No home advantage for IPL

Broadcaster and advertisers see an unkind pitch in South Africa

The Board Of Control For Cricket In India (BCCI)'s decision to shift a leg of the Indian Premier League (IPL) seven to South Africa due to the Lok Sabha elections is likely to affect the franchises and broadcaster, with the cost of logistics likely to shoot up and the time difference between the countries to affect broadcasting time slots and advertising revenues.  

While the broadcaster Multi Screen Media has said the matches will be telecast in line with Indian time slots, advertisers could be wary to spend their money as the viewership is likely to be hit with the event not being held in India. "Our viewers are used to tuning in at 4pm and 8pm for IPL matches. The BCCI has assured us the matches will happen at these times and the weekend matches will take place at prime time," said Rohit Gupta, chief sales officer.

RISKY TOSS, POSSIBLE LOSS

• A year ago, IPL sponsors had pooled in Rs 200 crore. The title sponsor PepsiCo paid Rs 80 crore
• Ticket sales revenue to be hit. Last year, the franchises had made Rs 15-20 crore from sales
• SET Max had made Rs 800-850 crore from advertising a year ago; this may not cross Rs 1,000 crore this year
• In 2009, when the event was in South Africa, the television rating points had dipped from 4.81 to 4.17

Franchises are likely to be affected the most since these will not be able to collect as much in-stadia fee. According to sources, franchises collected Rs 15 -20 crore last year through ticket sales. The nine franchises, many are in the red, had to dole out Rs 600 crore to BCCI as annual fees for hosting teams. Sources have confirmed the BCCI is now likely to refund the franchises for the logistic costs.

"We hope the BCCI will be able to find a solution in the best interest of all stakeholders," a spokesperson for PepsiCo India said. Pepsi is the title sponsor and sources confirmed the company had a relatively low market share in South Africa.

"Advertisers have been cautious in spending this year. When the matches are held outside, the connect does not happen. Also, the time slot is very important," said Abneesh Roy, associate director at Edelweiss Capital.  

Advertisers such as Godrej, associate sponsor last year, Panasonic and Voltas said these were yet to firm plans. Sunil Kataria, chief operating officer (COO), Godrej Consumer, said, "There is less attraction this year versus a year ago as far as we are concerned. While we are yet to finalise our budgets for the next year, at a broader level, I do see an impact on advertising. Besides the change in timings, which impacts viewership, there is also an on-ground impact because the matches will not be played here."

The withdrawal of Pune Warriors India, owned by Sahara Group, could help improve advertisement rates during the current year. "This has more to do with the fact that there is one team playing less this year and the number of matches will be less," said Madison Media COO Kartik Lakhsminarayan. Gupta said the rates for the IPL matches will be 20 per cent higher than a year ago to make up for the reduction in the number of matches. A 10-second spot is expected to sell at Rs 4.75 to 5 lakh, barring the final, when it will be significantly higher.

Pradeep Bakshi, president & COO, unitary products business group, Voltas, said, "I see a drop in advertising. We have been big spenders in the last few years. A year ago, we spent 20 per cent of our total advertising budget. We are yet to finalise our plan."

Media planners say the IPL may not cross Rs 1,000 crore this time. In 2009, when the event was shifted to South Africa abruptly, the average ratings saw a dip from 4.81 television rating points (TVR) to 4.17 TVR. The ad revenues for IPL 2009 were Rs 500 crore, according to various estimates. According to the ratings available for last year, in the first six weeks (59 matches), the average all-India TVR slipped to 2.9, down 14 per cent from the previous season's. Mona Jain, chief executive, Vivaki Exchange, said, "The IPL is a big property for advertisers and they will spend. Once the dates and venues are fixed, the advertisers will start lining up. The ad revenues are expected to be in line with a year ago's."

"We are likely to spend less. In the last couple of years, we did not find the return on investment very substantial," Suresh Kumar Bandi, divisional deputy managing director, Panasonic India, said.

A year ago, Set Max had lowered its ad rates 15-20 per cent (bringing it to Rs 4.5 lakh for a 10-second slot) and managed to rope in a larger number of advertisers. Instead of five presenting sponsors last year, the channel brought in 11. This helped it rake in Rs 850 crore compared with Rs 650-700 crore in 2012.