New Delhi: From T-shirts and caps, key chains and pens to lassi glasses and chewing gum, owners of Indian Premier League (IPL) teams are preparing to roll out an array of cricketing merchandise as they seek an income boost in the Twenty20 tournament’s second edition.
Sports merchandising, which contributes 30-35% of total revenue for most sports bodies in developed markets such as the US and the UK, is still a new concept in India, where the biggest chunk of revenue for the eight IPL franchisees comes from a so-called central pool, which includes media rights and sponsorship revenue.
Money game: Players of Kings XI Punjab during the first season of IPL. Various teams look to sell items such as lassi glasses, watches, keychains, chewing gums and special autographed items during the second season. Atul Yadav / PTI
The teams earned Rs30-35 crore each from the central pool last year, in addition to a modest amount of revenue from gate receipts, local sponsorships, uniform merchandising and licensing.
Estimates from at least three executives in three different IPL franchisees, who didn’t want to be named, indicate that the eight teams are looking at selling merchandise worth a combined Rs35-40 crore this year. The teams’ own share of this amount will likely be around Rs6-8 crore, with the rest of the money going to merchandise partners and licensees, who will pay only royalty to the franchisees.
Chennai Super Kings, owned by Hyderabad-based India Cements Ltd and led by national team captain Mahendra Singh Dhoni, has tied up in merchandising deals with retailer Future Group, chewing-gum maker Wrigley India Pvt. Ltd, pen-maker Camlin Ltd and cola-maker PepsiCo India Holdings Pvt. Ltd.
It plans to launch an “affordable” range of apparel and watches, chewing gum, writing instruments and co-branded beverages likely to hit the market as early as by mid-March.
“This season, we expect around 8-10% of our revenues other than that from central pool to come from merchandise,” said Rakesh Singh, marketing head, India Cements. The franchisee already has a partnership with sportswear retailer Reebok India and men’s apparel maker Peter England.
“Even our existing partners Reebok and Peter England are working on an affordable range of apparel,” Singh said.
Mohali-based Kings XI Punjab, co-owned by Bollywood actor Preity Zinta, is looking at selling items such as lassi (butter milk) glasses, mugs, badges and special autographed items at points of ticket sales. The team also has a tie-up for merchandise with textile manufacturer Bombay Dyeing and Manufacturing Co. Ltd.
Rajesh Metal Industries, which makes steel products under the Hot Muggs brand, is targeting sales of up to Rs12 crore in five years from items it makes for King’s XI Punjab, said director Rajat Jain.
Likewise, Kolkata Knight Riders, the team co-owned by actor Shah Rukh Khan, is also expanding its portfolio of products.
“This time, we will have many more items in the kitty such as mugs, pens and keychains for which we are actively looking for right partners,” said Joy Bhattacharya, chief executive of the team.
Besides expanding the range of merchandise, the franchisees are also looking at launching affordable products in an effort to boost sales.
Delhi Daredevils, the team owned by GMR Holdings Ltd and led by opening batsman Virender Sehwag, tied up with sportswear maker Adidas India Pvt. Ltd last year. This year it has also tied up with Delhi-based garment maker Genesis India.
“Genesis will not only make items such as cheering signs, posters and key chains for us, but also non-branded T-shirts at lower price points,” said Vidur Naik, marketing manager of the team.
This time, the Adidas merchandise will be available at 71 stores, up from 45 stores last year, he added.
Darshan M., vice-president of commercial operations for Deccan Chargers, the Hyderabad franchise owned by publisher Deccan Chronicle Holdings Ltd, said, “Last year, Nike was our partner, but this time it is Puma as the company gave us a better deal and is willing to develop an affordable range of apparel and other products.”
One of the primary reasons for the stress on “affordable” prices is to check sales of fake products that are available at much cheaper prices. “Counterfeit is a big problem here (in India). Last time, I saw a lot of fans wearing fake T-shirts. Availability of more affordable original products will help plug this hole,” said Darshan.
Even as efforts to build the merchandise portfolio gain ground, most franchisees say it will take the segment some time to generate substantial sales.
“We are expecting a double-digit growth in the revenues coming from merchandise this year as compared to the last one,” said a senior executive at one of the IPL teams who didn’t want to be named. “However, each franchisee will still get less than a crore (of rupees) this season. It will take at least two years for every team owner to fetch a couple of crores.”