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  • ‘The ICC will continue to manage its economics on a global basis with India as a key market’ : ICC CEO Haroon Lorgat

    ‘The ICC will continue to manage its economics on a global basis with India as a key market’ : ICC CEO Haroon Lorgat

    Wearing the International Cricket Council (ICC) hat isn‘t an easy job these days. With the Indian Premier League (IPL) becoming the new economic powerhouse, scheduling international cricket can be a tough task.

     

    The challenge of the ICC is to ensure that a balance is maintained between the three formats – Test cricket, one-dayers and T20 – of the game as each has its own attraction and value proposition.

     

    The other task is to take the game to new markets including the US and China. The ICC has set aside $300 million for the development of the game.

     

    With the BCCI (Board of Control for Cricket in India) gaining superpower status in world cricket, the role of the ICC is to manage its economics on a global basis with India as a key market.

     

    In an interview with Indiantelevision.com‘s Ashwin Pinto, ICC CEO Haroon Lorgat talks about cricket continuing to be in a healthy state as it has three viable formats of the game running at the international level.

     

    Excerpts:
     
     
    How would you describe the health and state of cricket at this point of time?

    Cricket is in a very healthy state at present. We are fortunate to have three viable formats of the game at the international level – Tests, ODIs and T20Is. Having these three formats is a huge opportunity that offers our fans, sponsors and broadcasters different options. No other sport can boast three viable formats of the game at international level.
     
     

    What is the ICC‘s strategy going to be to ensure that all formats of the game co-exist?

    Depending on how all of us collectively manage the game, we believe that all three formats can survive because each has its own attraction and value proposition: Test cricket has its endurance, cut and thrust, and its tradition of more than 130 years and, importantly, it is regarded by the players as the ultimate format. It is the benchmark by which they will be measured.

     

    ODIs have a history of their own with nine ICC Cricket World Cups stretching back to 1975. This format offers a chance for sides to recover from difficult situations while still affording a result in a single day.

     

    It boasts the biggest attractions in the World Cup and largest team prize in the game.

     

    Twenty20 is a great new attraction and vehicle to develop the game at domestic level. This short and sharp format draws new interest and allows tournaments to take place over a short period of time.

     

    It is important that the ICC and our members get the balance right, particularly in terms of scheduling.
     
     

    What measures are being taken to protect Test cricket‘s status as the pinnacle of the game?

    There are three important factors – competitive matches, context and the spectator experience. Improvements can be made in all of these areas and we are working with our members to achieve this.

     

    Some current examples of this are the current investigation into developing greater context for Test cricket, the possibility of staging day/night Test cricket in territories that would benefit from that, and more effective and consistent marketing and promotion of Test match cricket.
     
     

    Could we see the day night concept being introduced post 2012 for Test cricket?

    We need to make sure that Test cricket is accessible to the supporters that want to watch it. The indications are that in some markets supporters may be more interested in watching Test cricket, at the venues and on television, if it is played in the evening.

     

    Day/night Test cricket is one of several options under consideration. It is dependent on successfully developing a cricket ball that can be used in night conditions and this would need to be trialled at the domestic level first.
     

     
    While you maintain that the ODI format is fine, the fact is that the Champions Trophy will now be held once in four years and not every two years. The Twenty20 World Cup will take place every two years. Doesn‘t this indicate that to some extent the balance of power in terms of viewership and revenue is shifting from the ODI towards Twenty20?

    Don‘t forget that the ICC cricket World Cup is also held every four years and between this and the Champions Trophy, there will be a 50-over tournament every two years until 2015. In other words, the World Twenty20 will alternate with a 50-over format every year.

     

    Not surprisingly the 50-over format at international level remains very popular with players, spectators, TV viewers and sponsors. The highly successful ICC Champions Trophy event in South Africa demonstrated that yet again as have other recent bilateral series.
     
     

    ‘Our major events are televised into more than 200 countries with hundreds of millions of viewers. Cricket receives the second highest amount of TV viewers of any team sport after soccer‘
     

     
    Are you satisfied at the progress that has been made in terms of the preparations for the 2011 World Cup?

    Yes, we have done extremely well with preparations during the course of this year.

     
     
    How much revenue will the ICC and the boards make from cricket‘s showpiece event?

