Indian Premier League Marketing Case Study

Indian Premier unite Marketing Case Studycricket is just adept of those many magnetic variations which was conceived by the slope and meliorate by the world the Indian Premier union is just an extension of this phenomenon. The Twenty 20 coif was invented in England in 2003 but it re solelyy took off when the master strategist that is Lalit Modi took it upon himself to take this format a step higher into crickets first privilege based sports event.In late June 2007 Lalit Modi who was then Vice-President of the Board of play Control for India spoke to Andrew Wildblood of the International Management collection (IMG), a company with a vast see in the whole atomic number 18a of sports management. IMG and Lalit Modi then sat down to discuss this example and finally came up with the idea that is the IPL in its current format.The idea behind creating city based aggroups was based on the model present in sports in US and UK. IMG designed the IPL after an intensive study of the primary boast leagues approximately the world such as the NHL, NBA, NFL and EPL. They examined the theoretical models and in addition the result and impact of each of these leagues in advance arriving at the final blueprint. As in most an other(prenominal) areas, there were at least as many l actualizeings from the shortcomings and weaknesses as there were in the strengths and benefits mapped to the singular market contexts. What has finally emerged as the IPL design is one that has been meticulously refined to work for cricket.The league structure has been mode conduct so as to flourish in the uniquely Indian context, and drive the development of grassroots talent in Indian cricket.The idea had all the ingredients to be a success. The best cricket players of the world, fans from around the world and a dollop of glamour due to the straw man of Bollywood celebrities, corporates and Indian politicos.The IPL was the first of its cordial sports extravaganza of its kind, prior t o this India has been fed a steady diet of 50 overs and test cricket. This kind of model which is common in the west but a first of its kind in India provided many new avenues for all the stakeholders. The grand old game of cricket has undergone several urinateovers in its history. Test cricket was followed by 60 over one dayers which later became 50 overs. The all neat strip of the 70s gave way to the colored clothing and day-night matches of the Kerry Packer era. The Twenty 20 format which originated in England was devised to get down back the crowds in English County Cricket. The game in England was going through a major crisis and the accounting entry of T20 was instrumental in bringing a some(prenominal) needed dose of excitement in the game. once again English were left to marvel as the sport they had created in their own backyard was spun into the Great Indian Tamasha by Lalit Modi and his comrades.Commercialization of IPLIndian Premier partnership (IPL) has defined a n ew set of picture to do business in the Indian landscape. This was bound to happen someday, looking at the craze for the cricket in this country. IPL is not a yet another cricket extravaganza but an event where notes is spun around with many different angles and huge stakes are involved in it. IPL has corporatized cricket in a unique way. It has added a new dimension of marketing and branding the sport in India. IPL is a business which has big economy of scale. India has seen the success of different businesses and the organizations or entrepreneurs running them and now it is the turn of IPL. boilers suit IPL itself has become a big brand under the leadership of Top management and it is a occasion of interest that how it has been done as compared to the failure of its rival league ICL. The Value Positioning of IPL is Fast and sprightly Entertainment Which has its own pros and cons according to the test and 50-50 Over Cricket Fraternity.The Making of the FranchisesThe biggest US P of the Indian Premier coalition is that, here the teams are run and managed by various corporate houses or Bollywood celebrities. The owners of the teams went through a control procedure to buy the teams and after that, the cricketers were also cast off up for auction sale. The managements of the teams took part in the auction and urge on for their desired cricketers, with a view to make their team the strongest one among all others. Cricketers from around the world, including the Indian cricketers were put up for auction. The BCCI actually followed the format of Englands most popular football event, the Barclays English Premier compact (EPL) for governing the rules and regulations of the Indian Premier League (IPL).Right from the ownership of the franchises to the games themselves, IPL saw an exciting cocktail of Cricket, Bollywood and Business Barons. The population involved in buying these franchises were the whos