Having buyer's remorse or struck by winner's curse?

Last week saw the Board of Control for Cricket in India (BCCI) auction the media rights for the Indian Premier League (IPL) for 2023-27. In all the dhamaka, it has thrown up two big winners: Disney Star, which will be paying ₹23,575 crore for India TV rights, and Viacom18, which will be coughing up a cool ₹23,758 crore for digital rights. The hotly contested battle for the rights ended up netting BCCI a nice pile of moolah – ₹48,390 crore. Times Internet, a part of the Times Group that publishes this paper you hold in your hands, won part of Package D, that is, rights for overseas territories.

All this translates to a whopping increase of almost 200% over the ₹16,347.50 crore that DisneyStar had paid for the five years of 2018-22.

But a lingering question remains. Which of the two big winners will end up suffering from the notorious Buyer’s Remorse? Or will it be the more severe form that goes by the name of Winner’s Curse that will afflict DisneyStar and Viacom18?

The concept of Buyer’s Remorse comes from study of post-purchase dissonance, something that social psychologist Leon Festinger postulated way back in 1959. Imagine driving out of a car showroom with a brand new SUV. You feel thrilled and happy. But at the back of your mind you are wondering if you made the right decision. Should you have waited for a better offer?

Festinger proposed that we manage cognitive dissonance by looking for positive reconfirmation – ‘Yes, the review said this car is actually the best in its class!’ – or we shut out negative comments. Post-purchase dissonance manifests itself in the shape of Buyer’s Remorse.

A more dangerous version of this remorse is in the domain of mergers and acquisitions, where the winner ends up with a curse. A famous story, a real one too, told in Deepak Malhotra and Max H Bazerman’s 2007 book Negotiation Genius, is of United Airlines, which was about to get into a bidding war with American Airlines in 2000 for the acquisition of US Air. Whoever won the bid would have had to face huge issues – essentially, get afflicted by the Winner’s Curse.

So, the United Airlines CEO decided to write an open letter to his staff laying out why the company would not bid for the struggling carrier, knowing fully well that the letter would reach the competitor, American Airlines, in a few minutes. The competitor got the message and did not bid for the airline. Both the airlines were saved.

I don’t think the two winners here – DisneyStar and Viacom18 – are going to suffer the winner’s curse. Maybe a bit of buyer’s remorse. Nothing more. Let me explain why.

While it is true that the bid amount this year is almost three times what it was during 2018-22, many things are not the same. The number of matches are significantly higher – from 60 to 74. IPL has been established as the only pan-Indian media property – other than RRR and Pushpa: The Rise, perhaps. So even if TRPs (television rating points) have plateaued a bit, they are still huge.

The number of TV-owning households continues to rise. A 2.5 TRP in 2016 cannot be compared to a 2.1 TRP in 2022. The ubiquitous nature of smartphones and video consumption through smartphones is going to offer new avenues for monetising IPL. Add to all this the stature of hosting the world’s most popular cricket league a TV network or a digital platform will gain. So many other properties can piggyback on IPL. Remember the rise of Star Plus and its saas-bahu serials on the back of the very ‘expensive’ Kaun Banega Crorepati?

What about Buyers Remorse? There is always a tinge of doubt about someone having paid a bit too much. Only time will tell who will have a tinge of buyer’s remorse. For the last laugh – the Winner’s Boon – certainly goes to BCCI.

The writer is founder, Brand-Building, and author of Spring: Bouncing Back From Rejection.


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