    In terms of commercial and broadcast interests, the World Cup 2011 is bundled with all the other major ICC events over an eight-year period. The current deal will run from 2007 to 2015 but the details, as you would appreciate, are confidential.

     

    We will, though, be investing $300 million into the development of the game in our associate and affiliate members over the course of this cycle.
     

    Do you see the IPL posing a threat to international cricket? Already last year Sri Lanka withdrew from their tour of England so that their players could take part in the IPL which offers much more money?

    On balance, the IPL has been very positive for the sport overall. It must be remembered that it is a domestic tournament under the auspices of the BCCI and does not take precedence over international cricket. This is something that the IPL itself and the BCCI has made clear to the players and public.
     

     
    Is the ICC examining the possibility of creating a window for the IPL?
    Being a domestic event, there is no consideration for a window at present and there is also no request for one.
     
     

    Australia, New Zealand and South Africa are also planning a league. Would this pose a challenge to the ICC in terms of formulating the FTP post 2012?

    I am not aware of such a league being planned. In any case, it would not impact the FTP post 2012 as this has already been agreed subject to a few provisos.
     

     
    India dominates the game economically in that 80 per cent of the revenue generated comes from here. Does the ICC have a gameplan to reduce this imbalance which cannot be healthy for any sport?

    We are always pleased when our members are able to generate funds and optimise their revenues domestically. On the other hand, we have always been fortunate to attract local and global sponsors that are not purely driven by the Indian market.

     

    However, given the huge market in India, it is not a surprise that this is the revenue generating powerhouse for world cricket. We will, therefore, continue to manage our economics on a global basis with India as a key market.

     

     
    Does more need to be done in terms of how the game is covered on television or are you satisfied?

    I think that the coverage the game receives worldwide is excellent. Our major events are televised into more than 200 countries with hundreds of millions of viewers. Cricket receives the second highest amount of TV viewers of any team sport after soccer.
     

     
    New media is growing through mobile and the Internet. How is the ICC taking advantage of this to spread the reach of the game?

    We have an excellent partnership with Yahoo! in relation to our website and other internet platforms. We also work with our commercial partners to make the most of the mobile platforms.

     
    The BCCI recently formed a consortium to fight piracy. Is this a serious threat from your point of view?

    ICC supported the BCCI in this regard and is also working seriously to handle this issue. We are working with our stakeholders to form a coalition to actively address and counteract online piracy.
     

    Could you shed light on the strategy that the ICC follows when it comes to doing local sponsorships for its events?

    The strategy we adopt depends on the event and the market in which it is taking place.
    In truth, it was not really difficult to get in sponsorships for this year. We managed to secure some excellent local sponsors despite the global recession and we were very pleased with the overall outcome. That is a reflection of the good health of the game and the value we are able to offer our commercial partners.

     

    For instance, we got Standard Bank to sponsor the World Twenty20 cricket championship. Local partners are an important feature of all ICC events because they tend to have a vested interest in the markets in which our events are staged. The ticketing component of the local partner packages offers an excellent platform for targeted sales promotions by sponsors.

     

    Our marketing research suggests that the dollar value of the televised brand exposure that local partners receive far exceeds their level of investment, primarily because our events are uncluttered in terms of the number of branding messages.
     

     
    What are the steps taken by the ICC to avoid ambush marketing?

    We implement sensible and practical measures during our events to ensure that orchestrated ambush marketing does not occur. I don‘t want to go into too much detail. But it is suffice to say that we are vigilant in our efforts to preserve our commercial partners‘ rights and make sure they receive value for their investment. 

     
    Is it easy to spread the reach of cricket to emerging and new markets?

    We invest more in developing the game than any other sport, apart from soccer. The Pepsi ICC Development Programme is spending around $300 million over the next cycle to develop and promote cricket below Full Member level.

    The Development Programme has made huge strides over recent years and we have seen teams like Ireland, Kenya, Scotland and the Netherlands come through that programme and put in competitive performances against the top sides. Ireland made it through to the Super Eight stage of Cricket World Cup 2007 and the World Twenty20 2009 beating a number of Full Members along the way. We recently saw the Netherlands beating England at Lord‘s in the World Twenty20. Participation has doubled over the last five years with the biggest growth areas being junior and female players.

     
     
    Finally, do China and the US play an important role in the ICC‘s growth plan?

