be ES) CHINA'S ere) gi OW larg: Meats x ON ores & 1 3 INHUMAN RIGHTS Banas AX ale Nee OROCoverstory ma By Kaveree Bamzai and Sharda Ugra 1's a heady cocktail of sports, entertainment and business and no matter how much India imbibes, it refuses to get a hangover. The third year of the Indian Premier League (1?) saw the arrival of two new teams, Pune and Kochi, for a combined $700 million, almost seven times what Mukesh Ambani paid for the Mumbai Indians in 2008. Sahara India and a hastily-assembled conglomerate of Anchor Switches, a diamond businessman, two builders and a ship-breaking sultan are only the latest in a long line of businessmen, actors and men married to or dating actors who arrived at the same realisation. That 45 days of being flashed onscreen almost as often as keters makes up for run-ins with local cricket authorities, careful handling of sensitive sporting stars, nail-biting finishes and y ing ways of the ringmaster/conductor/head croupier, 1°. Chairman Lalit Modi BILLION Abrand value that has more than doubled to $4.13 billion 5 and two new teams that cost about as much as the eight | PL IS now of 2008. The IPL now rivals top corporate houses. ss, the ever-more creative revenue ee ee eS ROYALS DN iavall ee eto Zone = etd a — Media (Lachian Murdoch, i uss PERSE rm M no See un ; ‘Shetty and Raj Kundra) ree A eee ete cost of toa for a 10-year periodALLEIGHTIPLTEAM CAPTAINS ATTHE Eee a al CU rls premieres a} LLAR BABY the new mone ee eS CL TVW) ‘SUBRATA ROY SHAILENDRA a ce eT) 8 fi ees Dus CE SR ous ae cn ee ia Ces ee sae poopie y Chronicle Pe cd ener ers eae) Costofteam: $107mn | \Costoftean: $92 mn, Costofteam: $11L9mn | Costofteam: $370 min} Cost of team:$333-33mn|“Merchandising will explode” ST ee ae Perea eta eee eee re cee era te ee ee a ee ee ne ae a ee OR eee ae Oe ae A. Yes, but a little bit. I expected bids in the $325 million range. eee eae rete eee ‘was around $275 million and we proposed $250 million as the minimum, The number we came up is based on a fourth year cash flow breakeven. Q. How do you expect the new teams to make between $37 million and $33 million in Season 4? A. They need to understand that the model we have built is very different from all other models in the world. They need to embrace the model and not only think of their team but of the whole league as one. If people try to tinker with the plan it can be disastrous too. If people start. to find ways to beat the system for the good of their own team, then we will head for Perens 0. What is the IPL’s plan? Nene ate coe a oe Peer rete tere Lr an es players. That s the key to the success of the league. Teams should come first in building the league and not players in a particular team. Src ne in the world. But we have done it and rete eee eG it works. This keeps teams evenly balanced, games unpredictable, viewors hooked. Ratings Keep stable or go up, excitement inereasos: We also now need to koop expanding distribution globally, to create eye Oe eet ee eet re eet aia need to be in the market for ticketing and hespitality by October this year and ‘every year, and at least a year in advance. Exhibition matches overseas will bea great source of revenue. We will begin 2011 with that lence Measurement (ram), the av= erage Television Rating Points (rer) of rst 14 matches in Season 1 was 4.97; in Season 2 it was 4.52, and in Season 3 it’s grown to 4.69. If wi-1 reached 77 million people in the first 14 matches, 1p|-2 went to 96.million and s at 108 million. The ratings have also raised team ¢ swelling, with per cent jumpin her-ond The crowds are sxperts estimating a money. In Season 1, b licket sellers like the Mumbai Indians and Delhi Daredevils earned Rs 15 crore for bigger franchises this season, Th each. Gate mone could hit Rs 20 cror 3s from gate money, televi- ‘and sponsorships on an uble-header day, industry expert ld touch Rs 40 crore, The question now is will the new teams be able to recover their higher costs? To break even, Team Sahara will have to make atleast: ore) currently unlikely evenIPL'S SUCCESS, SOME EXPERTS SAY, IS NOT DEPENDENT ON CONSISTENT QUICK PROFITS