Let the games begin
After some hard-nosed bargaining, IPL 2 buries the hatchet with the sponsors and the broadcaster.
After several twists and turns to the plot, the IPL 2 bandwagon is all set to roll, finally. The event will be held—only, the venue will be South Africa. 59 matches will be played in six stadiums across the country from April 18 to May 24. Indians can catch the action on the idiot box. Sony Max will telecast the matches live at prime time slots of 4 p.m. and 8 p.m. But many are asking whether the tournament has the potential to be a money-spinner this year, with the last-minute change of venue, for the key stakeholders— the broadcaster, franchisees and the BCCI.
Certainly, the stakes are high in 2009 as well, with a lot riding on the tournament. Consider the wrangle over the telecast rights of the matches. Multi Screen Media, which owns Sony Max, has retained the broadcasting rights for IPL Season 2. But it has had to pay a heavy price. Its new agreement with World Sports Group (WSG), which had won the telecast rights from the BCCI, is valued at a staggering Rs 8,200 crore ($1.6 billion). The contract will be valid for the next nine years through to 2017. The current deal is almost 56 per cent higher from last year which was worth Rs 4,700 crore ($1.02 billion) for a period of 10 years.
In the race for the broadcasting rights for IPL were ESPN and NDTV, but sources told BT that they were not willing to pay such a steep price. Says Venu Nair, Chief Executive, South Asia, WSG: “It has become one of the most premium properties in the world of cricket. The new values are thus justified today and we are confident of the returns as it will ensure more eyeballs to the broadcasters, that, in turn, will attract advertisers.”
So, what does this mean for Sony Max? In 2008, the broadcaster apparently made revenues of around Rs 285 crore. This year it hopes to do even better. “List of our advertisers has grown this year, and we have tweaked our strategy as well,” says Rohit Gupta, President, MSM. The advertising rates were around Rs 2.25 lakh for 10 second spot on television last year and had shot shot up to Rs 3.3 lakh for the lastminute advertisers. “This year the rates have been upwards of Rs 3.5 lakh and would go up to Rs 4.5 lakh and more for the late entrants,” says Basabdatta Chowdhuri, CEO, Madison Media Plus.
Sony Max has already tied up with Vodafone and Airtel Digital TV as its presenting sponsor (last time there was only Vodafone). Its associate sponsors include Hyundai, Coke, Godrej, Havells, LG, Samsung Mobile and HUL. “There were just seven of them last year and we have booked almost 65 per cent of our inventory. We will keep the last bit open for those who come in late and the prices there would be higher,” says Gupta. As rates have gone up the revenues would also nearly double to almost Rs 500 crore say media watchers.
“Obviously there’s money to be made—why would so many players have evinced interest otherwise,” say industry sources. The eight franchisees, though, had some teething troubles in finding sponsors/partners for their teams. Largely a fallout of the delay in deciding the venue and the broadcaster for the tournament.
After the initial hiccups, sponsors have now started to come on board. “We are still talking to many marketers and we will soon decide on our title sponsor,” says Mohit Burman, co-team owner of Kings XI Punjab. Indeed, Delhi Daredevils, Chennai Super Kings and Kolkata Knight Riders have succeeded in not just retaining many of their partners, but are also adding to the list. In fact, Wrigley’s has emerged as a big entrant into the scene along with Puma (for merchandise).
“Regardless of what has happened, for advertisers, this is the biggest opportunity. And if some franchisees have a poor sponsor list, then it has nothing to do with advertisers opting out, but with poor management at their own end,” says Hiren Pandit, Managing Partner, GroupM ESP (the entertainment, sports & partnership unit of WPP, which was a consultant to Deccan Chargers last year). Meanwhile, the BCCI has promised to come to the aid of the franchise owners. IPL Commissioner Lalit Modi has assured them that the loss of gate receipts, due to matches not being played on home ground, and the additional costs incurred by them on travel will be taken care of by BCCI.
Most sponsors, on their part, claim that nothing has changed this year. “We remain committed to Kolkata Knight Riders. Nothing has changed from our end,” says D. Shivkumar, Marketing Head, Nokia. But there is some disappointment at the change of venue.
