CCI’s Indian Premier League, which seeks to cash in on the enormous popularity of Twenty20 Cricket, has got an overwhelming response from sports buffs & businessmen. The glamorous winners of IPL franchises have to figure out how to turn the teams they own into a money-spinning proposition
he rights to control India's eight Twenty20 Premier League teams have been sold for a staggering $
1.749 billion (Rs 6996 crore). The bidding concerned franchises in Mumbai, Bangalore, Hyderabad, Chandigarh, Chennai, Delhi, Jaipur and Kolkata. Film stars Shah Rukh Khan, Juhi Chawla and Preity Zinta were part of consortia
that won 10-year rights deals. The tournament was launched by the Indian cricket board (BCCI) as a direct competitor to the Indian Cricket League, launched last October, which it does not recognise. Mumbai, for whom Sachin Tendulkar will play, went for the highest amount, with billionaire Mukesh Ambani winning control. The
eight teams were picked up for a sum far higher than the reserve price of $50 million each. Reliance Industries chairman Mukesh Ambani has acquired the Mumbai franchise in IPL for $111.9 million over a 10-year period while the flamboyant chairman of UB Group has won the Bengaluru Franchise for $111.6 million. SRK’s Red Chillies Entertainment won the Kolkata franchise for $75 million. The Chandigarh franchise went to Preity Zinta and Ness Wadia, together with Apeejay Surrendra’s Karan Paul and Dabur scion Mohit Burman for $75 million. Other franchise winners include Deccan Chronicle, which won Hyderabad for $107.01 million, GMR bagged Delhi for $84 million and India Cements won Chennai for $91 million. Emerging Media, a group of businessmen that owns Investors in Cricket, picked up the Jaipur franchise for the lowest bid of $67 million.
Nearly 60-65 per cent of their costs have been covered through sale of television rights to Sony-World Sports Group (WSG) for $1.026 billion, including $108 million by BCCI. IPL is yet another show of strength for cricket and is set to become the biggest money-spinner in cricket today. The league has been modelled on other Professional sports leagues like the English Premier League (EPL) and National Basketball Association (NBA). IPL will kick start its inaugural season on April 18, 2007, with 59 matches across 44 days. Some of the biggest names in international cricket today, such as Ricky Ponting, Kumar Sangakkara and Sachin Tendulkar, have all signed up to play in IPL, and so have Shane Warne and Glenn Mc-Grath. The top 80 players in the ICC rankings will be playing in IPL, according to BCCI
IPL is also further proof that cricket still rules the roost for marketers, who want visibility for their brands. In all, the board has raked in nearly $724 million from the franchise bids alone, and adding income from media, IPL has fetched it nearly $1.75 billion (approx. Rs 7,000 crore). This amount can only go up once the bids for title and shirt sponsorships come in.
BCCI has also sweetened the deal for the franchises by giving them media income for a longer duration. According to BCCI secretary Niranjan Shah, “We’re sharing 80% of the media income with the franchises for the first five years, and it’ll be slightly lower for non-media income.” This amount works out to be nearly $80 million per franchise per year, going a long way in boosting profit hopes for franchise owners.
In addition, franchises will get to keep 100% of ticket revenues, which previously went to state associations. Licensing and merchandising are also set to be a huge opportunity for franchises to cash in on. Commercial deals, a huge chunk of which comprise licensing and merchandising, account for nearly a third of the revenues for the top 10 European football clubs, according to the Deloitte Football Money League 2007.
Opinion is, of course, sharply divided among the bidders — depending on which side of the fence they
ended up on — whether there’s a pot of gold at the end of the rainbow.
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