Fantasy sports platform Dream 11, a tech start-up founded in 2008 by two young Mumbai-based entrepreneurs, Harsh Jain and Bhavit Sheth, took the cricket fraternity by surprise when they made a successful bid for the title rights of the Indian Premier League (IPL) It pipped e-learning start-ups Byju’s and Unacademy to walk away with the rights while Tata Sons, who had also ‘expressed interest’ in the property, did not come to the bidding table. In effect, all three participants turned out to be Indian tech start-ups.
BCCI had floated an ‘expression of interest (EOI)’ for potential bidders to walk in after their existing title rights partner Vivo India and IPL separated ways two weeks ago owing to the recent controversies surrounding the India-China relationship. Vivo were contracted to pay the IPL £44 million per year as part of a £219 million deal for five years.
Dream 11 have made a £22.2 million bid for the 2020 edition, along with negotiations and tacit understanding that they will continue to own the title rights for the next two years – 2021 & 2022 – should Vivo not return. If Vivo does not return, Dream 11 will pay the BCCI £24 million each in the second and the third year, under the new arrangement. Should Dream 11 continue until 2022, the BCCI will earn an average of £23.4 million from Dream 11 each year for three years, which is technically around 50% of what Vivo was paying for the rights.
However, where BCCI will further make up for Vivo’s exit is by bringing in two additional official partners at £4 million each. E-learning start-up Unacademy and fintech company Cred had already closed verbal negotiations with the BCCI, which were subject to title rights. “Unless Byju’s decide to up the game and bid a higher amount, Unacademy and Cred will commit £8 million between them to the IPL kitty,” sources in the know said.
At an additional £8 million per year, added to the average of £23.4 million that Dream 11 will pay the BCCI for the title, the IPL will be assured of sponsorships close to £31 million per year for the next three editions – making up for almost 65% of what Vivo was paying.“And that is actually the correct value. Vivo was over-paying,” industry executives said.
Byju’s and Unacademy came up with a bid of £20.1 million and 17.1 million respectively. Apropos of the controversy surrounding Chinese gaming major Tencent’s single-digit investment in Dream 11, the BCCI is convinced that the startup “is essentially an Indian company driven by two Indian entrepreneurs and therefore, not a concern”.
In fact, the board’s view is that “Dream 11 will boost IPL’s fan engagement that has been lying passive over the last few months”, especially due to the Covid-led slowdown.
Meanwhile, despite all the hype surrounding Tata Sons expressing interest, the conglomerate did not come up with a bid. Tatas’ primary objective was to block three categories (different brands under the group) through the title sponsorship while the BCCI had maintained that the space would only allow the blocking of a single category. “That’s never going to work for the Tatas”, sources in the know said, adding “but their expressing interest helped BCCI in spiking the bid values”.
