For Sundar Raman, the game has just begun. As IPL CEO, he is planning for next year’s tournament and the T20 Champions League scheduled to begin in September. Tying up with vendors for revenue generating streams such as merchandising, Raman is in talks with two new sponsors after sealing one deal for $7 million (about Rs29.4 crore). Happy with the response to IPL’s debut run, he attributes the success to quality cricket and the right entertainment mix. However, he points out that the real challenge lies in Season 2, where the format, though accepted readily by consumers, has to be taken forward with more consumer engagement and interaction. Raman talks about what fans can expect in the run-up to the next season. Edited excerpts:
What is the learning for the Board of Control for Cricket in India, team franchisees and sponsors from Season 1?
Everybody is richer after the first year. Most teams have got the composition right. This was the first time India experienced the 20-over format in such high quality and it’s clear that Twenty20 (T20) is not like Test matches or one-day international (ODI) cricket, where you already know the advantages, positioning, weaknesses, etc., of the respective teams. Here, the only exposure to T20 was World Cup T20 in 2007—so it has given us all more insight into the composition of teams and the profile, how to manage it differently from ODI and Test matches. The insights people pick up from the first season will determine what is in store for the coming years.
What was the revenue in the first season? Is it likely to increase?
IPL has already signed deals that add up to $2 billion with sponsors and broadcasters for the next 10 years. For this year, we made $91 million from broadcast rights, $72.4 million from franchisee bids, and sponsorship added up to $30 million. So, for a year it adds up to approximately $200 million . This does not include associated revenues such as ticketing, which is handled by franchisees.
For next year, we are looking at the same except for the sponsor bit, where we are looking at selling a couple of more slots at around $7 million. Depending on when they are sold, it should add $21 million to revenues. We are in discussions with certain brands but nothing has been finalized.
Could you list the factors that contributed to the success of IPL?
Great quality cricket added with some of the best entertainment. Be it Cirque du Soleil performers at the closing ceremony or the opening ceremony that had several celebrated artists participating—it all added a lot more to the games and the spectator support that was highly appreciated. IPL was a season of fantastic innings and records that were created by cricketers. I think the owners added a lot more with their personal interest and involvement and clearly, what Sony Entertainment Television (now Multi Screen Media Pvt. Ltd) brought to the table has been great—their broadcast covered the length and breadth of the country. The impeccable execution and the professional way it was managed made it all come together. These added to the whole IPL package.
Will there be any change in rules on how franchisees can transfer players and bid for new players?
There will be an announcement on guidelines for player transfers and how new players can come on board. We need to issue guidelines that will help structure this process and give clarity and equal opportunity to every franchisee to build a strong contingent. These will be issued before the end of this quarter.
Can team owners raise money through external sources—by publicly listing their companies or through third-party funds?
I think those guidelines have been very clear. As part of the franchisee agreement, they can’t do any such thing for the first three years of ownership. Any changes in ownership can be effected only after three years.
Can we expect a change in team composition in 2009?
We have an option of adding a ninth team after three years and a tenth team after four years. But the way teams will be positioned, or if their names will remain the same, is all up to the franchisees. Currently, a maximum of eight international players is allowed to each team. This may change next season, depending on the guidelines we set; these should also be available when rules on player transfers and new players are determined.
PepsiCo India Holdings Pvt. Ltd won the official beverage partner rights to IPL, yet Coca-Cola Inc. grabbed eyeballs as on-air partner with Multi Screen Media. This led to controversy and a senior Multi Screen Media executive had said Coke might not be allowed to advertise on IPL next year, depending on what the BCCI decides. Does this stand?
All on-ground official partners have a right on-air and both are open marketplaces. If Coke is not the on-air partner, then it’s Pepsi’s choice if it wants to be. This year Pepsi gave IPL a miss on broadcast over Kya Aap Paanchvi Paas Se Tez Hain? (a game show on Star Plus) and that was clearly a decision they took based on their judgement. But it was not that the opportunity was not given to Pepsi and made available to Coke—no, that’s not true.
Will on-ground and on-air partners have to collaborate for Season 2?
It’s a free market economy and everyone has a right to advertise where they want if they can afford it. The value for any brand appreciates dramatically if they leverage the space properly and that happens only if there is a presence on all possible platforms—on-ground, on-air and in the digital space.
Will IPL be packaged differently?
IPL is just going to be good quality cricket, the same teams, better entertainment, nothing dramatically different. Last year was concept-selling. We believe that it takes time to establish a good concept; we’ve been fortunate with the adoption of IPL by consumers and we’ll only want to build on that.
After the controversy on cheerleaders, will they be banned?
Everybody has a point of view but it’s all up to the franchisees to have the cheerleaders or not. In fact, if it adds to the IPL experience without being lewd then it’s okay. It’s unfortunate that these controversies exist, but what did work for IPL is the cricket.
Mint reported that the agreement between BCCI and IMG World, IPL’s event management company, might be revised. Will there be any other management change?
All I can say is that everybody will do what is in the interest of the business. So, if a change is needed, there will be a change. But as of now, things stay the way they have been.
Recently, Dave Richardson of ICC’s anti-corruption unit talked about how IPL faces the risk of match-fixing. What is BCCI doing to guard against this?
IPL functions under the same anti-corruption protocols ICC is governed by. In fact, the ICC head of anti-corruption heads the mandate for IPL, so there’s no need to worry. All protocols are as per ICC guidelines. We have taken all security measures to make sure the anti-corruption and security unit performs its duties. In cricket there’s no first and last year where such measures are concerned, as the format may be moved, but the games, measures and processes remain the same. So, it’s not like we will be adding any new rules to combat corruption.
What can viewers expect as the next visible step from IPL?
Clearly, IPL has done the most difficult part of the job—establishing awareness and thankfully it has got a good amount of following. Now, it’s important to look at different ways to engage with consumers. Consumers will see a lot of activity from franchise owners who will be focusing very strongly on building team loyalties. Recently, I was watching the Middlesex finals and there was a spectator wearing a Rajasthan Royals T-shirt—this is the kind of awareness and visibility we are going to build. Our merchandising efforts are in full swing now.