If you think “getting Bangalored” is still a metaphor for the loss of Western computer software and network maintenance jobs to cheaper workers in India, then you aren’t following the Washington Redskins cheerleaders.
Twelve of the “First Ladies of Football,” as they like to call themselves, are in India’s code-writing capital on work.
Yes, this is outsourcing in reverse; and no, India hasn’t taken to playing American football. The National Football League in India refers to a domestic soccer competition; and even that has recently undergone a name change. The cheerleaders are supporting Royal Challengers Bangalore, one of the teams in India’s newly born cricket league.
The Indian Premier League (IPL), a 44-day, 59-match annual fixture, has already emerged as one of the largest and most-promising business opportunities in India in recent years. Commentators have mostly focused on how lucrative the league is for the players and the Indian cricket board; cricket enthusiasts have considered the pros and cons of the game’s condensed format: It finishes within three hours; a Test match, the classical version, can take five days.
More financially oriented analysts have wondered if it would make a profit for the team owners, including billionaire industrialist Mukesh Ambani, spirits tycoon Vijay Mallya and Bollywood actor Shah Rukh Khan.
To me, what’s striking about IPL is just how global it is. That openness of the teams—rather than the short-term economics of what they pay the players or earn from ticket sales—will determine the competition’s success.
The international character isn’t limited to having Redskins cheerleaders. Cricketers from Australia, Bangladesh, Pakistan, Sri Lanka, West Indies, Zimbabwe, South Africa and New Zealand have already signed up for the league, while those from the UK are disappointed with the England and Wales Cricket Board, which isn’t allowing them to play.
In most other businesses, it’s usually India that’s erecting walls to keep foreigners out. For instance, overseas companies can’t own more than a 26% stake in Indian insurance, defence production or newspaper publication companies.
The premier league is just the opposite. Every team is allowed to have as many as four overseas players in the 11-member contingent that it fields in any match.
Contrast this with a heavily regulated industry such as telecommunications, where the government prohibits any foreigner from holding a key position in a local company.
To be sure, the cricket league, too, has a “mandate.” One of the goals behind starting a domestic competition is to discover new, domestic talent. But the planners have been astute to keep reserved slots for local lads to a minimum and allow operational flexibility to the team owners. They’re free to do what they need to do to make the league successful.
And this is undoubtedly the better approach. A thriving franchise that’s open to the world will do more to unearth globally competitive local talent than a moribund domestic league that’s open only to sons of the soil.
The Board of Control for Cricket in India, which governs the sport, has already earned about $2 billion (Rs8,000 crore) from selling media rights for 10 years and from franchise fees. The eight teams—or franchises—have, in turn, contracted players at huge salaries. Ishant Sharma, a 19-year-old from Delhi, will earn $1 million a year, or $2,500 for every ball that he may end up bowling at a batsman.
How good is the money, really? Ask Paul Collingwood, the captain of the English cricket team for one-day matches. “I’d be lying if I said I hadn’t thought about the IPL,” Collingwood told the Sun newspaper. “If you had the chance to earn four times your normal money in the next six weeks, would you take it?”
Collingwood is perhaps being forced to pass up as much as $640,000, according to a report by David Parker, an analyst at Frontier Economics. Parker has worked out a regression equation, which, he claims, predicts 72% of the amount that players ultimately commanded at the Indian auction.
Among the variables that can’t be modelled is “marketing value,” which probably explains why Australian cricketer Andrew Symonds, who made headlines after accusing an Indian player of racism, got a $1.35 million bid, more than double the amount predicted by Parker’s equation. Whether teams make a profit will depend partly on sustaining the initial enthusiasm shown by television audiences.
The other determinant will be the price at which a young, unproven player, bought on the cheap, can be flipped over to another team. That market will take time to develop.
We don’t yet have a measure of IPL’s potential as a business. There is, however, a rough gauge of its popularity. I took the help of Google Trends to rank the Web searches globally in the past 30 days on: IPL, Obama, Clinton and Tibet. IPL was trailing the others until last week; and now—after the start of the series—it’s a very close second to Barack Obama, the Democratic US presidential hopeful.
The Redskin cheerleaders, who are auditioning girls in India to set up a permanent local presence, may be on to a good thing.