Levelling the Playing Field: Antitrust Issues in Cricket Broadcasting

Among the tools of sports marketing, the sale and exploitation of sports broadcasting rights remains the most lucrative and essential one.

Introduction

There are few countries in the world that intertwine sports with national identity as profoundly as India does with cricket. In recent times, there has been a boom in the market for sports media rights in the country, with cricket at its core.¹ It exists because a huge segment of people is invested in the sport and are ready to spend money on subscriptions for both TV and digital formats to stream matches. In 2023, the value of media rights of the Indian Premier League (IPL), which was over $6 billion, surpassed the per-match value of even the celebrated English Premier League.² The figure instantiates the commercial capabilities of the sport and the huge market that is tied to its broadcasting rights. In India, these rights are auctioned through the method of collective selling, wherein the Board of Control for Cricket in India (BCCI) sells the rights of all matches of a certain format jointly on behalf of all the participating teams, rather than having each team sell its rights separately.³ In principle, this forms a clear violation of the competition law. However, most jurisdictions, including the European Union (EU), the United States of America (USA), and India, have granted a special exemption to permit such a model for the sake of efficiency gains and increased revenue in the sports industry.⁴ There has been considerably more dialogue over the legality and effects of the model in these nations than in India. While some anti-competitive concerns have been discussed and raised by the regulatory body, a comprehensive analysis of the model in the Indian context is still due. This article seeks to draw attention to this lacuna by discussing the method at length in global and domestic contexts and analysing the competitive concerns in the market, while giving suggestive solutions to the delineated problems.

Global context

The rise of sport as a global industry is attributable to the marketing of sports, players, events, etc., a feature first seen in the USA, then subsequently in Europe and elsewhere across the globe.⁵ Among the tools of sports marketing, the sale and exploitation of sports broadcasting rights remains the most lucrative and essential one.⁶ Without the huge revenues generated by sports broadcasting, the organisation of major sports events would be impossible, and sports fans would lose out on watching their favourite teams and clubs play. Therefore, it can be said that the commercialisation of sports broadcasting rights is the oxygen of sport in today’s time.⁷

There are two methods of selling the broadcasting rights of a sports competition. One is individual selling, where each club/team individually negotiates and sells rights of games to the broadcasters, and the other is collective selling, where rights are sold in a bundle by one association, and the revenue is later distributed equally or as per the terms of the contract.⁸ This method of collective selling sits uneasily at the intersection of competition law and the economics of sports. It enables a single bidder in the market to replace multiple competing bidders and maintain an elevated price, which is prima facie a clear restriction of competition. Yet, both the EU and the USA have carved out regulatory exemptions that permit such a model. The reasoning behind such exemptions, however, differs between the countries, in both substance and emphasis.

In the EU, the issue gained prominence when the Commission questioned the collective sale arrangement adopted by UEFA (Union of European Football Associations) when selling the rights to broadcast the Champions League matches. The Commission feared that it led to price fixing and restriction of the supply-side competition, and strengthened UEFA’s dominant position, which is squarely prohibited under Articles 101 and 102 of the Treaty on Functioning of the European Union. However, in 2003, the Commission approved such an arrangement, granting an exemption on the grounds of efficiency and solidarity. Such approval was subject to the condition that the packages of matches would be unbundled so that no broadcaster would gain control of the entirety of the rights, and the duration of such contracts was capped at a maximum of three years. Such justification later proved not to be entirely correct. Prices rose for consumers while their choices diminished⁹, and the solidarity payments remained meagre for years.¹⁰ In 2021, there was a chance to revisit the reasoning when the European Super League litigation reached the court of justice.¹¹ However, the court ultimately upheld the arrangement if the efficiencies and redistributions were secured in practice.

The approach of the USA towards the issue differs in the underlying goal behind adopting such a policy. In 1961, in the case of United States of America v. National Football League¹², a District Court deemed the collective selling method adopted by the National Football League to be violative of the USA antitrust laws. In response, Congress passed the Sports Broadcasting Act (US), which carved out an antitrust exemption to facilitate the collective selling of rights by the sports leagues.¹³ While the EU justified the exemption on the grounds of efficiency and consumer benefit, the Sports Broadcasting Act sought to protect different interests altogether. The USA market did not deal with the issue of fragmentation, unlike the EU, where the market consists of distinct markets of member States. It has been argued by scholars that the Sports Broadcasting Act is simply a special interest legislation that has the sole object of maximising the revenue of sports leagues.¹⁴ This is highlighted by the fact that conditions of unbundling and a bar on exclusivity of rights in contracts have not been levied in the USA.

