Critics are not too off the mark when they accuse IPL of being more about money than about cricket. Blame Lalit Modi for that. Through his business and managerial acumen, Modi has ensured that money pours from different directions – internet rights, theatrical screening in bars, after match parties, sponsorships on strategic time-outs and even zeppelins. As per a Brand Finance study, the estimated total worth of IPL is an astounding $4 billion. To achieve this, it is said that Modi has handled broadcasters, sponsors, advertisers and even cricket fans quite shrewdly. SET MAX capitulated on Modi’s demand, in a tug-of-war that reached the court, eventually raising the value of IPL’s ownership right from $1 billion to $1.6 billion. But the TRPs of IPL have plummeted from 8.21 last year (when it was in South Africa), to 5.48 by the second match this year. The very excesses of IPL ensure that the franchisee model hinges more on valuations rather than actual revenue. A recent report by Sporting Intelligence confirms that IPL is the second highest paid league in the world on a pro-rata basis, beaten only by NBA. Royal Challengers Bangalore is the richest team, with each player earning £56,833 on an average per week!
The new franchisees of Pune & Kochi have been sold at a mind-boggling $370 million and $333.3 million respectively. Ironically, only two of the current ones have seen profits so far. Promoters have started to drool at the prospect of building brand equity to maximise valuations in case of a stake sale. Players are equal to the task too, as is visible with an icon player like Yuvraj Singh willing to explore options after the mandatory 3-year period expires. Clearly, the on-field action seems to be paling as compared to the action off it; and a reality check of IPL’s excesses seems imminent.
Sayan Ghosh
For more articles, Click on IIPM Article.The new franchisees of Pune & Kochi have been sold at a mind-boggling $370 million and $333.3 million respectively. Ironically, only two of the current ones have seen profits so far. Promoters have started to drool at the prospect of building brand equity to maximise valuations in case of a stake sale. Players are equal to the task too, as is visible with an icon player like Yuvraj Singh willing to explore options after the mandatory 3-year period expires. Clearly, the on-field action seems to be paling as compared to the action off it; and a reality check of IPL’s excesses seems imminent.
Sayan Ghosh
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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