Broadcaster faces financial strain from ICC media deal amid Champions Trophy stalemate

Star India, owned by Walt Disney, is feeling the strain from its substantial $3 billion media rights deal with the International Cricket Council (ICC) for the 2024-27 broadcasting cycle.

The deal, once a major acquisition to air ICC’s top global cricket events, is now proving costly due to various financial and viewership challenges.

In an attempt to capitalize on the cricket fervor in India, Star India secured rights to broadcast all ICC tournaments, including marquee events like the Men's T20 World Cup, for the next four years.

However, lower-than-expected viewership during the recent 2024 ICC Men's T20 World Cup, held in the United States and the West Indies, has put a dent in Star India’s financial outlook.

Poor viewership figures in India, attributed to less favorable match timings and weather disruptions, led to significant advertising revenue shortfalls.

USA qualified for the Super Eight stage of the 2024 T20 World Cup, after their final group game against Ireland was washed out in Florida.ICC

According to a report by The Economic Times, Star India on Tuesday reported a standalone net loss of Indian rupees ₹12,548 crore (around $1.5 billion) for the financial year ending March 31. In a regulatory filing, the broadcaster attributed this poor financial outcome to a ₹12,319 crore provision for an "onerous contract" with the International Cricket Council (ICC).

In a statement, Star India acknowledged that it anticipates revenue from future ICC broadcasts to fall short of the substantial costs involved.

"The company has estimated the contract with ICC to be onerous as the expected revenue from customers relating to this right as and when the related event is broadcasted/streamed is likely to be less than the cost involved in broadcasting and streaming these events and hence has estimated a loss from future events relating to these media rights to be Rs 12,319.31 crore as of 31 March 2024," Star India said.

Star India’s assessment could evolve with time, given the uncertainties in projected viewership and advertising income.

India's Rishabh Pant hits a four during the 2021 T20 World Cup match against Pakistan in Dubai.Reuters

Adding to Star India’s woes, escalating political tensions between India and Pakistan have introduced further complications that could potentially disrupt the profitability of ICC tournaments.

Impact of Pakistan boycotting India matches

According to media reports, Pakistan is considering a strong response to India’s reluctance to send a team to the 2025 ICC Champions Trophy in Pakistan. The Pakistani government is weighing a policy to restrict its teams from competing against India in ICC events if political issues remain involved in sports.

Historically, India-Pakistan clashes during ICC tournaments have generated immense revenue due to the intense fan interest in these matches.

Since the 2013 Champions Trophy, ICC has ensured that the two teams consistently play each other in every global event, making these showdowns the ICC’s prime attraction and revenue source.

According to a report from the Indian Chambers of Commerce and Industry, these high-stakes encounters have generated around 10,000 crore rupees (roughly $1.3 billion) in the last two decades.

If Pakistan proceeds with its proposed boycott against India in ICC events, the implications could be significant.

"If you play the Champions Trophy without India, or Pakistan, the broadcast rights aren't there, and we need to protect them," Richard Gould, CEO of England and Wales Cricket Board (ECB) said during his visit to Pakistan in October.

The absence of India-Pakistan matches could further impact Star India, which is already seeking renegotiation of its ICC deal to mitigate losses.

As ICC contracts are heavily reliant on high-profile encounters, missing out on India-Pakistan games would likely compound Star’s financial burden and impact ICC’s distribution of revenue among member nations.

Any decrease in ICC’s financial distributions to member countries could have far-reaching effects, especially on cricket boards that rely on these funds.

The Board of Control for Cricket in India (BCCI), which receives the largest share of ICC revenues, would also face financial losses if revenue from ICC events decreases due to the absence of India-Pakistan matches.

Star India’s ambitious ICC media rights deal, initially viewed as a strategic move to capture India’s cricket market, has turned into a potential liability.

The unexpected loss of viewership, combined with the possibility of a Pakistan boycott, creates an uncertain future for Star India, the ICC, and the broader cricketing landscape.

Both broadcasting companies and cricketing boards around the world are likely to be affected if the stalemate between India and Pakistan continues, leaving ICC scrambling to protect the commercial viability of its tournaments.