Time: 10pm. Venue: ITC Grand Central, Parel, Mumbai.
After a day-long cricket workshop, interspersed with meetings with sponsors and franchisees, the visibly exhausted management squad of the Indian Premier League (IPL)—the domestic league launched by the Board of Control for Cricket in India (BCCI)—is headed for the bar. CEO Sundar Raman is not with them. He still has some work to finish. He has to give a long-promised interview before he can call it a day.
The weary look on his face makes the reporter a bit anxious about the quality of the ensuing conversation. “Life has been a bit demanding of late,” he begins, “but I am not complaining. I am more excited than I have ever been in my life.”
The assertion, indeed, is borne out by the lively chat that follows. To be sure, for somebody leading a four-month-old enterprise whose value has crossed Rs7,000 crore even before it takes off, life can’t be simple. Yet, Raman can’t complain—he has a job that was coveted by most high ranking media and marketing professionals in the industry.
During his more than decade-old career in media buying, Raman remained closely involved with the business of cricket. Before joining IPL, he headed media buying house GroupM’s leading agency MindShare. Even then, he was a much sought-after man, who controlled the multimillion-dollar advertising budgets of firms such as PepsiCo and Motorola. Personally, too, he is a “great cricket buff”. “IPL is the culmination of personal and professional ambitions,” he says.
The shift to the other side of the table may have been seamless, but Raman seems conscious of the change in his eminence. There is an air of command in the way he speaks; he is more guarded in his words, and checks on “things” he is going to be quoted on.
As for IPL, he says, “You ain’t seen anything yet”. Consider this: For the first time in the history of Indian cricket, eight local teams will lock horns with each other. For the first time, stalwarts such as Sachin Tendulkar and Sourav Ganguly will be pitted against each other, and their fans will have to choose between them. It will be for the first time that international players of the stature of Graeme Smith and Ricky Ponting will play on Indian ground with Indian players for Indian teams in a domestic Indian league. And, the event will be covered globally. “I am happy to be part of this historic moment in Indian cricket,” says Raman.
There is immense interest in IPL for reasons other than the sport, too. For, IPL is well on its way to becoming the biggest commercial venture in the area of sports.
Broadcasters, marketers, advertisers and savvy businessmen have bet millions of dollars on the league. Many fortunes are at stake. Supporters and detractors, all have more than a few questions on their minds. The biggest one of them all: Will IPL be a success? Raman answers some such queries in an exclusive interview with Mint.
WPP is one of the largest and well regarded marketing communication companies in the world. You had a good thing going there. What explains the shift to BCCI, a body that allegedly runs arbitrarily with little professionalism?
That is an unkind remark. I don’t agree with such allegations. I would not have joined them if I wasn’t convinced they are professionals. It was largely the vision behind IPL that inspired me to jump to the opportunity. The vision of the IPL governing council, led by chairman Lalit Modi, is to establish IPL as the biggest cricket league in the world, and we are on our way to achieving that goal.
I am convinced that IPL will be something spectacular, and I am happy to be part of the team that is taking it through.
What led to the launch of IPL, especially after the Essel Group launched its domestic league, the Indian Cricket League (ICL)?
It is a misrepresentation that we launched after the launch of the other league.
IPL has been the dream of the man (Modi) for 13 years. They had been working on it for a long time. It takes time to build and launch a good product, and I don’t need to say much about the quality of our product versus theirs.
Does this imply that the other league is inferior?
I didn’t say that. All I am saying is that at a fundamental level, the two leagues are structured and organized quite differently.
IPL is far more democratic in the way it has been constituted. We have an ownership model, with franchises being masters of their teams. Their (ICL’s) teams have central ownership; they belong to one entity. Then, we have made a commitment to build infrastructure, to build the sport, nurture talent and improve the status of cricket at the local level. We have an investment redeployment plan and an agenda. I can’t say that of the other league. Because it is purely commercially oriented.
They have been making a similar allegation against you.
Well, then you have to look at the facts. Theirs is a purely commercial league. The whole money they generate remains with them. Whereas, in our case, we will be sharing all (that) we generate with our partners and investing it in the uplift of the game. Franchises themselves will be making investments in building talent and infrastructure. It is crucial for their own enterprise. They will be investing in improving local stadia and their look and feel because IPL will be broadcast not just across the country but in global markets as well. Investment on these two fronts is only going to help the sport. So, IPL is truly a domestic league that will invest the money it generates in building domestic cricket.
But, questions are being raised about the way BCCI is exploiting IPL commercially. You have sold all possible rights to media, marketers and advertisers. Is this blatant commercialization good for the sport? Is the concern that it may shift the focus from the game to the business well placed?
All such concerns are totally misplaced. We all live in a free market. Nobody will ever pay for anything unless they see some value in it. Cricket has huge unexploited commercial potential. Look at soccer in Europe and basketball in the US, and you will know how deals are done. Cricket viewership is more than that of soccer, yet its sponsorship market is much smaller than the sport. Why? Because it hadn’t been explored to its fullest.
Also, we believe it is important for any sport to be financially independent. We don’t think being dependent on state grants or charity is a good survival tactic. The status of most sports in India is a testimony to this belief.
Also, all the money that IPL is raising is not going into our pockets. It is going to be shared with our franchisee partners (See chart). We have already drawn out a formula for that. The franchises are also going to re-channelize the money back into the sport and the teams. So, all concerns about huge money being raised and the game getting corrupted are misplaced.
