The INR 26,000-crore loss statement put out recently by Jio Star is not an aberration. It is the inevitable outcome of a sports-media model that has drifted far away from its operating fundamentals. For years, Indian cricket rights have been priced on optimism, leverage and strategic intent rather than on sober profit-and-loss arithmetic. The bill has now arrived.
Start with the global crown jewel. The ICC media rights are valued at roughly USD 3.1 billion for four years. The revenues from these properties hover between USD 800 to 850 million. With rights fees payable equally every year, the arithmetic is unforgiving. Over the cycle, the loss is in the region of USD 2.3 billion for Jio Star, the official broadcaster. This is before accounting for currency depreciation, rising production costs or the advertising slowdown.
The domestic flagship tells a similar story. The IPL economics are under pressure in the current scenario. Media rights are only part of the cost stack. Marketing expenses, ever-escalating production values, talent fees and on-ground integrations have ballooned. Add to this the sharp depreciation of the rupee since the rights were struck, and the gap between cost and revenue widens further.
Then came the shock no one had modelled aggressively enough. The ban on real-money gaming advertising punched an estimated 15 per cent hole in the system. For a market that had grown accustomed to gaming money propping up CPMs and filling inventory, this was not a cyclical dip but a structural rupture. Add another USD 100 million loss each from BCCI tournaments and other properties, and the pressure compounds.
All of this was predicated on assumptions that have not held. Advertising CPMs are under pressure, not just because of macro headwinds but because supply has exploded while advertiser’s confidence has not. Distribution revenues are down as linear TV subscriptions fall and price hikes hit resistance. The promise that digital scale would offset linear decline has been slower to materialise in cash terms than in reach metrics.
At the heart of this lies a strategic choice made by Jio. The cricket rights play was never purely a P&L decision. It was a balance-sheet buy. An asset widely valued at around USD 12 billion has effectively been acquired at about USD 5 billion. From that lens, it is a spectacular deal. But balance-sheet logic does not pay annual rights instalments. Cash flows do. And roughly USD 2-3 billion in annual obligations still need to be serviced.
Contrast this with history. The first phase of the IPL, when Sony held rights for a decade, was arguably the most rational. Costs were aligned to revenues and the ecosystem was still expanding. During Star’s first five-year term, the broadcaster broadly broke even. In the current cycle, losses are mounting rapidly, reflecting how far rights inflation has outpaced monetisation reality.
What happens next is unlikely to be subtle. Rights renegotiation is inevitable. The IPL will be ring-fenced; its value must hold at all costs. That is the one property that still anchors the entire cricket economy. With the ICC, expect creative recalibration – perhaps additional matches, new tournaments or packaging “goodies” to justify pricing without an outright haircut. BCCI tournaments, however, may be de-prioritised. In a world of constrained capital, not every property can remain sacred.
The back to back Zee deal that was signed earlier is now stuck in court and offers little immediate relief. Any potential upside there has almost certainly already been written off in the books. On scheduling, broadcasters will push hard against further IPL expansion. More matches may grow topline fandom, but they also dilute scarcity and add cost. In the short to medium term, consolidation, not expansion, will be the watchword.
What we are witnessing is a reset. Not a collapse, but a recalibration of expectations. India will remain cricket’s richest market, but the era of rights being bid up on the assumption that “something will give” is ending. Capital is no longer free, advertising is no longer guaranteed, and distribution is no longer linear. For Reliance, the asset is still a win. For Jio Star, the P&L is under siege. Bridging that gap will define the next phase of Indian sports broadcasting. The romance of cricket will endure. The economics will have to grow up.
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