PremiumMohit Burman, promoter of Kings XI Punjab, talks about the economics of owning an IPL team, its volatile journey over the last ten years and his vision for the popular T20 league going forward
New Delhi: Kings XI Punjab, co-owned by Preity Zinta, Ness Wadia, Karan Paul and Mohit Burman, outspent a host of rival teams in the players’ auction for the 11th edition of the Indian Premier League (IPL), splurging a total of Rs74.15 crore on 21 players. This is the highest the team has spent so far. Indian off spinner Ravichandran Ashwin will captain the team this season which boasts of players like K.L. Rahul, Axar Patel and Karun Nair among others . In the run up to season 11, Mohit Burman, promoter of Kings XI Punjab and director at Dabur India Ltd, talks about the economics of owning an IPL team, its volatile journey over the last ten years and his vision for the popular T20 league going forward. Edited Excerpts:
Did the auction held late last month go as per plan?
Yes, I think this is the best auction we have ever had. Not for any other reason but because we put a lot of work behind it. We’ve had Virender Sehwag guiding us for a long time of course but we also have a new coach Brad Hodge this time. Luckily, I was able to get two minds. This is also the first year where we have used professional statistical analysis from a third party. So, they did a lot of permutations and combinations for us which we used to do in-house earlier. You can never have an exact calculation but generally you keep two or three options for each position and you try and fill them up as the names come along.
This year teams picked younger Indian players from the uncapped category. Your team also picked eight such players . What was the overall strategy?
Our basic strategy was to get more Indian players. The whole idea in IPL has now changed to getting younger players for a longer period of time. And to obviously train them to be able to be with you. Because as you know, IPL is the hunting ground for discovery of new talent.
How do you feel about the return of the two suspended teams ?
I’m neither judge nor jury. All I can say is that it doesn’t affect me in any way. Because even if they weren’t there, there would be two other teams in their place. It doesn’t affect my team or us in any way but if you look at it historically or anywhere in the world, if it’s a case of match fixing then there would be termination.
Do you think this will impact the brand value of IPL?
We did have that, there were one or two years where I believe things weren’t looking good. I remember we used to go meet our sponsors and all they used to say was IPL chalega ki nahi chalega? (Will IPL work or not?) But now look at what Star has paid.
We were running a very tight ship. And our player costs which is the main cost was always around the Rs50 crore mark. And this time we spent Rs74.15 crore including the players that we retained. This is the highest we have ever spent. And the reason was because we had the central revenue—what you get back from the BCCI—which has gone up substantially because of the cost of the media rights. (In September 2017, Star India Pvt. Ltd won television, digital, Indian and global media rights to the IPL for the next five seasons for Rs16,347.50 crore.)
What keeps you invested in IPL after 10 years? Do the numbers add up in terms of financial returns?
In sports globally, returns don’t come easy. But I’m happy now because of what has happened with the media rights for IPL. So, we lost money the first seven years. In the first year of course it wasn’t tested so sponsorships didn’t exist.
So anyway, the first year we lost a lot of money. It was our biggest loss of close to Rs20 crore. Then as time went on we gradually learnt how to negotiate better, we also rationalised our support staff and the number of players after the first few years. None of us really knew how to run a sports team. So, it’s a curve you learn with time. And then slowly as time went by the loss became less and less.
We had a sudden hiccup in our third or fourth year when we got suspended because it was alleged that we had a link to Lalit Modi (first chairman of the IPL). We eventually won the court case and did a settlement with the BCCI. So that year we couldn’t retain our players and we lost all our Indian players. It was tough to build our team for the next few seasons.
We broke even in the seventh year. Over six years we lost Rs70 crore. But for the last three years we have made money. We make single digit profits because at the end of the day, as I said, we were running a tight ship. The biggest year in terms of profit was when we came on top of the league (in 2014) and made Rs12-13 crore in profit. And since then its been Rs6-7 crore for the following two years.
How have conversations with brands changed over the years?
The whole universe of cricket sponsors is very limited in India. And there are eight teams. The player auction happens in February, so no deals can be closed before that. Don’t forget all the 6-7 sponsors are meeting the same people. Sometimes they end up playing one against each other. Some of them wait till the last minute to get the cheapest rates. Some brands want title sponsorship irrespective of which team they associate with. But it’s all changing now, we closed our title sponsorship even before we went into the auction. It’s the highest we have ever got. So, I’m happy, I’m happy with the team. The only problem we have is our ticket sales in Punjab which we will try and operate better.
Where do you see IPL in the next ten years?
I think there are two things that need to happen to make this a truly global tournament. It has to go out of the seven week window, it has to become a little bit longer. If you look at all the other leagues they go on for much longer. The other thing that should be done is every few years it should be taken outside the country. That will help the brand to go global.
Personally, what has been your favourite moment in the tournament so far?
Not moment but my favourite season has to be the one in 2014 where we won every single game in the UAE. In terms of points that was a leadership knockout.
