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Sony and G Entertainment are preparing to bid for the Indian Premier League cricket rights this month as part of a merger between a Japanese and an Indian company.
A Sony-G bid for media rights in 2023-2027 for one of the world’s most valuable sports competitions will begin with current holder Walt Disney, which owns rival Indian media company Star India.
Other potential bidders include Facebook, which bid for the rights to Amazon and Mukesh Ambani’s Reliance Jio in 2017. The IPL’s governing body, the Board of Control for Cricket in India, said this week that it plans to release tenders by the end of October.
“Of course sports is a field that will be looked at in depth. This will not only expand our target audience, but also enrich our content offerings across digital platforms, ”Somani, head of mergers and acquisitions at GG, told the Financial Times.
“With the proposed cash inflow in the terms of the transaction, it gives us the ability to bid competitively for these premium sports features.”
The proposed merger was announced last week as India’s largest listed entertainment group, Invesco, faced a shareholder revolt, a U.S. fund that wants to restructure the board and expel chief executive Puneet Goenka.
The deal is yet to be finalized but will create India’s largest media group with everything from television channels and studios to streaming. According to Edelweiss, the two groups will control 27 percent of India’s media market.
Sony will have a 53 percent stake in the joint venture and will invest about 1. 1.6 billion, which Goenka and other executives say will be used to acquire content, including sports.
“This is an important deal at a crucial time when the Indian market is moving from TV to digital. Sport is a huge, huge part, ”said a person familiar with the deal. “In the long run, [it’s] It is quite possible that what we are putting together in the Indian market becomes the core of Netflix-style streaming services.
India is a fast growing entertainment market and the IPL is one of its most valuable assets. A two-month short format cricket tournament is held every year to attract the world’s biggest stars. Global and Indian companies line up to sponsor or advertise during matches.
According to Santosh N, managing partner of financial advisor Duff & Phelps, IPL rights in 2017, which sold for .6 2.6 billion in 2012, are expected to increase by at least 25 per cent.
Sony has a significant sports presence in India, broadcasting everything from international cricket matches to Champions League football competitions. The company bought Ten Sports Network from G in 2016 and had IPL rights before losing to Star in 2011.
Santosh said the deal with G will create a more competitive buyer. “With [Sony and Zee] Hand in hand, they have a very good bouquet of general entertainment and sports channels. . . This makes it a highly compelling bidder, ”he said.
Satoshi Saka, an analyst at Daiwa Securities, said the consolidation would allow G to “expand its current thin sports content.”
But the Sony-G deal may not go ahead as it is currently structured. Invesco, G’s largest shareholder with about 18 per cent stake, took the company to court this week to force an extraordinary general meeting in an effort to remove Goenka.
Some investors are frustrated that they consider G’s poor performance and weak corporate governance under Goenka, whose father started the company in 1991.
A lawyer for the shareholders told the court that they were not against the proposed merger but felt it should be considered by an “appropriate board”.
Sony declined to comment and cited a statement on September 22 announcing the proposed merger with the Indian company.
Additional report by Amy Kazmin in New Delhi
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