It is important to understand the stance of these two countries on the issue, as when taken together, they demonstrate the difficulty of securing fair competition in a sector where cooperation between rivals is economically necessary and central to the value of the product itself.

The Indian framework

The sports broadcasting industry in India caters to a wide audience and is, hence, a very lucrative business. National bodies, namely, the BCCI, Athletics Federation of India, etc. hold the intellectual property rights of their games.¹⁵ This principle was adopted in BCCI v. Cricket Assn. of Bihar, wherein the court held that broadcasting rights of cricket matches are commodities of the BCCI.¹⁶ Furthermore, in Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal, the Supreme Court held that the right to broadcast a sporting event is a part of freedom of speech and expression under Article 19(1)(a) of the Constitution of India, and the State does not have a monopoly over the same.¹⁷ The ruling emphasised the fact that organisations like the BCCI have the exclusive right to sell media rights for such sporting events and commercially exploit the content created by them.

To bring this into effect, the BCCI sells collective media rights of events like the IPL beforehand, through e-auctions.¹⁸ It enters into agreements with media houses, granting them exclusive rights to broadcast such events. While the competition regime in India does not treat such agreements as illegal per se, they can come under scrutiny if they cause Appreciable Adverse Effect on Competition (AAEC) under Section 3, Competition Act, 2002. Essentially, this means that the enforcement depends on the rule of reason approach.¹⁹

Section 4, Competition Act, 2002, prohibits abuse of dominance by an enterprise that results in the denial of market access, predatory pricing, etc. In this regard, the BCCI has been regarded as a dominant enterprise in the sports broadcasting market and thus its actions are subject to higher standards of compliance with competition law. The dominant position of the BCCI was under investigation in Surinder Singh Barmi v. IPL²⁰. The issue revolved around a contractual clause inserted by the BCCI in the IPL media rights agreement with Sony Pictures, which barred the BCCI from organising any other domestic T20 League, to maintain Sony’s exclusivity on the broadcasting of IPL for 10 years. The findings of Competition Commission of India (CCI) in this order were firstly, the BCCI is was a de facto regulator of cricket in India and owing to its control on the sport held a monopoly position; secondly, the BCCI abused its dominant position by inserting the abovementioned contractual clause; and thirdly, such actions were held to deny market access to competitors, violating Section 4(2)(c) of the Act.

Even though the Barmi case²¹ sheds light on one of the perils of collective selling of broadcasting rights in India, there is limited guidance on other competitive concerns that it may pose in the Indian Market. Further, the presence of a dominant enterprise like the BCCI makes the market highly prone to anticompetitive behaviour. The lacunas lie in the fact that no ex-ante rule-making has been taken up by the regulatory authorities to deal with the problem of collective selling in the sports media rights market, which places this issue at risk of exploitation against the established competitive practices.

Analysis of competition concerns in India

1. Foreclosure of competition

The Indian sports broadcasting market is concentrated in the hands of a few players.²² This dominance is visible in the contemporary sale of media rights, wherein its most recent auction of media rights of IPL (2023—2027) garnered about 6.2 billion US dollars, which were split between Disney and Viacom 18.²³ Viacom 18, which is a direct subsidiary of Reliance, has secured rights (both TV and digital) to televise and live stream World Premier League matches, and the bilateral matches of the national cricket team for the cycles 2023—2027 and 2023—2028, respectively. The other half of the market is captured by Disney Star, which secured rights (both TV and digital) to broadcast International Cricket Council (ICC) cricket matches for the 2024—2027 cycle. Lastly, the IPL media rights for the 2023—2027 cycle are shared, with Viacom 18 getting digital rights and Disney Star securing TV rights. Hence, evidently, the market is concentrated in nature, a factor intrinsic to the BCCI’s model of collective sale of rights. When bundles of all matches of a particular format are sold together, it amounts to a massive cost, which only companies with deep pockets will be able to afford. This results in the creation of high entry barriers in the market and ultimately market foreclosure for long periods. Once a broadcaster bags the rights, all the competitors are locked out of the market for the entirety of the cycle.