who of Bollywood and Indian Business Houses.The winningbid dersfor the eightfranchiseswere declared on 24 January 2008. The total base price for the auction was US $400 million but the auction went on to fetch US $723.59 million.On March 21, 2010,PuneandKochiwere unveiled as the two new franchises for the fourth edition of the Indian Premier League. The base price this cartridge clip around was $225 million. While Pune was bought by Sahara take chances Sports Group for $370 million, the Kochi franchise was bought by Rendezvous Sports World Limited for $333.3 million. The process was to engage been completed on March 7 but was postponed by two weeks after many bidders and theBCCIobjected to stiff financial clauses. The second franchise auction fetched total $703 million. This auction brought a lot of attention towards the IPL for the alleged involvement of Union Cabinet attend ShashiTharoor . His involvement in trying to tip the scales in the favor of a particular consortium created much furore in the mediaOpen Auction for Individual Pla yersHighest bidder becomes the buyer.Each player has a base annual fee which is on a pro-rata basis depending on his availability.Each IPL franchise has a max throttle to spend on bidding for players.FranchiseOwner(s)CaptainPrice (USD)Price (Rupees)Mumbai IndiansMukesh Ambani(Reliance Industries)Sachin Tendulkar$ 112.9 mRs. 441 Cr empurpled Challengers BangaloreVijay Mallya(UB Group)Anil Kumble$ 111.6mRs. 440 CrDeccanChargersDeccan Chronicle(Venkat Ram Reddy)Adam Gilchrist$ 107.0 mRs. 422 CrChennai Super KingsIndia Cements(N.Srinivasan)Mahendra Singh Dhoni$ 91.90 mRs. 359 CrDelhi DaredevilsGMR Group( G.M Rao)Gautam Gambhir$ 84.0 mRs. 331 CrKings XI PunjabNess Wadia(Bombay Dyeing),Priety Zinta, Mohit Burman (Dabur) and Karan Paul (Apeejay Surendera Group)Kumar Sangakkara$ 76.0 mRs. 300 CrKolkata sawbuck RidersRed Chillies Entertainment(Shahrukh Khan,Gauri Khan,Juhi ChawlaandJai Mehta)Saurav Ganguly$ 75.1 mRs. 296 CrRajasthan over-embellishedsEmerging Media (Lachlan Murdoch, A.R J ha and Suresh Chellaram), Ultra tech cements, Shilpa Shetty, Raj KundraShane Warne$ 67.0 mRs. 264 CrPuneSahara Ad meditation Sports GroupTBD$ 370 mRs. 1702 CrKochiRendezvous Sports World LimitedTBD$ 333.3 mRs. 1533 CrEconomics of IPL television receiver rights and sponsorshipsThe IPL is predicted to bring the BCCI income of approximatelyUS$1.6 billion, over a period of five to ten long time. All of these revenues are directed to a central pool, 40% of which bequeath go to IPL itself, 54% to franchisees and 6% as reckon currency. The property leading be distributed in these proportions until 2017, after which the share of IPL will be 50%, franchisees 45% and prize money 5%. The IPL signed upKingfisher Airlinesas the official umpire partner for the serial in aRs.106 crore (1.06 billion) deal. This deal sees the Kingfisher Airlines brand on all umpires uniforms and also on the giant screens during trio umpiredecisions video recording rightsOn 15 January 2008 it was announced tha t a consortium consisting ofIndiasSony Entertainment Television engagement andSingapore-basedWorld Sport Groupsecured the global bare rights of the Indian Premier League.The record deal has piece of ten years at a cost of US $1.026 billion. As part of the deal, the consortium will pay the BCCI US $918 million for the television broadcast rights and US $108 million for the promotion of the tournament.This deal was challenged in the Bombay High Court by IPL, and got the ruling on its side. After losing the battle in court,Sony Entertainment Televisionsigned a new contract with BCCI withSony Entertainment Televisionpaying a staggeringRs.8700 crores for 10 years.Sony-WSG then re-sold parts of the broadcasting rights geographically to other companies. Below is a summary of the broadcasting rights around the world. On 4 March 2010 ITV announced it had secured the United Kingdom television rights for the 2010 Indian Premier League. ITV will televise 59 of the 60 IPL matches on its ITV4 free to air channel. Sony charges Rs 4-5 hundred thousand per 10 seconds, ( snuff it soaps charge Rs 1.5 lakh per 10 seconds). According to Television Audience Measurement (TAM), the average Television Rating Points (TRP) of the first 14 matches in Season 1 was 4.97 in Season 2 it was 4.52, and in Season 3 its big(p) to 4.69. If IPL-1 reached 77 million people in the first 14 matches, IPL-2 went to 96 million and IPL-3 is at 108 million. The ratings surrender also raised team earnings.Winning BidderRegional Broadcast RightsSony/World Sport Group orbicular Rights,IndiaONE HDFree-to-air HD and SD television inAustralia. Owned by Network TEN.Sky Network Television unsanded Zealandbroadcast rightsPCCWHong Kongbroadcast rights, broadcast on Now Sports.StarHubSingaporebroadcast rights, broadcast on Cricket Extra.AstroMalaysiabroadcast rights on Astro Box Office Sport.SuperSportSouth Africa,Central