Shares of Sun TV Network Ltd., owner of the Sunrisers Hyderabad Indian Premier League team, rose as the company’s revenue from the T20 tournament is expected to rise after the latest media rights deal.
Star India on Monday won television and digital media rights for the cricket league for Rs 16,347 crore for five years. That compares with Rs 8,200 crore that Sony Pictures Network paid in 2008 for 10 years for only TV rights. Revenues from media rights and sponsorships are shared between IPL and its franchisees. Sun TV’s stock rose as much as 5.8 percent after the deal was announced.
CLSA, in a report ahead of the deal, had said that Sun TV’s IPL revenue could rise 30 percent from Rs 143 crore last year assuming the media rights were sold for Rs 9,500 crore. That would also bring in a profit of nearly Rs 53 crore against a loss of Rs 22 crore last year. A price of Rs 12,500 crore would increase Sun TV’s revenue by 52 percent, the brokerage said.
IPL media rights were actually sold for a much higher price than CLSA’s estimates. Sun TV thus stands to gain even more.
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