL takes a bigger piece of the pie OR they expand an already limited pie. So, if Viacom18 does what used to happen at the other channels, it is one and the same for the fan. They’ll broadcast it — fans just will have found a new channel to tune in (taking piece of the pie). But, if as broadcasters, they can enhance the overall fan engagement and game experience, nothing like it. For example, for their OTT audience, they can integrate their own fantasy gaming in-game or some metaverse integrations, AR/VR integrations etc. For Live TV, they could increase the quality of the production like high-quality (8K) cameras, more angles, behind-the-scenes glimpses, live fan interaction, contests etc. These really take sports broadcasting and streaming to a whole new level by attracting new and young fans (expanding the pie itself).
Most importantly, increasing the air time (allocating first of all) for the emerging sports and under-served sports backed by good production shows and good marketing and storytelling can do wonders (I have talked more about it here). This is going to be the most looked-forward-to aspect of Viacom18’s entry into sports media. Star Sports did great with Pro Kabaddi League and the Indian Super League. Sony did great with the Olympics. I believe the same can be done with many other sports and pro leagues on a consistent basis. With three players in the sports broadcasting game, that looks very much possible because a lot of sports programming/sports properties have been under-explored/unexplored so far.
I am optimistic about this aspect because Viacom18 has actually done something with niche sports. Viacom18 has put on TV the Super Fight League (an MMA league), the Poker Sports League, and even the highest prospect of them all — E-Sports content (which it still continues to bet big on). So, Viacom18 does look promising in this regard and seems like it could be quite a revolution in this space.
MY TAKE:
To be honest, if a lot of people have found an alternative way to watch sports (or any content ,in general) through OTTs, a lot of that credit goes to Mukesh Ambani’s Jio. Over 60% of users watched sports on OTT platforms or Live TV in Q3 of 2018. I am sure that number must be up by now (although I don’t have any data to back that up). The OTT viewership, in general, has increased massively in the Jio era. Jio first came out in 2015. By 2014, India had 1.2 Crore (12 million) consumers who watched content on OTTs. Today, that number is 35.3 Crores (353 million), meaning a growth with an insane CAGR of ~60% over the last 7 years.
Jio made the internet accessible in India big time. And, it has been rising and rising ever since. Well now, RIL and Mr Ambani have decided to cash in. I say that’s fair enough and well-deserved.
So, YES, with everything in mind, I do want the IPL rights to go to Viacom18. And, in my opinion, it is also Viacom18 who has the strongest chances anyway. That is what I want and what I believe will happen.
As Trent Crimm, The Independent (from ‘Ted Lasso’) would say — "I won’t gloat when it happens. Because I can’t help but root for him”.
I’ll leave it at that for today. It would be very interesting to see which network serves as the host of IPL from 2023-2027, what price do they pay, and what Viacom18 Sports network does different and of course, the competition between three sports-media players. Anyway, I’ll keep you updated with the insights.
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