AfricaandNigeriabroadcast rights.Arab Digital Distribution nitty-gritty Eastbroadcast righ ts on ADDsCricOne. Broadcast toUnited Arab Emirates, Bahrain, Iran, Iraq,Jordan,Kuwait,Lebanon, Oman,Qatar, Palestine,Saudi Arabia,Syria,Turkey,Algeria,Morocco,Tunisia,Egypt, Sudan,LibyaandNigeria.GEO SuperPakistanbroadcast rightsWillow TVRights to distribute ontelevision,radio,broadbandandInternet, for the IPL in North America.DirecTVUnited StatesExclusive broadcast rights on Cricket Ticket.Asian Television NetworkCanadianbroadcast rights. Aired on Pay-per-view channel. Aired onXM piano tuners ATN-Asian Radioas well.Sports MaxCaribbeanbroadcast rights.ITVUnited Kingdombroadcast rights, broadcast onITV4.SponsorshipsIndias biggest property developerDLF Grouppaid US$50 million to be the title sponsor of the tournament for 5 years from 2008 to 2013.Other five-year sponsorship agreements include a deal with motorcycle maker Hero Honda worth $22.5-million, one with PepsiCo worth $12.5-million, and a deal with beer and airline conglomerate Kingfisher at $26.5-million. tax and ProfitsThe UK-based brand consultancy, Brand Finance, has valued the IPL at $4.13 billion in 2010.It was valued at U$2.01 billion in 2009 by the same consultancy. thither are disputed figures for the profitability of the teams. One analyst said that four teams out of the eight make a profit in 2009.While the London Times said that all butKings XI Punjab do a profit. In 2010, the IPL expects to have 80 official merchandising deals. It has signed a deal withSwisswatchmaker Bandelier to make official watches for the IPL.Official IPL applicationsDCI Mobile Studios (A division of Dot Com Infoway Limited), in conjunction with Sigma Ventures ofSingapore, have jointly acquired the rights to be the exclusive Mobile Application partner and rights holder for the Indian Premier League cricket matches worldwide for the next 8 years (including the 2017 season). Recently, they have released the IPL T20 Mobile applications foriPhone,NokiaSmartphonesandBlackberrydevices. Soon it will be made available across a ll other major Mobile platforms including theAndroid,Windows Mobile,Palm others.How Does IPL make Money?Auction of broadcasting rights.Title sponsorship and corporate sponsorship.Sale of Tickets (20% allocated to IPL).Auction of Franchisee rights.Official Umpires sponsorships.How is the Income Distributed? assign of the broadcasting money with franchisees.Share of the sponsorship money with franchisees.Share of ticket money with franchisees.Inauguration expenses. jimmy Money.Sources of Income for an IPL Franchise (ROI)Share in revenue from the broadcasting rights.Share in the sponsorship money.Share in revenue from the sale of tickets.Revenue from In-stadium Advertising.Sale of Players to other franchise.Revenue from own sponsorship and corporate sponsorship.How is the franchise income distributed?Franchisee fees 10% of the total franchisee costs all year to IPL.Players cost.Match fees and Inauguration expenses.Rent of Stadium.Marketing and promotional cost.Fees for coaches, physio therapists and other members.Administrative cost.Franchisees can earn profit in IPL as Team owners get 80% of broadcast revenues, 60% of sponsorship revenues, 100% of team sponsorship revenues, 80% of ticket revenues, 87.5% of all merchandising revenues, and 100% of all hospitality revenues.Brand Finance, which came out with IPL brands a la mode(p) valuation at $ 4.13 billion, said that the brand alone has risen significantly, providing tremendous economic value to its owner, BCCI.Although the English Premier League is valued much higher at $12 billion, the IPLs valuation has risen to a higher place $4 billion in just three years, Brand Finance pointed out. Indian Premier League would generate revenue of $1 billion this season, thanks to huge fan following across the globe, attracting a large number of advertisers.Indian Premier Leagues brand value has more than doubled to $4.13 billion (over Rs 18,000 crores), while Chennai Super Kings has emerged the most valued franchise this ye ar, says a study. Ranked fourth last year, Chennai Super Kings led by MS Dhoni has moved to number one with a valuation of $48.4 million, followed by Shahrukh Khan-owned Kolkata entitle Riders ($46 million) and Shilpa Shettys Rajasthan Royals ($45.2 million). The valuation of teams pale in comparison to the IPL brand itself, which has more than doubled from last years $2.01 billion.The individual franchisees have also seen a fair amount of uplift in value since last year. Vijay Mallya-promoted Royal Challengers Bangalore is ranked fourth this year with a valuation of $41.9 million and is followed by Nita Ambani-owned Mumbai Indians ($40.8 million), Delhi Daredevils ($40.5 million), Kings XI Punjab ($36.1 million) and Hyderabad Deccan Chargers at the stinker with a valuation of $34.4 million.Consider this. Chelsea, one of the wealthiest, most