Categories
Games

IPL BUSINESS- Larger than what U think.

It has been an year since i wrote this post. The post has attracted a lot of traffic especially the last quarter considering the  hype about IPL season 2. Considering the traffic stats from search terms, I thought i  should write a followup post with a better analysis of the revenue figures. The basic Numbers of IPL are as follows. dlf_ipl_logo Television rights Joint bid by India’s Sony TV network and Singapore-based World Sports Group secured the global broadcasting rights for 1.026 billion dollars for a 10-year period. The deal was re-negotiated this year after the IPL cancelled the Sony-WSG deal citing poor production quality. Sony-WSG won back the rights after agreeing to pay 1.63 billion dollars for the next nine years till 2017 in an out-of-court settlement. Dollars paid by individuals and groups at an auction in January 2008 to buy the eight teams – 111.9 million by industrialist Mukesh Ambani for Mumbai Indians. – 111.6 million by liquor and airline tycoon Vijay Mallya for Bangalore Royal Challengers. – 107 million by newspaper group Deccan Chronicle for the Hyderabad-based Deccan Chargers. – 91 million by BCCI secretary and businessman N. Srinivasan for Chennai Super Kings. – 84 million by business group GMR Holdings to buy Delhi Daredevils. – 76 million by Bollywood star Preity Zinta and her friends for Kings XI Punjab. – 75 million by Bollywood star Shahrukh Khan for Kolkata Knight Riders. – 67 million by Emerging Media group, partly owned by Lachlan Murdoch, for Rajasthan Royals. Top IPL earners (per season, in dollars) :
1. 1.55 million – Kevin Pietersen – Bangalore Royal Challengers
2. 1.55 million – Andrew Flintoff – Chennai Super Kings
3. 1.50 million – Mahendra Singh Dhoni – Chennai Super Kings
4. 1.35 million – Andrew Symonds – Deccan Chargers
5. 975,000 – Sanath Jayasuriya – Mumbai Indians
6. 950,000 – Ishant Sharma – Kolkata Knight Riders
7. 950,000 – Jean-Paul Duminy – Mumbai Indians
8. 925,000 – Irfan Pathan – King’s XI Punjab
9. 900,000 – Jacques Kallis – Bangalore Royal Challengers
10. 900,000 – Brett Lee – King’s XI Punjab
11. 850,000 – Harbhajan Singh – Mumbai Indians Note: Players not available for the entire tournament are paid on a pro-rata basis per match.

India’s ‘icon’ players Five Indian stars were given ‘icon’ status and were not put up for auction last year, thereby ensuring they played for their ‘home’ teams. They earned 15 percent more than the highest-paid player in their respective teams
* Sachin Tendulkar (Mumbai Indians) – 1.12 million dollars
* Sourav Ganguly (Kolkata Knight Riders) – 1.09 million dollars
* Yuvraj Singh (Kings XI Punjab) – 1.06 million dollars
* Rahul Dravid (Bangalore Royal Challengers) – 1.03 million dollars
* Virender Sehwag (Delhi Daredevils) – 833,750 dollars

Prize money
* Winner: 960,000 dollars
* Runners-up: 480,000 dollars
* Losing semi-finalists: 240,000 dollars
* Fifth-placed team: 160,000 dollars
* Sixth–placed team: 140,000 dollars
* Seventh-placed team: 100,000 dollars
* Eighth-placed team: 80,000 dollars A little bit of googling lets me understand that the revenues will be shared in the following manner which i confirmed from

