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The Secret to The Indian Premier League’s Success

The Indian Premier League (IPL), which recently had its player auction in Bangalore for the upcoming 4th season, is one of the largest events on the global sport calendar.  The 2011 season gets underway on April 8th.

The IPL is a franchised T20 (twenty twenty) cricket league that now comprises 10 teams spread across the whole country – from the Delhi Daredevils, in the North, to the new Kochi franchise, in the South. T20 cricket is the most shortened version of the game – 20 overs (or 120 balls) per side – and is played under floodlights in a three hour time frame.  Many cricketing purists just don’t accept T20. My Saturday Sydney Morning Herald paper called T20 “cricket’s freak show” and referred to the IPL auction as an “uber-tacky exercise”.

However, T20 is here to stay and the IPL is massively popular in a cricket-obsessed country.  As the numbers testify, it is a hugely successful sporting model – albeit tainted by controversy.

According to a 2010 report from brand valuation consultancy Brand Finance, the valuation of the IPL brand had more than doubled to $4.13billion. According to the MD of Brand Finance, Unni Krishnan, quoted in The Economic Times last March:

In comparison to international benchmarks for sporting business’ such as EPL (English Premier League), which is valued at USD 12 billion, the IPL juggernaut, in a short span of three years, is valued at USD 4 billion and has the potential to grow further,”

It has also been claimed that the IPL is the second highest-paid league in sport, based on first-team salaries on a pro-rata basis, second only to the NBA. In this year’s player auction (watched live on television by 19m people) two cricketing brothers from humble Muslim backgrounds – Yusuf and Irfan Pathan – won contracts worth a combined $4m per season. The salary cap stands at $9m per franchise.

So Why is IPL So Successful?

There are several reasons for this. Cricket is like a religion in India – a country whose economy is growing at about 8% – so there was definitely enormous potential from the start. IPL has done many things right, too. It has been innovative – last year IPL became the first sporting event ever to be broadcast live on YouTube – subscription based, of course. It has introduced style and entertainment at the grounds – fans hear loud music, see fireworks and are entertained by official cheerleaders such as the White Mischief Gals of the Royal Challengers. By attracting the best cricketing talent locally and from overseas, the IPL has guaranteed a quality and entertaining product on the oval. Being a domestic league, unlike the World Cup, an Indian team always wins, too.

What the IPL has done really well is to maximize television rights and sponsorship revenues. The IPL broadcast rights for the inaugural IPL season were sold to World Sports Group, a Singapore-based firm, for more than $1 billion. Given the fact that the television audience reached 143million last year, that is probably a bargain price. The IPL really appeals to advertisers and offers a genuine value proposition. Viewers are mainly middle class with high disposable income, living in the cities and typically of the legal drinking age – which is important when brewery sponsorship is on the table. In 2010, United Breweries Holdings Ltd., owners of the Royal Challengers cricket franchise, gained on the BSE 200 Index after the IPL valuation, climbing 4.2 percent to 283.50 rupees.

As for advertising, according to a recent article in The Economist, IPL advertising revenues at MSM Satellite (Singapore), a division of Sony, which owns the India broadcast rights, went up by 60%:

“The IPL is the single biggest event in India today, sporting or otherwise,” says Manjit Singh, MSM’s boss. “When it’s on, we dominate.”

Glitz and Glamour

45% of IPL viewers are also women. When you hear of Bollywood stars milling around at the hotel where the player auction takes place, you know that the IPL has transcended sport to become an entertainment product offering glamour and glitz, too.

It is Not Without Controversy

Yes – the IPL has been plagued by scandal and allegations of corruption. Last April, Sashi Tharoor resigned as Minister of State for External Affairs in a dispute over finance in the new IPL franchise, Kochi.  The fact his friend had equity stakes in the consortium owning the team brought his downfall.  The IPL commissioner, Lalit Modi, has also been accused of corruption and was suspended from his position by the Board of Control for Cricket in India (BCCI) . Additionally, last October, two of the IPL’s ten teams, based in Rajasthan and Punjab, were expelled in an ownership row. In December 2010, an IPL court order reinstated both teams in the 2011 season.

The 4th season of the IPL begins in April after this year’s Cricket World Cup, which is also being staged in India (as well as in Sri Lanka and Bangladesh). The IPL 2011 edition now has more teams and more games – 70 in total. By expanding the season into the warmer month of May, many feel that the heat may prove to be a problem for the players. However, many observers claim that the IPL is too big to fail. They’d maintain that it survived a third season away from home in South Africa and will continue to grow from strength to strength.

If you want to see what all the fuss is about, I encourage you to tune in – via YouTube of course!

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7 Responses to The Secret to The Indian Premier League’s Success

  1. KaanjiPinji January 25, 2011 at 2:00 pm #

    IPL live on Youtube was free not subscription based. It was damn slow is another matter altogether!!!!

  2. KaanjiPinji January 25, 2011 at 2:03 pm #

    IPL second season was played in SA not third, quite a bit f errors but mostly well covered. Nice to know Americans have also developed inerest in Cricket, albeit the least pure one 🙂

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