Why Mukesh Ambani Dropped Out Of Chase For IPL TV Rights

The joint venture between Mukesh Ambani's Reliance and US media giant Paramount Global focused on winning rights to digitally stream Indian Premier League.

Mukesh Ambani's group ultimately dropped the pursuit of television broadcast rights to India's top cricket league that Walt Disney Co. secured for $3 billion as the Indian conglomerate saw limited opportunity for long-term profit from the legacy platform.

The joint venture between Ambani's Reliance Industries Ltd. and US media giant Paramount Global instead focused on winning the rights to digitally stream the lucrative Indian Premier League, betting its advertising revenue will be four-fold bigger than that for TV in five years, a person familiar with the group's strategy said. The view was that television would struggle to deliver double digit growth, according to the person, who didn't want to be identified discussing deliberations that were private.

While Viacom18 Media Pvt., the Ambani-Paramount JV, bid for TV rights in the initial rounds of the auction, this person said the focus was always on ensuring it secured digital rights. A representative for Reliance Industries declined to comment on the auction strategy.

Viacom18 paid Rs 238 billion ($3.1 billion) for the rights to stream the IPL tournament, one of the world's most-watched sporting events, almost on par with what Disney shelled out. The decision gels with Ambani's ambitions for his digital unit Reliance Jio Infocomm Ltd. The billionaire, currently India's richest man, wants to create a consumer ecosystem that marries entertainment and e-commerce to lure local users who are increasingly hooked to their smartphones.