Today, these competition concerns are further aggravated in light of the $8.5 billion merger entered into between Reliance and Disney, effected on 14 November 2024. With around 120 channels, a worldwide audience of 750 million people, and 43 per cent revenue share in the advertising market, the merged entity is a behemoth that dwarfs all rival forces. These red flags did not escape CCI’s eye. Before the approval of the merger, the CCI issued notices to the parties sharing its concern over the overwhelming grip that the entities enjoy over the broadcasting of cricket. In response, the parties proposed a set of voluntary commitments that consisted of various modifications to advertising slots and fair pricing practices. The merger was finally approved on the condition that the TV and digital “advertising” rights linked with the major cricketing formats would not be bundled together, and the advertising sales garnered from the two media would not be clubbed together to maintain a degree of independence. The parties also pledged to maintain transparent and non-discriminatory subscriber costs and align them with industry standards. However, they refused to sell off any of the cricket rights because the term of the rights is soon to expire either in 2027 or 2028, and any such step would require the BCCI’s approval, further elongating the process. The CCI did end up granting conditional approval to the merger²⁴, but the competition concerns have still not been completely done away with. The merged entity enjoys a disproportionate influence over the broadcasting market. This means it exercises unilateral control over the prices and can easily drive out competitors, putting consumers’ interests at risk.²⁵

2. Concern of collusion

In effect, the BCCI acts as a single seller on behalf of all the franchises, essentially acting as a cartel of clubs. Such sale agreements are construed to be a horizontal agreement under Section 3 of the Act.²⁶ This section further prohibits agreements that cause AAEC in the relevant market. In the conventional broadcast auctions in India, pre-defined packages are offered to buyers. Few major broadcasters can easily collude to tacitly divide these packages. Resultantly, bidding wars are minimised. In the case of Cartelisation by Broadcasting Service Providers²⁷, the CCI investigated bid rigging between Essel Shyam Communications Ltd. and Globecast India Pvt. Ltd. on tenders for “uplink services contracts” used for broadcasting of IPL. It held that the alleged parties engaged in cartelisation and did not compete in the tender effectively because their prices were pre-decided. The anti-competitive outcome of such collusion is that the media houses save huge sums of money, and the league earns much less revenue than it could have under normal competition. Such a “monopolistic package” given collectively empowers media houses to retain supra-competitive rents.²⁸ To mitigate the problem of collusion, regulators maintain a “no single buyer rule” whereby at least two broadcasters must get broadcasting rights. However, it can act as a double-edged sword. It theoretically prevents a monopoly but also creates a more conducive setting for competitors to coordinate even more closely. The rule seems like a mere formality as competitors negotiate prior to the auction, where bidders tacitly agree who takes what. In practice, no single buyer rule can eliminate monopoly but still result in bid splitting, which yields an AAEC.

3. Consumer harm

The advent of new platforms for the dissemination of media in the past few years has inevitably led to the rise of sport as a global media property.²⁹ Among all sports, cricket has the largest number of aficionados in the country³⁰, making the broadcasting rights of its formats highly lucrative to broadcasters. However, when dominant enterprises like the BCCI sell collective rights, the number of broadcasters remains limited. These media houses spend huge sums of money on acquiring these rights and, as a result, offer such telecasts to the consumers at inflated prices and often as bundled packages. For instance, after obtaining the exclusive digital rights for IPL from 2023 to 2027 at 3.02 billion US dollars, Viacom 18’s JioCinema allowed free streaming of matches for two years. This move seemed like a lure for the consumers, as they later shifted to a subscription-based manner, starting at Rs 149 per month. Additionally, major broadcasters like Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises released revised Reference Interconnect Offer effective 1 February 2025. Under which, the SPNI and Zee have increased their rates by 10—15 per cent whereas JioHotstar has increased its prices by a staggering 18 per cent.³¹ One of the primary reasons cited for this increase was the soaring cost of obtaining exclusive content in the sports market. This shows that ultimately the buyers are compelled to bear high prices that go into acquiring these exclusive rights, coupled with negligible alternatives between different broadcasters.

Suggestions

Given the anti-competitive concerns discussed at length above, certain suggestions are offered that would help mitigate the problems related to collective selling while balancing the interests of broadcasters, consumers, and enterprises like the BCCI.