    We have identified the US and China as two obvious areas for potential growth and, through our regional structures, we are involved in developing the game there. They are two very distinct and different markets for cricket and so cannot really be compared.

    However, there is no doubt that both offer a wonderful opportunity for cricket to continue to spread the sport and we intend to do just that.
     

  • ‘We have been profitable for the second year in succession’ Manoj Badale – Rajasthan Royals chairman and co-owner

    ‘We have been profitable for the second year in succession’ Manoj Badale – Rajasthan Royals chairman and co-owner

     It has been a mixed bag for the Indian Premier League (IPL) franchise Rajasthan Royals over the last couple of years. Having come out on top in the first year, the franchise failed to reach the semi-finals after the venue for the second edition shifted to South Africa.

     

    However, Rajasthan Royals made a profit for the second year in a row. It also got Shilpa Shetty and UK-based Raj Kundra to take 12 per cent stake in it for $16.8 million (Rs 820 million), valuing the franchise at around $140 million (Rs 6.83 billion), more than double the $67 million that the owners, Emerging Media, paid for it a little over a year ago.

     

    Rajasthan Royals has been aiming to create a differentiated brand with focus on innovation, youth, the team ethos and the ‘win from anywhere’ mantra.

     

    While priority is to play better cricket, the off-field focus is to reach out to its local and international fan base. Building a sustainable merchandising programme is also on the agenda.

     

    In an interview with Indiantelevision.com’s Ashwin Pinto, Rajasthan Royals chairman and co-owner Manoj Badale denies that he has picked up a majority in the franchise and talks about its growth plans.

     

    Excerpts:

    There have been reports that you have picked up a majority stake in Rajasthan Royals. Is this true?

    All these reports are inaccurate. There has been no change in the shareholding structure. We are fortunate to have investors based in the UK, India and Australia. This gives us a global perspective on the decisions we take as a company.

    Do you think the IPL in South Africa helped in exposing the brand globally?

    The move was a great opportunity for us as well as the IPL to expand the global audience and win a lot of new fans outside of India. We learnt a great deal about the international potential of ‘Brand Rajasthan Royals’. We successfully experimented with our merchandise and the ‘Royal Turban’ and the ‘Royal Mooch’ (moustache) became synonymous with Rajasthan Royals and its fans at all the games.

    Was it a logistic nightmare to shift base to a foreign land?

     

    The move to South Africa gave us as well as the organisers only about three weeks to put together everything from scratch. But the vast majority of the work was undertaken by the IPL and IMG teams. Our work for the Rajasthan Royals was far less than theirs, although our initiatives in creating practice matches against the 2008 South African champions added to a busy workload.

    The main challenges related to travel, merchandise and local marketing. We overcame these by working with local partners, and leveraging our sponsors wherever possible.

    Is it true that Rajasthan Royals made a Rs 250 million profit?

     

    We do not like to provide specific comments on our financials. However, we are happy to have been profitable for the second year in succession.

    Rajasthan Royals had earlier stated that its goal was to breakeven in three years. Are you on track to better this?

     

    Yes, we are! But we can’t rest on past performance.
    ‘I am not sure that any country can replicate the IPL. Matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become‘

     

    What activities are you planning to keep the brand alive?

     

    We have already reached out to the UK. We played in front of 22,000 fans at Lord’s against the 2008 English 20:20 champions Middlesex. We are exploring other alliances and strategic partnerships in different geographies across the world.

    In India we do fan ‘meets’ and ‘greets’ as a regular exercise throughout the year. We also sponsor the Jaipur based T20 local league called the Royals Cup. The plan is to scale these into bigger events with more participation from sponsors and fans.

    Do you have any licensing and merchandising plans for this year or are you waiting for next year?

     

    Yes, we have many. We believe that licensing and merchandising is the most unexploited area for the team, and our focus is to continue to explore strong partnerships in this regard. We hope to create a long term and sustainable merchandising programme around the team.

     

    Our licensing and merchandising programme continues to grow and Shilpa’s presence is a huge benefit – with lots of great new ideas.

    What are the key elements one needs to keep in mind when designing this?

     

    It is important to pick a few categories that have potential in a developing market such as India. The temptation is always to do multiple deals. But we need to look for strategic partnerships with products and brands that share our brand values.

     

    It is also important to execute well, once we have identified our focus areas. My hope is that we will see exciting partnerships in the areas of retail, apparel and gaming this year.