here. “World over, any league has three main sources of income namely media receipts, gate receipts and sponsorships. Under IPL, these three streams are categorized under central and local. Central revenues are through IPL. A Central 1. Media rights – To be shared equally amongst franchises after removing IPL’s share. 2. 2. Sponsorship rights (IPL sponsors) – 60% of the amount collected to be distributed equally amongst the franchises. B Local 1. Sponsorships – Team sponsorship revenues are the most variable and are dependent on the marketing skills. For example, teams like India Cements have marketed their teams based on the format of IPL – where sponsorships are sold on categories. ICL’s main sponsor is Aircel. In contrast, the other team of Deccan Chronicle will have team partners. These partners will have ownership of the team. For example, in case of an entertainment partner, anything to do with entertainment from cheerleaders to fours and sixes will be seen by that party. 2. Gate receipts – Are anticipated to be a major source of revenues. 20% of tickets are to be allocated to IPL.” So far the predictions are that IPL Season 2 ‘s Revenue will be around 10,790 cr which according to Modi is 1725 cr more than last season’s revenue. That’s it with the facts and figures which I can share. 10,790 cr is really a huge amount of money to rake in from the common man’s interest in cricket. Now I know what my interest in cricket is worth(atleast approximately). Last year I had made a mention in my post that some part of the IPL’s revenues be spent for a social cause. I am not sure if they heard me, this year they have the HEAT programme which is aimed at spending about Rs 40 miIllion for education of the youth in South Africa. I definitely appreciate their start. Hope their spending increases drastically over the years. Have an idea? Wanna share ur thoughts. Go ahead, leave a comment… I would love to talk to you.

Categories
Games

Why IPL is Just another Business idea?

The Indian Premier League or IPL is the media buzz of the year so far. All those men behind it have left no stone unturned to make it the way it is today. We all definitely love the Game and especially the Indians and this part of the sub continent. We definitely have to appreciate the BCCI for being a part in the evolution of the IPL. I am really amazed by the amount of money that has been involved behind to get this to us. Reports say the IPL is targeted to generate revenues around 2 billion USD. Well that’s huge ransom that’s behind the game. I wonder whether it is behind the game or actually behind my money and time? Cricket was a Game earlier and now on the verge of becoming a successful business. Thanks to those few intelligent minds who actually are making their fortune out of the interest and passion of the common man. I am definetly sure that these gentlemen got carried away on the fortune they could make out of it and did not realize the amount of impact it would have on the common man in India.

Let’s do some calculations to have a rough idea on the impact of IPL: The league lasts for a whopping 45 days. Lets say a person watches one IPL match a day and each day, so on an average he would have spent 180 hrs(45days*4hrs per match) of his valuable time on the TV. Does he really stop with it, never does this happen; let’s add another hr a day which he spends discussing about the match with his friends etc… So he would have spent about 225hrs on the whole for the IPL alone (this is just an assumption). What does he get to enjoy for the 225 hrs of time that he is invested, he has opportunity to watch his favorite stars play amidst all the ads that they act to make their own life better. To be precise the match that I see on 32 inch TV is only of the size of 25 inches if I neglect the 6 inch ads that are constantly visible as a border to the Match(Is it ads between the match or match between the ads), and a very little of satisfaction that he has seen his stars. 225 hrs might not seem a huge number, but we also need to look at the kind of people who actually are very keen and passionate about the cricket. A majority of the people who watch the league would be coming from the middleclass, with the age group ranging from 12-40 approximately. About 20 million people helped Sony max get a max TRP rating of 8.1 and move to the no.1 spot from the 4 position. 220 hrs and 20 million people, that’s an enormous amount of time. Its definitely understood that the common man is robbed of his time and money, and the players just get a meager share (max 1.5million USD for 45days, ok lets add another million for the new ads u come up due to starring in the IPL) of the whole business in spite of spoiling their own reputation at times like Bhajji, Sreesanth or Sohaib.

IPL definitely is one among the best business ideas that has already started generating revenues of the order of billions at the cost of 20 million people willing to spend 220 hrs of their valuable time, to ensure the BCCI, Sony and all other partner’s are rich. I always feel businesses should give back something in return to the society to survive in the long run. I don’t see any value add from IPL for a common man like me; It really would be very great if there was at least one match (IPL finale would be preferred) to be played for charity.

I would be delighted to hear your thoughts too, feel free to leave your comments.