1. Combinatorial auction approach

This approach can be employed to neutralise the cartel incentives between bidders in a sports broadcasting auction.³² “In a combinatorial auction, bidders’ express preferences by bidding on bundles (combinations) of discrete items. The auctioneer’s goal is to choose a set of non-overlapping winning bids that maximises total value or revenue.”³³ Instead of fixed bundles, bidding can be done on combinations of games and rights. For instance, the customised bids can look like “X” bids for TV and digital rights together, “Y” bids for digital rights only, whereas “Z” bids only for weekend matches and finals. Finally, the algorithm selects the bid that maximises the revenue. This method deters cartelisation in a twofold manner. Firstly, the bidder can bet on various custom bundles. Because the possibilities are endless, bidders cannot coordinate on a small set of pre-decided packages. To form a cartel, one has to anticipate every bid, which is practically impossible. Secondly, endogenous allocation results in uncertainty among the bidders. It compels them to bid aggressively for the packages they value rather than relying on a shared agreement. This approach addresses the relevant competition issues, like preventing coordination among bidders and results in higher revenues than a fixed package auction.³⁴

2. Unbundling of rights

As a standard practice, collective selling is allowed under certain conditions, like unbundling of rights to prevent monopoly by broadcasters.³⁵ “Unbundling broadcasting rights into multiple lots ensures that competition authorities can promote entry and prevent a single broadcaster from acquiring full exclusivity, thereby reducing foreclosure risks.”³⁶ However, the unbundling employed in India currently seems like a mere procedural compliance rather than actually focusing on its substance. The BCCI divides rights mainly through platforms, i.e., television rights and digital rights. Even though one kind of unbundling is done, the acquisition of such rights is still highly capital-intensive, so much so that only giants like Disney Star and Viacom 18 can participate. Resultantly, the market structure has become duopolistic and results in structural foreclosure of competition in the market. Rather, to achieve the intended aim of this principle, the unbundling of rights should be done into smaller and distinct packages to make it accessible to mid-sized broadcasters. Rights could be unbundled based on match clusters, time-based bundles, linguistic bundles, etc. This would promote diversity between broadcasters, along with a real chance for them to compete in this market.

3. No single-buyer rule

While EU and USA jurisdictions have imposed this rule in the case of collective selling of rights, India does not deem it mandatory. The sale of IPL media rights for the 2018—2022 cycle was done to Star India in entirety, i.e., for both television and digital rights.³⁷ An attempt to adopt the rule was made in the 2023—2027 cycle, where digital rights and television rights were auctioned separately.³⁸ But after the Reliance-Disney merger in 2024, the new entity formed acts as a single buyer yet again. The importance of this rule was discussed in the German Bundesliga case, where a condition was imposed on bidders that prohibited them from acquiring more than one-third of live matches’ distribution rights. It was held that this rule helped in opening the broadcasting market to new entrants in the subsequent rounds, which might have been foreclosed otherwise.³⁹ Ultimately, this rule has actively fostered true competition between the broadcasters and expanded consumer voice by restricting monopoly.

Conclusion

In a market as concentrated as India’s market for sports broadcasting rights, the recent Reliance-Disney merger raises concerns over how fair competition is to be secured. While the CCI red-flagged the merger, it limited its intervention to behavioural commitments on pricing and bundling. However, the structural issues of the collective selling model, which has enabled two companies in the market to hold the largest chunk of rights, have been left unexamined. Even in the CCI’s order against the BCCI’s exclusivity clauses in the Barmi case⁴⁰, it was discussed to a limited extent. This gap in regulatory scrutiny is worrisome, given the huge stakes. Indeed, the current format of bundled and exclusive selling of rights generates high revenues. On the downside, it forecloses the market for possible entrants and helps solidify a duopoly in the Indian market. This facilitates coordination in the market and enables maintenance of inflated subscription costs, rendering consumers and advertisers at a disadvantaged position. Comparative analysis of the EU and the USA demonstrates that the collective selling model cannot be completely done away with; however, both jurisdictions have accepted that if left unchecked, the method has more competitive harms than benefits. India must draw from such lessons and initiate a more extensive inspection of the model and put in place the needed reforms. Adoption of the combinatorial auction approach, unbundling of rights into multiple packages in terms of the number of matches, etc. could help in mitigating the competitive concerns in the market.