    Shilpa Shetty and Raj Kundra have taken a 12 per cent equity stake in Rajasthan Royals. Will this help?

     

    Through this investment, we feel that we got dual benefits at the price of one. Raj contributes business acumen and is a great addition to our board. With Shilpa’s international status and media experience, we are gaining a real advocate for our team and enhancing RR’s global brand.

     

    It clearly expands the off-field options available to us. Overall our strategy will always be to prioritise the cricket. But off the field, we will expand our activities to reach out to our local and international fan base.

    Is it true that deals can’t solely rest on the on-field performance but also on the brand attributes?

     

    We think that our brand values are extremely differentiated. We focus on innovation, youth, the team ethos, and the ‘win from anywhere’ mantra.

     

    This is ‘Brand Rajasthan Royals’. Our sponsors and merchandising partners have a lot to gain with that type of association. The brand needs to be built holistically and not just around on-field; it should also represent what its stands for, off-field.

    How is Rajasthan Royals perceived as a brand?

     

    What people tell me is that we are the IPL’s most loved team. This is due to our brand of cricket, our team ethos, and our emphasis on youth. People like the underdogs, which seems to be a label that we are yet to shake. I think that we are also seen as a very internationally mobile franchise.

    In-stadium hospitality will be an important revenue source going forward. Has Rajasthan Royals firmed up plans in this area?

     

    We are constantly testing, and iterating our plans. There is lots of ‘best practice’ across the world from events across all sports.

     

    However, the right in-stadium experience has to be customised for the IPL, which has its own unique characteristics – the brevity of the match, the relatively short period of time that fans are in-stadia (but not watching the game); and the mix of demographics in different parts of the stadia. As is the case for much of our business, there is no single ‘silver bullet.’
    How successful has the Rajasthan Royals been thus far in exploiting new media?
    It is too early to talk about success, but we are pleased with our innovation and activity levels – the e-commerce platform works well. Our work on Facebook and Twitter has yielded positive results. Our mobile communities are also excellent.
    What are the plans to take the reality show Cricket Star to another level this year?
    We’re talking to Indian and international production houses. Our ambitions with Cricket Star remain big and we are enthusiastically pursuing various broadcasting platforms.
    While the objective of this show is to harness the power of raw talent concerns, have been expressed that budding cricketers will focus more on T20 as it is more lucrative and give short shrift to the other two formats. What is your take on this?
    The objective is simply to unearth new cricketers. The economic reality of focussing on T20 is a choice that individuals need to make. Personally, I think that Test cricket still has a healthy future, if managed properly by the administrators.
    What other entertainment-based sports formats is Emerging Media looking at?
    Currently we are focussing on popular sports like cricket and soccer as we believe the market is still some time away from justifying early stage investment in other sports. We are looking at a soccer-based TV show. We will be able to share more details on this later. However, prospects for golf and tennis are promising.

    The English Cricket board scrapped plans for P20. How difficult will it be for the other countries to do a league that is as financially successful as the IPL?

     

    I am not sure that any country can replicate the IPL – nor do I think they should be trying to. Each country has to look at what is best for its fan base, what parts can be exported to India, and what parts can be borrowed from other tournaments.

     

    Moreover, it is important to have realistic objectives – and matching the IPL is not a realistic one. There are too many things that are unique to India that make the IPL the success that it has become.

    Emerging Media and the other IPL franchisee owners are looking to register their trademark in different countries to protect their IPR. What is your strategy in this regard?

     

    This is part of the framework for our IP protection. If we, as part of the IPL, have global ambitions, then we need to protect our identity, even before we reach out to foreign markets.

     

    All teams and the IPL are globally recognised brands. We are just ensuring that we’re legally protected as well.
  • ‘India is a very important part of our growth strategy’ : Marcus Luer- Total Sports Asia CEO

    ‘India is a very important part of our growth strategy’ : Marcus Luer- Total Sports Asia CEO

    Total Sports Asia (TSA) has big plans in India. Though it has concentrated on soccer, golf and badminton, the specialist in personalised sport and entertainment solutions is now looking at the opportunity of getting involved with the Indian Premier League (IPL). It views the team franchises as a hot property, offering a wide spectrum of revenue streams.

