Indian Premier League (IPL)
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Indian Premier League: The economics of
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IPL-6 may clock 27% more in ad revenues By Samidha Sharma, Times of India, 2013/03/15 |
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Advertising revenues
Multi Screen Media (MSM), the official broadcaster of Indian Premier League (IPL) has brought on board a total of eight sponsors for the sixth edition of the Twenty20 tournament, which would help it rake in Rs 200 crore more over last year, after lowering its ad rates by 10-15%. Three more sponsors are expected to join over the next two weeks.
The presenting sponsors — PepsiCo and Vodafone — have shelled out around Rs 40-60 crore each while the associate sponsors, which include Tata Photon, Karbonn tablets, Godrej, Samsung Mobiles, Panasonic and Usha Appliances, have paid around Rs 25-30 crore each for being seen on the channel during the tournament.
MSM is looking to earn Rs 950 crore as advertising revenue from IPL-6, up 27% from Rs 750 crore it garnered last year, a senior executive from the company told TOI.
This will be the first time that the IPL will have three feeds — the regular one on SET max, while Sony Six will broadcast a Hindi feed along with an HD one.
Some of the other sponsors likely to be signed on soon for the tournament, which starts on April 3, are Cadbury and Havells — both have had a long-term association with the IPL. This year, MSM has two presenting sponsors and is expected to close nine associate sponsors, up from only five which it managed last year. The channel has also struck large deals with Coca-Cola, Parle Agro, Marico, Berger Paints and Airtel, besides others, filling 70% of its inventory.
“Last year, we had increased the ad rates but could not sell the entire inventory. Our strategy to reduce rates has worked very well and we have seen the interest levels go up. Advertisers from all sectors are on board this year, signaling a revival in sentiments,” said Rohit Gupta, president, MSM.
During 2012, a 10-second ad spot during the IPL had a price tag of Rs 4.5-5.5 lakh, making it a highly premium property. However, reduction in rates has made it far more affordable, said media planners who buy TV airtime for advertisers. “If TV ratings had to fall, it had to fall last year. Now they have stabilized. It is definitely value for money at this rate and with lesser risk,” said Ajit Varghese, MD (South Asia), Maxus, which has bought airtime for telecom major Vodafone.
The IPL reached 170 million eyeballs and clocked an average rating of around 3.27 last year, according to TAM Media Research. MSM’s Gupta said he is expecting the reach to further grow this season. “If there is a big product launch or a new ad campaign, this is a large platform which is a must for any brand. It is a property which is targeted at male audiences, so it works well for brands which directly communicate with this audience group,” said Basabdutta Chowdhury, CEO of Platinum Media, a division of media buying group Madison. This year, soft drink giants PepsiCo is the new title sponsor of the IPL, having paid Rs 396 crore for the next five seasons.
Spot fixing case, 2013
IPL: 2013-2014
The IPL numbers
IPL broadcast rights
In 2008, the consortium of India's Sony Television network and the Singaporebased World Sports Group (WSG) had secured the rights of the IPL for ten years at a cost of more than $1 billion.As part of the deal, the consortium would pay the BCCI $908 million for the telecast rights and $108 million for the promotion of the tournament. However, in a reworked deal next year, BCCI signed a new deal with MSMPL (Multi Screen Media Pvt Ltd) and World Sport Group (WSG) for Rs 8,200 crore with 80% of the amount to come from MSMPL. Later WSG exited the deal after a one-time payoff.
IPL title rights
DLF had bought the title rights of the IPL for five years in 2008 for Rs 200 crore.In 2013, Pepsi bid for the rights for the next five years and won it at Rs 396 crore.
IPL business model
IPL runs on a Central and Local pool of sponsorships for revenues. Broadcasters, tournament sponsors, title rights holders and bid monies form the central pool. Gate money, in-stadia advertising, franchise sponsors and merchandising make for the Local Pool. The Central Pool revenue is shared by all eight franchises on a percentage basis. The franchise has to fend for itself where Local Pool is concerned.
Future
The players from Royals and CSK franchise cannot be bought by or absorbed in any other franchise. Each team has a limit of 26 players and a fixed purse. For CSK and RR players to participate in IPL, the BCCI will have to float a tender for two fresh teams. There is no restriction if CSK and RR want to sell their franchises ahead of the coming season, after BCCI clearance. A full-fledged auction of all players is now scheduled after the 2016 edition of IPL.Both Royals and CSK have 26 players each and so do most other franchises. CSK has one-year contracts with most of its cricketers, who can go back into the auction pool but other franchises will have to off-load players to be able to buy them. With Kochi Tuskers winning their arbitration with BCCI, they're free to participate in IPL. Some players can be included in the Kochi franchise if they agree to play the tournament. However, one new franchise will still have to be auctioned. If Kochi Tuskers are unwilling to play, BCCI will have to auction two new franchises. IPL broadcast rights are up for a resale in 2017.
IPL jinxed for team owners?
The Times of India, Jul 17 2015
K ShriniwasRao
A leading Mumbai businessman, once interested in buying an Indian Premier League franchise today wants nothing to do with the glamorous cricket league. He believes IPL is bringing bad luck to team owners. Dramatic as it may sound, a quick look at where the owners have landed up post their IPL buys tends to lend credence to this expression of superstition. The businessman was insistent: “Vijay Mallya, Subrata Roy , Venkattram Reddy , the Maran brothers, even Lalit Modi -just look where they are.Isn't it eerie?“ As facts go, the businessman isn't off the mark. Subrata Roy is in jail, Reddy was ar rested, Mallya is in trouble with the authorities, Maranowned Sun TV is having prob lems with the home ministry over security clearances, Lalit Modi is wanted by ED, and Sunanda Pushkar is dead. Even love has gone missing from Ness Wadia and Pre ity Zinta's lives. And N Srinivasan has lost his prized BCCI president's chair.
Wait, not just Srinivasan.His son-in-law Gurunath Meiyappan, a mere cricket enthusiast according to his father-inlaw, has been pulled up by the Supreme Court for talking to bookmakers and banned for life from cricket. Ditto with another part owner, Raj Kundra of Rajasthan Royals.
Those who have bucked the trend are movie star Shah Rukh Khan, India's biggest businessman Mukesh Ambani and his wife Nita, and the Delhi franchisee GMR.
Heck, the league itself is now in massive trouble. The judgment delivered by the SC-appointed Justice Lodha committee has reduced the IPL to just six teams of which, again, some are in serious financial trouble.
T Venkattram Reddy, the strapping boss of Deccan Chronicle Holdings Ltd, from Hyderabad, lost his team Deccan Chargers after cases of financial fraud with several banks began surfacing post 2011.
And the owners who replaced the team in Hyderabad Maran Brothers of Sun TV are also struggling. Once the eyes and ears of former DMK chief M Karunanidhi, the Chennai media barons are no longer politically protected.Apart from the cloud over their TV channels, they have had to sell their airline SpiceJet back to the original promoter.
Is this the reason why Parth Jindal of Bangalore-based JSW Group doesn't want to get into the IPL?
