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If it is the Indian Premier League, it cannot, of course, do without rumour and gossip around it. If it has been about after-game parties, betting and spot-fixing, controversial team owners and player auctions earlier, this year it is about the venue and timing of the tournament. The general elections, scheduled between April 7 and May 12 and counting of votes on May 16, clash with the dates for the seventh season of IPL, and the Board of Control for Cricket in India, or BCCI, has to take its million-dollar roadshow, or at least a part of it, to foreign shores. Although the venue still hasn't been locked - it could be South Africa, Bangladesh or West Asia - the board, IPL franchises, advertisers and marketers are already chalking out alternate business strategies.
Because IPL is as much about sport as it is about money, the possibility of a change in venue will affect all commercial activities around the T20 razzmatazz. The official broadcaster of IPL, Multi Screen Media, doesn't seem too perturbed by the export of IPL to another country. "BCCI will ensure that the matches will be played even abroad at the usual 4 pm and 8 pm, while the weekend matches will take place at primetime," avers Rohit Gupta, chief sales officer, MSM. The ad rates won't be too adversely affected, he says, even if the tournament is played outside India.
"IPL is a successful model which the Indian public has fallen for hook, line and sinker," declares a Mumbai-based media planner. "It doesn't matter what controversies it attracts, the bottom line is people will watch it." Indeed, last fortnight, a report by KPMG and the Confederation of Indian Industry said IPL remained unchallenged as the most lucrative sporting event in India. Not only did it offer a prize money ($4.2 million) that was four times as much as the best offered by any other tournament ($1.3 million by World Series Hockey, or WSH), but the ability of its franchises to generate revenues of Rs 1-3 crore per match was beyond teams in any other sport leagues of the country.
Perhaps that's the reason why the television ad rates for IPL7 are expected to go northwards. A 10-second ad slot was sold at around Rs 4 lakh in the sixth edition of IPL last year. This season, it is expected to increase to Rs 4.75- 5 lakh.
Home and away
This won't be the first time that IPL will not be played on domestic grounds. Five years ago, again due to the clash in timings with the Lok Sabha elections, the tournament was shifted to South Africa. The event proved a fair success, though there was a drop in television ratings. While the 2008 IPL at home had an average TVR of 4.81, the 2009 edition played in South Africa reported an average of 4.17. However, the small slide has been easily digested by the industry. As an executive of a franchise says, "Back then, there was still a bit of scepticism around the property, and TV viewership had been inconsistent. It is more solid now."
Last year, IPL garnered revenues of Rs 900 crore, which is over 20 per cent growth from Rs 650-700 crore logged in 2012. The rise in revenues might not be quite so dramatic this year. "There will be some loss for the teams if IPL is shifted out," admits Ranjib Biswal, commissioner, IPL, "but we will try to take care of everyone's interest." BCCI wants to play most of the matches at home after the election, while exporting the initial games that will clash with the election dates. While Biswal declines comment on whether the revenues from IPL will take a beating this year, he insists that the event will be a success. "We are in talks with boards of other countries to see where we can host some matches and wherever it is held, our goal will be to make it a resounding success," he says.
Revenues of the franchisees, however, may take a hit as the teams stand to lose the in-stadia revenue. Hemant Dua, CEO, GMR Sports, owner of the Delhi Daredevils team, was quoted in The Economic Times as saying that revenue would drop 40 per cent if the matches are not played in India. A spokesperson of another franchise, the Kolkata Knight Riders, declines a direct comment on the issue but says, "We are still evaluating our options." The nine franchises (eight this year post the disbandment of Pune Warriors) had collected Rs 15-20 crore from ticket sales in 2012. Because they may lose out on gate collections, the teams are pushing for more matches towards the end of the tournament to be held in India.
The same goes for merchandise revenues. This is something that playing overseas will definitely impact. While crowds may gather to see the matches, they may not spend much on team merchandise as loyalists do back home. IPL teams offer a host of items from official jerseys and T-shirts to caps, bags and buttons. In cities like Mumbai and Bangalore, sales have been high. In 2010, an eBay survey put fans in Mumbai as the buyers of the most merchandise. According to a franchise executive, in-stadia sale of merchandise amounts to around Rs 1.5 lakh on average per game. The overall revenue from merchandise depends on how far the team goes in the tournament. No official figures are available on the revenue from merchandise, but a report by consultancy American Appraisals Associates has said that the IPL merchandise market is expected to touch $411 million by 2020.
Queering the pitch
The bravado of BCCI does not, however, mask the tad bit of disquiet that has crept into the minds of marketers. "We hope BCCI will be able to find a solution in the best interest of all stakeholders," says a spokesperson for PepsiCo India. Pepsi is the title sponsor. Reports say it is not keen on South Africa as a venue of the tournament. Many companies are tight-lipped about their plans. Sunil Kataria, chief operating officer of Godrej Consumer Products, says, "It is a less attractive property this year as far as we are concerned. While we are yet to finalise our budgets for the next financial 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."
However, many continue to bet on IPL's pedigree to help it weather the storm. So, while saying that the attraction will be a notch lower this year with a slight drop in interest, Santosh Desai, CEO, Future Brands, firmly adds, "but companies will spend." Media planners too remain confident that with the number of matches being reduced from 74 to 60 this year as a result of Pune Warriors' withdrawal, the ad rates will be high and equations will be balanced. Ajit Varghese, chief executive officer of Maxus Asia-Pacific, the media-buying agency of Group M, voices a similar view. "IPL is an established format and the revenues will not be drastically hit just because the venue is shifted," he says. "It will maintain the previous years' levels."
In the seven years of its existence, IPL has gone from an uncertain commercial venture to being one of the big sporting events, valued earlier this month by American Appraisal Associates at $3.2 billion. In the process, it has become shock-proof, and no amount of controversy looks likely to repel advertisers, marketers and viewers. However, this time around, the franchises might have a reason or two not to smile.