     

    Launched in India five years back, TSA has made progress in different areas like representing World Wrestling Entertainment (WWE) and organising the opening and closing ceremonies of the World Military Games. The plan is to also get involved in the high-profile, high-stakes game of cricket.

     

    In an interview with Indiantelevision.com‘s Ashwin Pinto, Total Sports Asia CEO Marcus Luer discusses about the dynamics of the sports marketing business and the company’s growth plans.

     

    Excerpts:

    How would you describe the progress that Total Sports Asia has made since launching in India five years back?
    TSA has grown from a small team in Mumbai to two fully operating offices in Mumbai and Delhi. We work across all our core business lines in India now – media rights, sponsorship, events and consulting. Over the years we have been involved in a host of different activities from the management of the World Military Games Opening and Closing Ceremonies to licensing deals for WWE. This is partially due to the nature of the Indian sports landscape and our wide range of skill sets. We are continue to explore various niche areas and are comfortable across many different sports.

    What will be your key areas of focus in India?
    India will remain a core market for TSA and we have identified certain sports and entertainment content which will be our focus. Without giving away too much, football, badminton and golf will be an important element for us. We have also identified a variety of local events which we believe have long term potential and we are keen to develop further.

    In terms of revenue and business generated, how important is India vis-a-vis the rest of Asia?
    I see India as a very important part of our growth strategy in the short and long term. The market has tremendous potential and we will continue to grow our presence.

    How does the deal with Nectar Capital benefit Total Sports Asia?
    The simplest way to look at this is that Nectar Capital provides us with additional fire power in terms of funding and financial business acumen. Having a strong PE partner makes us a better company.

    Cricket is the dominant sport in India . How come you have not been more active in this space?
    We have been involved but haven’t been that high profile. There are lots of discussions behind the scene and it is best left at this.
    ‘There are many great value-for-money projects which deliver a strong demographic audience and RoI for the sponsors. Our involvement in the Kerala Boat Race comes to mind. This is one of the biggest tourist festivals in the country and with us getting involved, the event will be elevated to a completely new level‘

    Are you looking at associating with an IPL franchise to help them monetise and plan better?
    Yes, I do believe that IPL franchises have great commercial potential and only very few truly maximise their commercial rights. There has been a lot of noise and too many people claiming that they represent this team or that team. We are quite happy to wait for the dust to settle and then have a smart partnership with the right franchise. The IPL is here for the long-run and so is TSA. The teams will work out pretty soon who is for real and who just talks.

    India will be hosting three big events over the next couple of years – Commonwealth Games, cricket World Cup and hockey World Cup. There is also the possibility of F1 race taking place. What opportunities does TSA see for itself here?
    These events represent great opportunities for us. We are in different discussions on all 3-4 of them. Some opportunities relate directly to our own core services whereas in others we have teamed up with global partners who will bring in the required skill and services. We are also involved in the World Championship of Badminton in Hyderabad this year, another global event in the country.

    India has commonly been called a one-sport country. Will so many big ticket events taking place here change things in any manner?
    Yes! I do believe that India is becoming more open to other sports, especially when there is the local hero factor. Saina Nehwal’s recent success in Badminton and the subsequent coverage in the local media shows that people love to see a winner.This was similar when Sania Mirza appeared a few years ago. With more major international events in the country and also better training facilities in other sports, India has the human capital and potential to excel in many areas.

    You have plans in badminton with the World Championship this August in Hyderabad. Do you feel that this could be the catalyst for viewership of this sport to grow?
    Yes! As I mentioned, badminton is a core sport for us and we are excited over the prospects of this event in India. With Saina Nehwal stepping out of the shadow of the Chinese players, the timing could not have been any better. If she continues this way, we could see an Indian World Champion being crowned on home turf. I think this would put the sport on a fast track to truly make an impact. Badminton has a strong grassroots following but that has not translated into commercial success yet.

    How did the deal with Nirmal Lifestyle come about for the US Open?
    It was a collaboration between us and the client. We were given a brief and a vision of what Nirmal was looking for and then went out to find the right partners and build a concept around it. It is truly a unique deal for all parties involved and we are confident to add more deals in this space.

    What are the other kinds of innovative tie ups that Total Sports Asia is looking at?
    There are a host of other unique licensing deals being discussed with global recognised sports brands but it is too early to reveal.

