The monetary overload of IPL could soon be seeing a reality check
Critics are not too off the mark when they accuse IPL of being more about money than about cricket. Blame Lalit Modi for that. Through his business and managerial acumen, Modi has ensured that money pours from different directions – internet rights, theatrical screening in bars, after match parties, sponsorships on strategic time-outs and even zeppelins. As per a Brand Finance study, the estimated total worth of IPL is an astounding $4 billion. To achieve this, it is said that Modi has handled broadcasters, sponsors, advertisers and even cricket fans quite shrewdly. SET MAX capitulated on Modi’s demand, in a tug-of-war that reached the court, eventually raising the value of IPL’s ownership right from $1 billion to $1.6 billion. But the TRPs of IPL have plummeted from 8.21 last year (when it was in South Africa), to 5.48 by the second match this year. The very excesses of IPL ensure that the franchisee model hinges more on valuations rather than actual revenue. A recent report by Sporting Intelligence confirms that IPL is the second highest paid league in the world on a pro-rata basis, beaten only by NBA. Royal Challengers Bangalore is the richest team, with each player earning £56,833 on an average per week!
The new franchisees of Pune & Kochi have been sold at a mind-boggling $370 million and $333.3 million respectively. Ironically, only two of the current ones have seen profits so far. Promoters have started to drool at the prospect of building brand equity to maximise valuations in case of a stake sale.
Critics are not too off the mark when they accuse IPL of being more about money than about cricket. Blame Lalit Modi for that. Through his business and managerial acumen, Modi has ensured that money pours from different directions – internet rights, theatrical screening in bars, after match parties, sponsorships on strategic time-outs and even zeppelins. As per a Brand Finance study, the estimated total worth of IPL is an astounding $4 billion. To achieve this, it is said that Modi has handled broadcasters, sponsors, advertisers and even cricket fans quite shrewdly. SET MAX capitulated on Modi’s demand, in a tug-of-war that reached the court, eventually raising the value of IPL’s ownership right from $1 billion to $1.6 billion. But the TRPs of IPL have plummeted from 8.21 last year (when it was in South Africa), to 5.48 by the second match this year. The very excesses of IPL ensure that the franchisee model hinges more on valuations rather than actual revenue. A recent report by Sporting Intelligence confirms that IPL is the second highest paid league in the world on a pro-rata basis, beaten only by NBA. Royal Challengers Bangalore is the richest team, with each player earning £56,833 on an average per week!
The new franchisees of Pune & Kochi have been sold at a mind-boggling $370 million and $333.3 million respectively. Ironically, only two of the current ones have seen profits so far. Promoters have started to drool at the prospect of building brand equity to maximise valuations in case of a stake sale.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
