Friday, May 15, 2009


Ritul Singh | IIM Shillong

Indian Premier League; a twenty- twenty cricket format; is a competition created by BCCI. Chairman and Commissioner of this league is Lalit Modi; VP of BCCI. It was started as in competition with Indian Cricket league but now it is far ahead of ICL and is most viewed T20 game. The first season was started on 18th April 2008, in which Shane Warn lead Rajasthan Royals won the tournament. The second season is in progress and is being held in South Africa because of Indian General Elections in India. There was a large hue and cry for this decision but IPL pointed on UPA lead government for this decision. Though the matches are being held in SA but the timing of all the 59 matches are as per last season.
IPL a Round Robin Tournament
In the round robin format, every team has to play against every other team. IPL and IPL2 both follow two rounds of round robin. Hence there are a total of 56 matches. For every match the winning team gets a 2 point and the losing team gets no point, if the match is a no result or a draw then both the teams gets one point each. Every team also gets a Run Rate (RR), based on how well they won or how badly they lost. Based on the points each team gets, they top four team advances to the next round which is the semi-finals and from then on it’s a knock out method that is being followed. The schedule of IPL2 was such that it coincides with the start of the first round of IPL (April 18). But this the time the schedules were made a bit tighter with two matches almost every day and hence the tournament ends on May 24th as against June 1st of the previous time.

Future Expansions
IPL is planning to have 11 teams in its next season. Ahmadabad and Kanpur teams are most likely to play in next season. Anil Ambani and Sahara Group have shown interest in these teams. A North East team is also likely to be formed as to promote cricket in this part of India. Again in 2012-13 season two more teams are likely to be formed. They may be another Delhi (Localized to Gurgaon, Faridabad, Noida and Greater Noida) and Mumbai (Navi Mumbai, Pune).

The total revenue of this competition are directed towards a central pool and then it is distributed to IPL, franchises and prize money; 40%, 45%, 6%accordingly. After 2017 this share will be 50%, 45% and 5%. For each franchise revenue comes from Broadcasting rights, Team sponsors and gate receipt while the expenses are in form of franchise fee, team expenses, advertising, promotion and administrative expenditure. So total profit or loss can be calculated from following formula:
P/L= (Broadcasting Rights + Team Sponsors + Gate Receipt) - (Franchise fee + Team Expenses + Adv & Admin Expenses)

Tough Road for IPL
For IPL road ahead seems to be a tuff one as BCCI has found itself with many conflicts with other cricket boards and clubs. Many boards have feared that sponsors of the IPL (and its teams) that directly competed with their sponsors would jeopardize already existing arrangements. Few smaller boards like (WCB) feels that players are more motivated to join IPL as compared to their national teams because of high payouts by IPL sponsors as compared to cricket boards. Media rights also seem to create problem for IPL as Print media objects putting still images on websites of the broadcasting media. It also seems to have some problem with the location of organizing as it is being organized in South Africa; few people have started doubting on its name and motive.

The Power of Forces
As we have seen this year that government has a crucial role in this and if it imposes same thing again in future also then it will lose its charm as already many people reacted negatively towards this change of location. ICC is also planning to have a world T 20 League if this concept clicks then it will create problem for the IPL. The regional acceptance is very crucial in this as if teams will focus on not only the city but a region whole then we can have increased viewer base.

Is it local having Global touch?
As each teams are having many local players who haven’t even played at national level so the biggest question arises that people watch IPL matches just as a game or to support their home team? Marketers are trying their best to give it a global touch as teams are having big names in teams and many coaches are foreigners. Marketers are treating it as an opportunity to promote their own brands. As we know in India cricket is like a religion and marketers like Malya (Royal Challengers: Promoting his famous liquor brand Royal Challenge) and India Cements (Super Kings: Promoting its brand Coromandel King) are using this pitch for their own benefit. Broadcasting channels are also treating it as an opportunity to gain market share as viewership of traditional form of cricket is decreasing significantly. Approximately 80% of viewers like this three and half hour of cricket formats. These channels are also betting on the fact that big players in franchise like Malya, SRK who have put in money will build their teams
into mega-brands and ensure ample drama and media mileage for IPL. There will be ample opportunity for entertainment channels in for of Shah Rukh Khan or Preity Zinta putting on a show.

Future Outlook
Over 98% of the revenue for IPL is generated through the television viewership and so the organizers are feeling that overall revenue will not take a hit. Also this year the television spot rates have been almost doubled and over 70% of it is already sold out. But does this signify that this will continue in the future? Most of the viewership is created due to the success of first year IPL. It will only take a couple of foreign tours to tarnish this image, if it could not keep up with the local touch. It is vital that every team has to connect to his audience, and distance is not going to make this job any easier. The need of the hour is to connect to the local audience as much as possible. Although television is doing its bit, it is vital to leverage on various other forms of marketing activities to spread the awareness especially among the rural community. For example, Chennai Super Kings should reach its appeal to entire Tamil Nadu. They need to bring the ground experience by projecting the games on big
screens either in the colleges or cricket stadiums etc. These kind of activities must be carried out by all the teams to increase the overall viewership which will increase the brand awareness, which I feel is the first and the foremost step to be taken by any brand to increase its brand equity.


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