    Is there more of an understanding among clients in India about how sports can be used for brand building beyond just cricket?
    Yes! I do believe Indian brands appreciate that we don’t just talk about cricket when we sit in front of them but truly show them the opportunities with other sports or entertainment concepts. There are so many other great value-for-money projects which deliver a strong demographic audience and RoI for the sponsors. Our involvement in the Kerala Boat Race comes to mind. This is one of the biggest tourist festivals in the country and with us getting involved, the event will be elevated to a completely new level.
    You did a deal with Real Madrid for mobile content in Japan. Will this kind of a service come to India shortly with soccer growing in popularity?
    We represent the Real Madrid mobile rights and many other top sporting mobile rights for India as well. Mobile content growth is directly related to the local network capabilities. Having a large customer base in India is a great starting point but the lower spectrum of bandwidth still stops ‘rich’ content from truly being consumed in India. This is just a matter of time when new technologies will make this experience available in the market.
    You also recently did a deal with mlogic. Is leveraging the new media space becoming more of a focus area for TSA?
    We are in the process of launching our own online channel (www.totalsports.tv). This will stream live action from various events including the World Championship of Badminton in India and the US Open tennis over the internet. The service is in partnership with Octopus Media in the UK.
    Are you planning to work with sports bodies in India to grow sport at the grassroots level?
    In general we have a more top down approach. We start with media rights, build an awareness and presence for the sport on TV, and then develop a great ‘live’ experience for the fans. We let the fans touch and feel the sport and the stars and then give the fans what they want in terms of other interaction and experiences to allow them to truly immerse themselves with their favourite sport, team or athlete. This is currently the smarter route to develop the right level of awareness and commercial interest in a sport. That does not mean grassroots is not important and needs to be nourished. I truly believe that’s where the government needs to step up and provide the necessary infrastructure and financial support. Agencies will then be able to support that effort.
    Does TSA have plans in the player representation area in India and Asia?
    I’m sure this will be a natural process coming out of our involvement with certain sports and sectors.
    Apart from India, China is another key market for you. How did the Olympics impact the dynamics of the sports marketing business in that country?
    There are clear signs that the event has changed the perception of sport in China forever. The local athletes have become the true heroes of the games and many more stars will come out of the young generation who watched the Games from the sideline. At the same time, the typical Olympic hang over in the commercial sector was also felt, coupled with the global recession. So several new initiatives were shelved or put on hold. Overall, sports in China will continue to grow in double digit figures and the country will continue to produce world class athletes in many disciplines. The investment in the Games will pay off over the next 10-20 years and will make China a huge force in sports globally.
    How do you see the current economic downturn impacting the sports marketing business in India and Asia?
    The first five months of the year were difficult with a lot of negotiations slowing down or being put on hold. In the last two months we see a lot of renewed interest and discussions being revived. I believe that the corporate sector has managed to see the light at the end of the tunnel and worked out how they need to deal with the climate. Lots of projects for the later part of the year and next year are in full swing.
  • ‘All IPL teams should be able to break even by 2011’ : Hiren Pandit – GroupM ESP managing partner

    ‘All IPL teams should be able to break even by 2011’ : Hiren Pandit – GroupM ESP managing partner

    The Indian Premier League (IPL) promises huge space for revenue growth. The team franchises will have to focus on building the brand consistently, project a healthy personality and take the sponsorship value to a different level.

     

    It is not wise to draw sponsors just on the back of winning and losing. Performance is a factor, but it is not the only thing.

     

    In an interview with Indiantelevision.com’s Ashwin Pinto, GroupM ESP managing partner Hiren Pandit says there is value in T20, but warns that it should not be at the cost of the other formats.

     

    Excerpts:

    How have the franchises fared financially in the second edition of the IPL?
    Our assumption is that there are two who have not made a profit – Deccan Chargers (Hyderabad) and Royal Challengers (Bangalore). They had their own brands on their T-shirts, which could be looked at as an investment rather than a loss. The others have broken even at the operational level. This was due to the rise in television rights fees. The question is whether they have wiped out the losses of last year. I expect everybody to break even by 2011.

     

    In terms of sponsorship revenues between the team and central revenues, the IPL got Rs 3 billion. Last year it would not have been more than Rs 2.5 billion. Kolkata Knight Riders (KKR), Chennai Super Kings (CSK) and Delhi Daredevils have got the most in terms of local sponsorships, followed by Mumbai Indians, Kings XI Punjab Rajasthan Royals (RR).

