mukesh ambani: IPL media rights: Mukesh Ambani opted out of TV rights chase in battle for cricket deal

Mukesh Ambani’s group ultimately dropped the pursuit of television broadcast rights to India’s top cricket league that Walt Disney Co. secured for $3 billion as the Indian conglomerate saw limited opportunity for long-term profit from the legacy platform.

The joint venture between Ambani’s

. and US media giant Paramount Global instead focused on winning the rights to digitally stream the lucrative Indian Premier League, betting its advertising revenue will be four-fold bigger than that for TV in five years, a person familiar with the group’s strategy said. The view was that television would struggle to deliver double digit growth, according to the person, who didn’t want to be identified discussing deliberations that were private.

While Viacom18 Media Pvt., the Ambani-Paramount JV, bid for TV rights in the initial rounds of the auction, this person said the focus was always on ensuring it secured digital rights. A representative for

declined to comment on the auction strategy.

Viacom18 paid 238 billion rupees ($3.1 billion) for the rights to stream the IPL tournament, one of the world’s most-watched sporting events, almost on par with what Disney shelled out. The decision gels with Ambani’s ambitions for his digital unit Jio . The billionaire, currently India’s richest man, wants to create a consumer ecosystem that marries entertainment and e-commerce to lure local users who are increasingly hooked to their smartphones.

The decision to let go of television rights saved Reliance billions of dollars, funds that can potentially be used to boost the conglomerate’s chances in the upcoming India auction for 5G spectrum. A prized cricket broadcast, which can add millions of subscribers, streamed on a speedy wireless network can be a potent mix for turbocharging Jio.

Jay Shah, the head of Board of Cricket Control in India, said in a separate interview that the country may see 900 million internet users in five years, underscoring the potential of digital rights. While TV was the staple source of entertainment in Indian middle class homes, the past few years have seen a rapid pivot toward online streaming — a trend exacerbated by the pandemic.

Reliance will be using its IPL rights as a tactical asset to build out streaming and digital platforms including Voot, Jio and others, this person said. Viacom18 has already secured media rights in soccer, badminton, tennis and basketball events, giving it a diverse portfolio of sports assets.