Indian Premier League

BEST BRAND LAUNCHES OF 2008

INDIAN PREMIER LEAGUE

TATA NANO

Concept developed by Lalit Modi Concept by Ratan Tata is the is a very successful brand. most successful brand launched. It has taken cricket to newer heights.

It has become iconic name for certain things…

It already has two very successful The commercial success is yet to seasons. be proven. The concept was new but with proper vision it is a grand

Auto industry giants were sure that the car can’t be produced.

Introduction • Launched by BCCI on the line of Football’s English Premier League and National Basketball League (NBA) of the US. • Professional Twenty20 cricket league created and promoted by BCCI and backed by ICC. • 8 teams, 44 days, and 59 matches. • Total base price for auction was $ 400 million and fetch $ 723.59 million. • Most expensive franchise is owned by Mukesh Ambani - $ 111.9 million.

Contd • DLF Universal secured exclusive rights to the IPL title sponsorship worth Rs. 200 Cr (over $50 mn) for 5 years. • India’s Sony Television network and Singapore based WSG secured broadcasting rights at a cost of $ 1.026 bn for 10 years. • Bring income of $ 1 bn to BCCI over a period of 5 to 10 years, out of which 40% will go to IPL, 54% to franchise, and 6% as prize money until 2017. • Out of $ 1.026 bn, $ 918 mn to BCCI and $ 108 mn for the promotion of the tournament. • 20% would go to IPL, 8% as prize money, and 72% would be distributed to the franchisees until 2012.

So where is the money coming from….. Media Rights

• $1 Billion for 10 years • Sony

►

►

Central Revenues

Money raised by Franchises

Title Sponsorshi p of event Licensed Merchandi sed

►

► ► ► ►

Selling advertiseme nt for stadium Licensing products Merchandise sale Advertising on Tickets Gate Money

Franchise Bid Money ► ► ► ► ► ► ► ►

Mumbai($111.9 M) Bangalore($111 .5M) Hyderabad($10 7M) Chennai($91M) Delhi($84M) Mohali($76M) Kolkata($75M) Jaipur($67)

… and where is it going?? Money Source

BCCI

Franchises Players

Media Rights

20%

72% (equally divided)

8% (Prize Money)

Central Revenues

40%

54%

6% Subject to franchises wish

Money Raisers 20% by Franchises

80%

0% (Depends on the whims of the franchises)

Franchise Bid Money

Some hefty amount in the

Profit or Loss? Franchise

Revenues Expenses Profit/loss (in Crores) (in Crores) (in Crores)

Price (USD)

Mumbai Indians

69

85

Net Loss 16 $ 111.9 mn

Royal Challengers Banglore

45

88

Net Loss 43 $ 111.6 mn

Hyderabad Deccan Chargers

64

82

Net Loss 18

$ 107 mn

Chennai Super Kings

72.8

73

Net Loss 0.2

$ 91 mn

Delhi Daredevils

70.4

77

Net Loss 6.6

$ 84 mn

Kings XI Punjab

66

68.4

Net Loss 2.4

$ 76 mn

Kolkata Knight Riders

89

76

Net Profit 13 $ 75.09 mn

ICL vs. IPL: The Competitive Edge

1. Solid backing of BCCI and ICC with almost 10 huge stakeholders.

1. ICL has a single promoter Essel Group.

2. IPL is playing a safe game

2. Create a new league of talent from upcoming aspirants.

3. attractive business model involving high level risk

3. Level of risk is comparatively lower.

IPL better than ICL Exhibit 9: Is IPL Better than ICL

14%

8%

78%

To an extent

Yes

No

78% said Yes IPL is better than ICL, 14% said No, and 8% said to an extent it is better than ICL

The gambling dashboard BCCI

Franchises

Return

High

Sponsors Viewers

Players Size of Revenues

Low Low

High Risk

10

While it is a great bonanza for players… The Upside - Returns

• Earn at least Rs 80 lakhs ($200000) or more per season on average. • Bonuses and Prize Money from Team owners. • A great stage to show case skills and compete with the best in the world. The Downside - Risks

• Taxing on the already tight schedule of international cricket. Chances of injury lowering the tenure of career. • Conflicting commitments for the national boards. • Neglecting other forms of cricket

…the franchises are alternating between grinning and grimacing…. The Upside - Returns • Using the cricket property to promote other businesses, • To build the brand and enhance its valuation and then sell. • Enhance valuation of the franchise and then resell it - allowed after 3 years Downside - Risks • The Prize money if the team wins. • Financial Loss if the IPL fails to take off. Breakeven will not be possible before at least 4-5 years. • Lose key players to international cricket schedule.