BUT ON THE VERY IDEA OF GROWTH (FROM LEFT CHEERLEADERS RULE; ANILKUMBLE AND [MARK BOUCHER CELEBRATE: (BELOW) WINNERS OF THE. KOCHI FRANCHISE REJOICE Modi told mnia Topsy that the new ‘teams, “need-to understand that the model we have built is very different from all other models in the world. They need to embrace it and not only think of their team but of the whole Teague as one, Once that realisation sts in—it will be win-win for all.” As the new teams scramble, Modi ‘will continue to venture further. New rights such as live streain mobile Internet nd sin + phone applications, which he hopes will explode once 36 technology is introdueed in India, He also hopes to tap international audi fence, changing the 1's platform in the UK in Season 3 from the bankrupt a mnv4. jways about tho money, For Kingfisher, the premfum is a pit anee compared to the ban on liquor ad vertising Vijay enting, Por GMR, the association with a city jew International airport they facing to complete before the thGamesisworth the $84 million they paid for the Daredevils. At aboard meeting of India Cements, who own the Chennai Super Kings (named after the Super Kings cement brand) consensus was that owning a franchise was worth the eost when treated like a brand marketing expense, ‘The PL is also turning out to be a party for the wives and children. ‘Whether it is young Siddharth Mallya ‘whose romantic assignations are now conducted on national 1v oF Gayatri Reddy who switches from a serious journalistic career at her futher's newspaper to hang out with global es atthe i auction, the league ultimate celebutante ball. For largely unemployed actors such as Shilpa Shetty of the Rajasthan Royals ty Zinta of Kings is unprecedented and uy No. wondi mond dealers and re nates teamed up to buy the Kochi franchise, “'mjusta businessman anderstory ‘THEIPLS SOCIAL WHIRL: (FROM LEFT) KUNDRAAND SHETTY, MUKESH AMBANI WITH WITH WIFE NITAAND DAUGHTER ISHA, ‘SIDDHARTH MALLYA, MODI WITH VAY MALLYA (TOP) AND DECCAN CHARGERS’ DUO GAYATRIAND VENKATTRAM REDDY have absolutely no interest in cricket, consortium member Mukul Patel was quoted in a newspaper. Patel and part nor Vipul Shah own Gujarat-based Shree Ram Group of Industries, which isin the ship-recycling business. To his and the rest of the Kochi franchise called Rendezvous Sports World, led by Shailendra Gaikwad and Pooja Gulati Dilip Mehta, of Rosy Blue Diamond and jewellery brand Orra: and Mehul Shah of Gujarat-based Anchor Switches, the wis the first step into cricket's IP-El Dorado. What awails them are finding re enue streams toflood the franchise co fors and a diplomatic maze that is the multi-owner group. Yes, the valuations do receive a real boost. When British businessman Raj Kundra bought 12 per cent equity in Emerging Media for $15 million, it raised the price of the Rajasthan Royals team from $67 million to $140 million. But many owners are like multiple captains. Kings XI Punjab are the hest.example: this woek one ofits joint owners Mohit Burman said the team would be sold if they wore offered more than $250 million. In quick response, the Wadia group speaking for another joint, Kings Xlowner Ness Wadia, said talk ofa sale was “not correct”. Obviously, in both fact and conduct. ID espite the Pts glitz-blitz, cricket's defenders, and they do stillexist, continue to think ofitas Evil Incarnate and Modi as ChiefPriest. Or at leastits Gordon Gekko ofthe ‘greed is good’ school of business. What c not be wished away is the 1's popu- larity and Modi’s ability to coast over any failures—be it the failure of the theatrical screenings to take off or ob: sequious commentators. Modi nores.all criticism, excited at the idea ofrunning the semi-finals and final in D, at double the ticket price. The tri, has been Modi’s making Globally, he is now India’s best known ig- sports official (Suresh Kalmadi, eat your heart out) sought after by media from San Francisco to Sydney. From his 1992 entry into the world of busi- ness to a stuttering tie-up tv deal with ESPN, he was one of the least success- fulscions ofa Modi empire involved in metal, healthcare, real estate