Amazon pulls out of IPL cricket streaming rights bidding

Amazon won't be bidding for the five-year IPL media rights, a person familiar with the matter told TechCrunch, a surprising last-minute move that leaves the much anticipated prized auction largely to Disney and Reliance.

The e-commerce giant was one of several tech giants that had been preparing to participate in the Sunday auction, which will grant the cricket media rights for the year 2023 through 2027.

Amazon, which has deployed about $6.5 billion in its India business and operates Prime Video streaming service, has relayed to the BCCI, the cricket board overseeing the Indian Premier League tourney, that it won't be participating in the bid, the person said, requesting anonymity as the details are private. Media reports as early as this morning were drumming up a supposed war between Reliance's Mukesh Ambani, one of Asia's richest men, and Amazon founder Jeff Bezos.

Amazon did not respond to a request for comment. Bloomberg News reported earlier Friday that Amazon was thinking of pulling out of the auction.

Tens of millions of people around India watch IPL, one of the most popular cricket tournaments, where 10 teams face off against one another over six dozen matches. The popularity of the IPL tournament, which runs for about two months, has helped Disney set several global streaming records.

Ambani's Reliance, which operates the largest retail chain in India and also the largest telecom operator, has been gearing up in recent months to go all-in for the cricket rights. Ambani-backed TV network Viacom18 recently partnered with -- and raised capital from -- James Murdoch and Uday Shankar's firm Bodhi Tree. The duo previously ran Star India and their bet on Hotstar and cricket streaming made the Indian app a crown jewel in Disney's portfolio. Now they are going against their former firm.

Disney, which currently holds the streaming rights, and Mukesh Ambani-controlled Reliance are expected to go neck-to-neck for the auction, which industry analysts expect could be worth $4 billion to $7 billion.

Star India, a Fox subsidiary that became part of Disney following the acquisition, won the last five-year rights auction with a $2.5 billion bid in 2017. Hotstar, which has expanded to Southeast Asia, has played an instrumental role in helping Disney amass 200 million subscribers worldwide. Many analysts have recommended Disney back out of the bidding because Indian subscribers don't bring much revenue to the firm, making it difficult to justify the high price tag for the rights.

“I would like nothing better than if they didn’t get the IPL rights and walked back their subscriber number,” Michael Nathanson, a senior media analyst at MoffettNathanson, told WSJ earlier this month. “It would indicate a focus on financial discipline and return on capital.”

Google and Facebook, which made a significant bet for the five-year rights last time, are also unlikely to make a major bid, people familiar with the matter said.

Winning IPL rights would have allowed Amazon to significantly draw a large number of viewers to its streaming app, Prime Video. The company's service, which already airs some cricket matches, is among one of the most popular on-demand video streaming apps in the South Asian market, thanks in part to an increasingly growing number of original titles.

"OTT market in India is highly competitive with ~40 platforms. Disney Hotstar is the OTT leader with best sports content (+ IPL cricket). Hotstar subscriber base is ~50 Mn (~30% of Disney + subscriber base). Amazon Prime has seen strong growth with high investments in original content. Amazon Prime Video subscriber base is ~16 Mn & Netflix at ~ 5.5 Mn paid subs. Sony Liv/Zee merger has created another strong player," analysts at Bernstein wrote earlier this year.