…and the sponsors are walking a tight line as well The Upside - Returns

• Top-of-the-line spot rate charged from advertisers $16,500 per spot • The prime-time exposure, predictability of continued viewer interest is a substantial value The package. Downside - Risks • Spot Rate may go down if IPL is not a blockbuster. • Too much reputation at stake tied to the fortunes of the franchise teams as a whole

There’s a lot for U, Me and Hum…. The Upside - Returns

• Unlimited Masti and entertainment…. A free lunch • A great arsenal to make the case strong against the Saas – Bahu fans in the family. • A very good reason to increase productivity in office – Return home by 8 pm. The Downside - Risks

• Chances of family feuds over Channel viewer ship. • Capital costs in terms of additional investment in television sets.

Exhibit 10: IPL for me 6%

26%

31%

37%

• • • •

Day 45 masala of pourri

Only aggressive marketing

Futuristic strategy

Threat to TV and Cinema

37% feel that IPL is all about aggressive marketing, 31% said that great futuristic strategy, 26% feel that IPL is just a 45 days of masala, and 6% feel it is threat to TV and cinema

Global Appeal • One can not build the world`s most valuable sports brand without extending beyond the local fan base • Involvement of international star players will influence the level of support and interest. • Contracting the right stars and leveraging their association will be key to extending the reach of the IPL franchises outside India. • Eg Shane Warne, Andrew Flintoff and Kevin Pieterson

BUILDING A GLOBAL SPORTS FRANCHISE • IPL franchise brands have still someway to go before they can be considered alongside global brands like Manchester United and LA Lakers. • Following factors as key building blocks towards developing a sustainable global sports brand

1) LOCAL COMMUNITY • Build a solid base and ensure that they engage with their local communities. • The local fan base is the most loyal and will continue to support the club even when it is less successful while international fans will be more fickle.

2) Superstars • It is clear that certain players inspire supporters. • Sports fans will pay to see those few sportsmen who are capable of displaying extraordinary levels of talent. • These inspirational players not only help build the club brand but can also add significant value to the bottom line.

3) MEDIA EXPOSURE • Major clubs continually receive coverage in local, national and international press even during the closed season • The IPL season is short and the franchises will have to work extra hard to stay top of mind through the remaining 10 months of the year

THE BIGGEST BRAND VALUES RANK

BRAND

VALUE

01

KOLKATA KNIGHT RIDERS

$ 22 m

02

DELHI DAREDEVILS

$ 19 m

03

CHENNAI SUPER KINGS

$ 18 m

04

MUMBAI INDIANS

$ 17 m

05

KINGS XI PUNJAB

$ 15 m

06

ROYAL CHALLENGERS BANGALORE$ 14 m

07

HYDERABAD DECCAN CHARGERS $ 11 m

08

RAJASTHAN ROYALS

$ 10 m

Owner: Mukesh Ambani

Franchise Fee : $ 190.0 million Brand Value: $17 million Brand score: 51% Most expensive player : Sachin Tendulkar - $1.12 million Home Ground : Vankeda Mumbai The team had less mileage outside India as it had less or no players representing their nation other than Sri Lanka & South Africa

Owner: Deccan Chronicle Franchise Fee : $1.07 million

s

Most Expensive Player : Andrew Symonds - $1.35 million Brand Value: $11.3 million Brand score: 44% Home Ground : Rajiv Gandhi International Cricket Stadium

Owner ‘s: Bollywood actor ShahRukh Khan's Red Chillies Entertainment in partnership with Juhi Chawla Mehta and her husband, Jai Mehta. Franchise Fee : $75.09million (10 years) Brand Value: $22 million Most Expensive Player : Saurav Ganguly - $1.09 million Home Ground : Eden Gardens Brand score: 52%, Khan's popularity has helped in enhancing the brand image of Kolkata Knight Riders The fan following of the team is the highest among all the teams in IPL Shahrukh Khan‟ brand and the in-stadium marketing strategies of the team have influenced the teams brand value resulting in higher income from gate receipts, merchandising revenues and by attracting new team sponsors”

• Owner: India Cements • Franchise Fee : $91 million • Most Expensive Player : Andrew Flintoff - $1.55 million • Brand Value: $18 million • Brand score: 53% • Home Ground :

• • • • • •

Owner: Dr. Vijay Mallya Franchise Fee : $111.6 million Most Expensive Player : Brand Value: $13.9 million Brand score: 50% Home Ground : Chinnaswami stadium ( Banglore)

Future Expansion • Four new franchisees will join IPL in 2010-11. • Two confirmed franchisees will be based in Ahmedabad and Kanpur. • In 2012-13, two more teams will join the IPL. • Possibly second franchise from Delhi’s suburbs. • Possibly second franchise from Mumbai or new franchise from Pune.

Conclusion • IPL is a winning formula, its marketing and crisp timing being its USP. • It also has the potential to beat the prime time TV shows as is evident from the views of people. • According to Hemant Vasu Vidarbha, IPL needs to keep up to its expectation. • IPL needs to create loyalties not just for the states the teams represent, but for the playing teams as well.

Finally…

CHILL OUT and ENJOY CRICKET BUT Do Not Slap a person from other City!!!!!