IPL media bid winners in bank guarantee talks

HDFC Bank, ICICI Bank and State Bank of India (SBI), three of the country's most valued financiers, are among the lenders likely helping Reliance-owned Viacom18 to furnish bank guarantees for the recently won digital media rights of the Indian Premier League (IPL). BNP Paribas and Deutsche Bank are among the foreign lenders likely offering the same facility to Disney-Star that won the television broadcasting rights, banking industry sources told ET.
Walt Disney-controlled Star and Viacom18 won packages A and B, respectively, in the just concluded round of rights auctions that valued the cricket league as the world's second richest sporting event.

Disney will spend ₹23,575 crore and Viacom18 ₹20,500 crore to telecast the games on the TV and digital media, respectively, in India until 2027.

To be sure, Viacom18 has won bids in other categories as well, and its total scheduled payments are in excess of ₹23,750 crore.

"Both companies need to submit bank guarantees (BGs) to fulfil their obligations toward the cricket board and are in advanced talks with more than half a dozen lenders to complete their respective deals," said a person aware of the negotiations.

Disney-Star and Viacom18 are collectively arranging for about ₹9,600 crore non-fund based guarantees that can be encashed by the BCCI if there are any issues with regard to payments during the course of the next five years.

Disney-Star is in talks with at least four banks - BNP Paribas, Deutsche Bank, HSBC and Standard Chartered Bank - for guarantees that will be renewed every year, people aware of the negotiations told ET. This will cover about 80% of the sum required to be paid for the first year of coverage, estimated at ₹4,715 crore.


"For the remaining 20%, the company may tap US-based lenders - like the Bank of America or JP Morgan," said a second person aware of the negotiations.

Viacom18, meanwhile, is in the process of finalising a deal with SBI, ICICI Bank and HDFC Bank. "These talks are close to conclusion," said a third person aware of the process.

Viacom18 and select banks did not respond to ET's mailed queries. Disney-Star, BNP, Deutsche, HSBC and Standard Chartered declined to comment.