Says Pawan Munjal, MD & CEO, Hero Honda Motors: “Moving IPL out of India this year is likely to restrict opportunities to leverage our brand association, but it is commendable that the IPL is going to take place despite several constraints. We remain committed to the IPL and Delhi Daredevils.” Advertisers and sponsors still seem to be throwing their weight behind the second edition of the IPL to the relief of the franchisees and the broadcaster. Modi, though, has publicly stated the additional costs incurred in moving the tournament out of India will make it difficult for BCCI to make profits. Analysts, though, feel it’s unlikely that the BCCI will be a big loser. The show, then, goes on.
Certainly, the stakes are high in 2009 as well, with a lot riding on the tournament. Consider the wrangle over the telecast rights of the matches. Multi Screen Media, which owns Sony Max, has retained the broadcasting rights for IPL Season 2. But it has had to pay a heavy price. Its new agreement with World Sports Group (WSG), which had won the telecast rights from the BCCI, is valued at a staggering Rs 8,200 crore ($1.6 billion). The contract will be valid for the next nine years through to 2017. The current deal is almost 56 per cent higher from last year which was worth Rs 4,700 crore ($1.02 billion) for a period of 10 years.
In the race for the broadcasting rights for IPL were ESPN and NDTV, but sources told BT that they were not willing to pay such a steep price. Says Venu Nair, Chief Executive, South Asia, WSG: “It has become one of the most premium properties in the world of cricket. The new values are thus justified today and we are confident of the returns as it will ensure more eyeballs to the broadcasters, that, in turn, will attract advertisers.”
So, what does this mean for Sony Max? In 2008, the broadcaster apparently made revenues of around Rs 285 crore. This year it hopes to do even better. “List of our advertisers has grown this year, and we have tweaked our strategy as well,” says Rohit Gupta, President, MSM. The advertising rates were around Rs 2.25 lakh for 10 second spot on television last year and had shot shot up to Rs 3.3 lakh for the lastminute advertisers. “This year the rates have been upwards of Rs 3.5 lakh and would go up to Rs 4.5 lakh and more for the late entrants,” says Basabdatta Chowdhuri, CEO, Madison Media Plus.
Sony Max has already tied up with Vodafone and Airtel Digital TV as its presenting sponsor (last time there was only Vodafone). Its associate sponsors include Hyundai, Coke, Godrej, Havells, LG, Samsung Mobile and HUL. “There were just seven of them last year and we have booked almost 65 per cent of our inventory. We will keep the last bit open for those who come in late and the prices there would be higher,” says Gupta. As rates have gone up the revenues would also nearly double to almost Rs 500 crore say media watchers.
“Obviously there’s money to be made—why would so many players have evinced interest otherwise,” say industry sources. The eight franchisees, though, had some teething troubles in finding sponsors/partners for their teams. Largely a fallout of the delay in deciding the venue and the broadcaster for the tournament.
After the initial hiccups, sponsors have now started to come on board. “We are still talking to many marketers and we will soon decide on our title sponsor,” says Mohit Burman, co-team owner of Kings XI Punjab. Indeed, Delhi Daredevils, Chennai Super Kings and Kolkata Knight Riders have succeeded in not just retaining many of their partners, but are also adding to the list. In fact, Wrigley’s has emerged as a big entrant into the scene along with Puma (for merchandise).
Lalit Modi
Most sponsors, on their part, claim that nothing has changed this year. “We remain committed to Kolkata Knight Riders. Nothing has changed from our end,” says D. Shivkumar, Marketing Head, Nokia. But there is some disappointment at the change of venue.
Says Pawan Munjal, MD & CEO, Hero Honda Motors: “Moving IPL out of India this year is likely to restrict opportunities to leverage our brand association, but it is commendable that the IPL is going to take place despite several constraints. We remain committed to the IPL and Delhi Daredevils.” Advertisers and sponsors still seem to be throwing their weight behind the second edition of the IPL to the relief of the franchisees and the broadcaster. Modi, though, has publicly stated the additional costs incurred in moving the tournament out of India will make it difficult for BCCI to make profits. Analysts, though, feel it’s unlikely that the BCCI will be a big loser. The show, then, goes on.