and to- bacco (Godfrey Philips remains his baby). Ever sinee the wn. bloomed in 2008, though, he is now the ‘most-noticed and best-known son He has spent a deeade trying to ‘enter the poct via Mumbai, Punjab and then Rajasthan, He then allied himself to the Sharad Pawar-led faction that sought to oust the then sect monarch Jagmohan Dalmiya and becam ent face. He had once p tind down in his Worl office, kic airand angrily askinga journalist, “sot kisi kijaagir hai kya” (s the voct any one's property”). Today, many believe Modi has made it his own. The success of Pt Season 1 was the honeymoon phase, Season 2 a bold exTHE SUCCESS OF SEASON 1 WAS ITS HONEYMOON PHASE, SEASON 2 WAS A BOLD EXPERIMENT AND SEASON 31S THE RETURN OF THE NATIVE periment that deserved support, and ow Season 3 is the return of the na- tive. What about Season 4? Will the two new teams make money? They will have to pay the wr. $37 million a year or at least $33.3 million a year, besides paying players, manage- ment and other costs. Even a successful franchise like the Mumbai Indians pay $11 million a year to the ret under th conditions of the bid and, spend another $8 million as player fees, $2 million on othor expenses. It earns $15 million a year from the central revenue pool and $11 million a year from local revenue Hiren Pandit, managing partner of GroupM ESP, says the maths shows that a price point of about $310 to $320 mil- lion can be earned in 10 years, but with a strong focus on local earnings. “If the new bidders are relying only on central revenue to prop them T see this as a struggle. Learnings from international Jeagues clearly shows us that teams that, build « strong local base ean exiract the maximum from local revenues.” The valuation business itso is noto- riously cryptic, more so in a league ‘where rules change rapidly, The 1's success, some experts say, is not de- pendent on consistent. quick profits but on the very idea of growih. ‘This is why many believe Season 4 will make Season 1 lookas eventful as a kitty party. It is going to take us all—cricketers, cheerleaders, crities—to a new level Ask the two mew teams. Maharashtra Cricket Association (ca) President Ajay Shirke's office made pre~ sentations on Pune to prospective bid- dors. “Wo know that if we missed this boat, it would have been a tragedy of sorts.” The sca is building Pune’s new stadium on their own land, designed by British architect Michael Hopkins, the man behind the new-look Lords and on London Olympic projects. Shirke says Puno’s stadium will be “the Mercedes Benz of all cricket grounds in India” As Pune celebrated, Kochi sur- prised. Yet days before the second 1P. bidding (the first scrapped because the ‘mt. governing council was horrified to see the tender demanding a net worth of $1 billion) Kerala Cricket Association (xcs) officials were being told by their ect brethren, “You're going to get the jackpot.” Now Kochi’s Nehru Stadium has to be slapped into shape, returfed, given a roof to cover spectators’ heads id the xca’s district academy pro- gramme fast-tracked Impressed as everyone isby the 19's business model andiits carpet-bombing of vast tracts of pliant media acreage Samir Kale, marketing director CMGC India and president SportzPR says, “One needs to take care that the 1 doesn't become too powerful and over take the nec.” Already, there is rumour that Sahara may now bail out of its sponsorship of the Indian team, which cost Rs 313.8 crore for four years. ‘oct President Shashank Manohar, also a member of the m. governing council, says Sahara has told him they ‘would continue and that he never reads newspapers anyway. Naturally, he is not worried, “I don’t think of the wt as a danger. People are still interested in nis and Tests.” So Season 4, with its 10 toams, will be held in 54 days, he says. ‘Allowed to play in only a maximum of 14 games, players will be rotated. The old la, believes the experienced lawyer, will hold its own. Still, the ir. has won over hearts, minds and pockets. If Modi and his Teague want to take over cricket as it exists, all they have to do now is take over the calendar. . 6