Some people are of the view that franchises went overboard in bidding for the teams and players, and they may not be able to recover their investments...
We will be naive to presume that shrewd businessmen such as Mukesh Ambani and Vijay Mallya don’t know how to run their businesses. IPL franchisees are savvy entrepreneurs. They would know a good business proposition from a bad one. Their bids reflect the value and the potential they see in the enterprise. We operate in a free market. Market forces decide the fair value of any product or service. And I don’t think franchises will make outrageous bids just for the heck of it. They are not fighting a battle of prestige. Then, IPL is not just a business opportunity to make money. It provides a great platform for one’s own marketing, brand building, and striking connect with end consumers.
Also, please remember team ownerships are for life after the first 10 years. That isn’t a bad deal. Then, during the first 10 years, IPL will be sharing a major chunk of its revenues with franchises. All of them may not start making money from the first year, but there is no way they will lose anything. I think they all know what they are doing.
Yet, I would rather wait for the game to begin. Whether teams will make money or not will soon be reflected on respective balance sheets.
Questions have also been raised about the kind of money that is flowing into players’ pockets. People think this might distract them from the game.
Well, if that happens, it will be the end for them.
IPL is totally performance-oriented. Each team would want to win because there is so much at stake for everyone. So, all of them have to have performers. There will be no room for non-performers. The bets that have been placed on players are for their ability to play well and the potential they have. If that gets eroded for whatever reason, they will lose the reason for being in the game, and their value.
But, let me also point out one thing here: People complain when players get paid, and they complain when they don’t get paid.
IPL has been talking about boosting local talent and infrastructure. How does one know it won’t remain just rhetoric?
Look at the way IPL is structured. The teams can’t survive if they don’t invest in nurturing talent. Here, we are not talking about 12 players in one team, we are talking about 12 players in eight teams.
Franchises will have to find good talent, and invest in building them. There will be intense competition between teams to win. Needless to say, winning will be crucial. All investment made has to be recovered through good returns. And, how do you generate good returns? Well, by making sure you produce a good product. And how do you get a good product? By getting all the ingredients right. And what are the ingredients, in this case? Good players and good infrastructure, so that viewers and advertisers who are going to buy into the game get a good experience. It is simple. Franchises have to invest in talent and infrastructure. It is in their own interest.
Talking of a free market, why do you have a restriction on the number of foreign players a team can hire? There are no such restrictions on hiring in global sports events such as the English Premier League.
We believe India has a huge reservoir of local talent. The way we have structured things is, each team will have to have four players from their catchment, four below the age of 22, and a maximum of four international players. It brings in a good mix of local, national, international and young talent.
We agree that there is a significant amount of global talent available. They will help us compete better, coach us better and play better. But, right now, we wish to support the local talent.
Cricket in India has been a national sport. But, regional loyalties might take time to build or they may never get built. What happens then?
Indeed, city loyalties are going to take time to build. But then, every big venture takes time to build. Nothing is created in a day. With IPL, we are trying to break new ground. City pride is a new sports culture that will need to be fostered. We are aware it is a tough job. That is the reason every team, right now, is focusing on building its brand and capturing viewers’ fancy. It is not an easy target to achieve, but there is nothing to suggest that it is impossible. We are creating something for the first time ever, and we are confident of its success.
What are the factors that are crucial to IPL’s success?
It is one basic thing: a good game. Serious, good quality cricket is all we need to establish IPL. Indeed, good branding and creating equity among our target audience is important as well. But, to start with, making sure that we give viewers serious, competitive cricket is the most important thing.
Now that you are convinced IPL is going to be a huge success, do you foresee the league eating into Team India’s share of viewership and commercial revenues?
No, never. The two teams represent different values. IPL is about local pride, Team (India) represents national pride. They will operate in their different spheres.
Team India will always be the crown jewel. It is a very strong property in itself, and it has no competition from IPL.
But, with advertisers making such heavy investments in IPL, will they be left with new budgets to support Team India?
The Indian economy is expanding consistently right now. Advertising expenditure is growing at 20%. New categories such as retail are coming in. Old ones such as automobiles, beverages are growing at a scorching pace. Cricket provides a platform that is a single unifier across India. You are talking of a property that every consumer in India, irrespective of age, gender and language barrier, enjoys. Advertisers will continue to invest in cricket for as long as cricket delivers all this.
But the number of cricket advertisers has not actually gone up, barring a few exceptions. Even if you look at IPL’s current list of advertisers, most of them are traditional cricket loyalists such as Pepsi, Hero Honda and Coca-Cola. So, not everybody seems convinced about the value of cricket yet.
Cricket has not actually exploited all its advertising potential.
Today, consumers on TV are watching either soap operas or reality shows. These programmes, at the end of the day, entertain and they have a loyal base of advertisers who support them for this.
We believe we can tap into this set. They didn’t advertise on cricket because they thought it was only for men. IPL is going to change that perception. It will be wholesome entertainment for viewers across the board, and advertisers will follow.
With 44 days of IPL and around 100 days of international cricket in India, don’t you think there will be too much cricket on-air all of a sudden? Can this lead to fatigue among viewers?
Do you know how many soaps there are on TV right now? And I haven’t heard anybody talk about fatigue setting in because of too many soaps. People watch what they like to watch.
It has been proved time and again that people in this country love cricket. They don’t call it a religion for no reason. And, people will continue to watch cricket, more or less, for as long as the quality of the game played is good. And you (can) rest assured about the quality of cricket IPL will serve. Just wait and watch.