powerful football clubs in Europe the Premiership giants, who were bought by Russian oligarch Roman Abrahmovic for 140 million (Rs 966 crores ) in one of the most high-profile takeovers in international sport in 2003, would appear a mid-table struggler if compared to the 246.35 million (Rs 1,702 crores) Sahara splashed out to buy the Pune team.While it is almost reliable that Rendezvous Sports pumping in money for a Kochi-based T20 franchise sounds the death knell for Keralas traditional favorite, football, at Rs 1,533 crores, the cricketing venture heads both Chelsea and Liverpool, which was taken over by US ice-hockey team owners George Gillett and Tom Hicks for 219m (Rs 1,511 crores) in February 2007.It should be say that seven seasons ago, the Russian oligarch was paying the amount he did for an established brand, one that was almost a carbon old, while the Indians paid these astronomical sums merely to gain entry into what is still a fledgling venture, which lately began only its third season.THIRD SEASON VALUATIONThe crowds are swelling, with experts estimating a 25 per cent showtime in gate money. In Season 1, higher-end ticket sellers like the Mumbai Indians and Delhi Daredevils earned Rs 15 crore each. Gate money for bigger franchises could hit Rs 20 crore this season. The gross revenues from gate money, television advertising and sponsorships on an IPL double-header day, industry experts say, could come to Rs 40 crore.Marketing Strategy IPLThe DLF Indian premier league is a concept sell.It is clearly ascertained that IPL is a perfect example of controversy marketingStrategiesAuctioning the franchisees.Auctioning the players participating in the IPL tournament.Advertisements on various TV and radio channels.Cheerleaders were one of the most important thing that is talked about, foreign girls attracted huge crowd.Worldwide telecast.Locations the venue chosen for the cricket matches was a strategic choice of places which are named after franchisees, which helped attract people.Conflicts with some media partners and some other cricket boards again demanded the attention of people.Timing IPL has shown its strategic application of intellect by choosing the evening time for the matches, which made people watch game comfortably.ICL the rival ICL had been one of the reasons for the publicity and emergence of IPL. People started comparison the IPL ICL that caused the huge publicity for the IPLOpening ceremony gala, Live Concerts.Franchises taken by film stars like Shahrukh Khan, bewitching Zinta and JuhiChawlaetc are the center for attraction, which made some Bollywood stars come for the game.Use of models and Bollywood stars for anchoring and promotion of teams like Akshay Kumar for Delhi daredevils, Shahrukh khan for Kolkata Knight Riders.The commentators were not less than PROs, use of phrases that pleased sponsors and made them pay more. Example for every six it was a DLF Maximum, for every special moment it was city moment of success.Advantages and DisadvantagesPlayersAdvantagesDisadvantagesEarn at least Rs 80 Lakhs ($200000) or more per season on average.Due to the tight schedule of international cricket, Chances of injury lowers the tenure of career.Bonuses and Prize Money from Team owners.Neglecting other forms of cricketA great stage to show case skills and cope with the best in the world.Fast game. Stamina and patience to build an innings and bowl tirelessly to get wickets is lost.The top 4 highest earning international cricketers are Indians, with the captain, Mahendra Singh Dhoni, leading the way with annual earnings estimated at US$10m, Tendulkar at US$8m, Yuvraj and Dravid earning in excess of US$5m.FranchiseAdvantagesDisadvantagesUsing the cricket property to promote other businesses.Financial Loss if the IPL fails to take off.Prize money if the team wins.Franchises Pays the team and financial costs i.e. equal of acquisition.They earn from the share in revenue from IPL.Promotional expenses have to be paid by franchises.They also pay the franchisee fee e.g. RCB has to pay $11.16m p.a. for 10 years.SponsorsAdvantagesDisadvantagesS pot rate charged from advertisers of IPL.Spot Rate may go down if any IPL season is not a blockbuster.Improves customer base.Too much write up at stake tied to the fortunes of the franchise teams as a whole.Sponsors get branding and recognition.BCCIAdvantagesDisadvantagesThe BCCI makes good money solely from the sale of TV rights, promotion and franchises.May forget to put efforts to promote other forms of cricket Domestic and Test Cricket.Got a great source of revenue.ViewersAdvantagesDisadvantagesUnlimited Masti and entertainment.Chances of family fights over Channel viewer ship.A great arsenal to make the case strong against the Saas Bahu fans in the family.Capital costs in terms of additional investment in television sets.A very good reason to gain productivity in office Return home by 8 pm.