by Anant Rangaswami Apr 2, 2012 11:25 IST
IPL, India cricket in far better shape than doomsday prophecies suggest Much has been written about the IPL facing difficult times. There are questions about:
a) The falling interest in cricket, thanks to the poor performance of the Indian team, which has led to
b) The broadcaster, MSM, finding it more difficult to sell inventory at prices which they have targeted
c) Kingfisher, both as a team owner and as the official Umpires sponsor and airline partner is a worry.
d) Existing contracts for all IPL sponsorships end with the current season; it’s five years since the IPL was launched
e) Valuations of the franchise owners
Let us deal with the questions one by one
a) First, the worry about the viewership seems more than slightly misplaced. Media agency MEC, which has been predicting viewership for the IPL for the past two seasons, sees IPL 5 delivering 2.5% more viewers this season compared to last year. Their research shows 56% of viewers are more interested in the IPL than in the previous year, with 28% just as interested this year compared with IPL4. Details of the MEC study can be found here.
b) MSM seems to have found it difficult only as far as their ‘extra’ inventory is concerned. Their main sponsors are in place. The sale of ‘extra’ inventory is the icing on the cake, and, typically, all big ticket sports events hold on to the inventory for as long as possible in order to maximise returns. If the IPL does, indeed, do as well as MEC projects (or even underperforms the MEC projections slightly), MSM will have no problem getting decent prices for it
c) A sponsor or two, among many sponsors, being in trouble is not new to sport. Kingfisher’s involvement in the IPL is largely through their spirits divisions; it’s only the role as the official airline sponsor which has a question mark hanging over it.
d) This is a routine expiry. All the contracts were due to expire after IPL 5, and this is not an unexpected development. It is not the popularity of the IPL which might make things difficult for the BCCI in their sponsorship hunt; it is the state of the economy and the general pessimism and uncertainty among possible sponsors that BCCI would worry about
e) As far as valuations are concerned, the debates are meaningless – till there is a valuation. Currently, none of the franchisees has been allowed to offload equity – and it is only when a sale is concluded does one get a real sense of the value.
All this is not to suggest the BCCI can sit easy. The IPL is threatened by other T20 leagues, notably in Australia and Bangladesh. Another threat is from alternative entertainment options in the form of programming on GECs, Bollywood films and other prime time sport (English and European football and F1, to name two).
In the long term, the BCCI will have to focus on how to address these threats – but that is a medium to long term worry, not a worry for IPL 5.
For IPL 5, the BCCI has done what it could to market the product, and now it is up to two other elements in the mix – the franchisees and the players. The franchisees have to do their bit in marketing their own teams – and the players have to perform and entertain.
Cricket – and the IPL – still control too large an audience for broadcasters and advertisers to ignore, and an alternative to cricket will not emerge overnight. That’s why I’ll be surprised if, in a few hours from now, we don’t see record numbers in the new BCCI broadcast contract, despite all the prophets of doom.
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