New rights fees for the Indian Premier League, the professional organization for that sport in India, could be triple what currently Disney+ Hotstar platform is paying now -- a $2.5 billion five-year deal that ends after this season.
Professional sports in the U.S. are a key piece of the puzzle for TV platforms and networks around the world.
The bigger issue is what happens if Disney doesn't get the deal -- with the likes of Apple, Amazon, YouTube, Sony and others as likely potential bidders. Analysts estimate that Disney+Hotstar could see a dramatic drop in the 43 million some-odd subscribers.
All that could put the kibosh on Disney's goal of reaching 230 million to 260 million subscribers for its Disney + streaming service by September 2024.The positive viewpoint is that Disney might not be overly concerned about losing the big cricket game and how it might affect Disney+ Hotstar, because the service currently is a weak financial performer as a service -- earning just 61 cents a month per Indian user in the all-important and closely followed average monthly revenue per user (ARPU).
Compare this to the $6.32 ARPU in North America and $6.35 number in international markets. Not so good.
This is not new when it comes to major sports-rights fee gains for highly prized televised sports content everywhere. At certain price levels, TV networks/distributors have backed away.
In the U.S., for example, Hulu+Live TV, YouTube TV, Sling TV, and other new and traditional network distributors have eschewed making deals with regional sports networks -- all because right fees are too high and profit margins are slim to none.
Last year, Fox Corp. bowed out from higher bidding for NFL's “Thursday Night Football”, won by Amazon.
In cricket, a key moment in any match can typically come when a batsman is called “out.” Rules demand that the ‘bowling’ team -- the team on the field with a ‘bowler” throwing a ball -- needs to shout for a specific confirming action from the umpire.
Disney might want to do this if they want out of cricket. The customarily loud request in a cricket match to an umpire goes like this: