Open bidding or an online auction? The query is that. To make the best choice about the media rights for India’s bilateral cricket, the Board of Control for Cricket in India (BCCI) officials are straining every sinew. Five agencies were engaged by the BCCI mandarins over the course of the past week over the best approach to sell the rights, which were allegedly intended to be sold for four years, for the cycle 2023–2027.
One of the five was Ernst & Young, a global provider of assurance, consulting, strategy and transactions, and tax services. Although there was no instant confirmation, it is thought that KPMG, a similar global agency with which the BCCI had a lucrative arrangement for the media rights to the IPL, was also consulted. A media selling agency with a base in Mumbai, Group M, has also been consulted.
The main topic of debate/presentation is whether to use a closed bidding process or an electronic auction. Because of the expected value, the latter is currently believed to be the better option. When there is closed bidding, or a blind offer, the party eager to buy the rights may go all out, and the gap between the second and winning bid is predicted to be substantially bigger. In an auction, the final price will be around 5% dearer (higher) than the second highest bidder. It so happens that closed bidding is the norm.
The continually postponed merger of Sony and Zee networks may also have an impact on the process. It was anticipated to be formalized by January 1 but was delayed to April 1 and then a new date of June 1 was forecast. According to current reports, the proposed merger might not be finished until August 1. According to popular belief, Disney Star and Viacom 18 would be the other two equally powerful parties negotiating for the rights if the two businesses unite. The viewpoints diverge when Sony and Zee make separate offers.
The packaging of the tender also prompted opinions to be sought, but it is generally believed that there may not be much work to be done and that the BCCI’s only option is to sell the linear and digital rights separately. The current owners, Star, had already obtained both rights in 2018 with a combined bid of Rs 6138 crore. E-auction was the approach used at the time.