    And what about sponsorships?
    CSK and KKR did a particularly good job. But you would have a team like Royal Challengers (RC) which is not interested in outside sponsorships. That franchisee put its own brands on display.

    How about defending champions Rajasthan Royals?

    RR has broken even because their payout to the BCCI is much less as compared to the others. They only shell out $6.5 million each year. Having said that, I am not so sure that finishing number one necessarily translates into higher sponsorship revenue.

    Then what matters?
    You need to look at what a team stands for. Is its branding consistent? Does it show on the ground? Does the team overall project a strong and a healthy personality? Are there characteristics in the team that can take sponsorship value to a different level?

     

    If an IPL team draws sponsors on the back of winning and losing, then you have a problem. Performance is a factor, but it can’t be the only thing.

     

    While KKR did well in terms of getting in sponsors, somewhere down the line they or the brands associated with it made the mistake of going down the performance route. That is a dangerous platform to walk on. The amount of bad press it got did not help the franchisee nor the brands that were associated with it.

     

    On the other side, Idea did an outstanding job with the Mumbai Indians. Their activation platform was brilliant and had nothing to do with winning or losing. It gave fans the opportunity to aspire to talk with their favourite players. Even though Mumbai Indians lost on the field, the aspirational value is still there.

    What was Group M’s role in this IPL?
    We did a few deals with some clients for having their logos appear on T-shirts. We lost out big time, though, as the IPL moved out of India. We had a smaller role to play compared with last year. We are now not involved with the Deccan Chargers.
    ‘Revenue growth will come from local sponsorships. If you are heavily relying on the central pool, then the franchise has not built itself properly. Building up local sponsorships and fan base will be key‘

    Do you see yourself playing a bigger role going forward?
    Yes! We have knowledge on brand activation around the IPL. We have got a good understanding of this space and the valuation process. We can give clients a fair idea of what they should pay for a logo, depending on the position they take. We are also open to associating with teams.

    The IPL is looking at doing another event each year abroad, possibly a smaller one. Is this the best way forward?
    The aim appears to be to develop cricket in smaller, non cricket markets. Is there a window available? Are players available? These issues have to be addressed.

    Where does KKR go from here?
    They have to relook at what they have got. They are not a bad team per se. They have a high profile owner and they need to look at the relationship between owner and team.

     

    Secondly, they had too many people like Buchanan and Ganguly trying to become high profile. The bigger you are, the harder you fall and that is what has happened.

     

    Kolkata’s sponsorship is on the back of Shah Rukh Khan and not because of the team. They could rejig what their brand stands for – and then sponsors will come in for the team’s values. That is a call that they will have to take. What you will find is that franchisees will move away from performance as a platform for brand activation.

     

    Going forward, the growth of revenues will come from local sponsorships – and not so much from the central pool. If you are heavily relying on the central pool, then the franchise has not built itself properly. Building up local sponsorships and fan base will be key.

    How would this happen?
    The IPL will move away from being just a 45-day event. Franchisees will do activities over a longer period of time to build a fan base. They would do things like promotions, interactions and meets.

    There is talk that with the IPL the focus is shifting away from individual player sponsors and more towards team sponsorship. Are players like Dhoni going to lose out on lucrative deals going forward?
    When a team association is done, three to four players are used. Even if you are associated with CSK, you can only use Dhoni as far as IPL is concerned. This makes sense when the IPL is on or just about to start. But in December if the team endorses a brand, what will a viewer take out of it? The viewers are not stupid. If people believe that they are getting a Dhoni for free by associating with his IPL franchise, then they have a short term approach to the business.

     

    You could associate with a team to get national reach. If you associate with a player, it would be due to his characteristics. It is not necessary that the characteristics of the franchisees will be the same.

    When the IPL adds more teams in 2011, what would be the likely cities?
    Gujarat and UP have opportunities. You could see another team from Maharasthra – perhaps Pune or Nagpur. Kerala also has a chance if some NRI is interested. The payout could cross $200 million. But the interested party will have to work his maths out properly. Otherwise, it will be difficult to recoup your investments. The parties that shelled out the most for a franchisee the last time around are just about making it. The lower end of the payout table are more comfortable.

     

    Also keep in mind the fact that after 2010 all player contracts are up for grabs. The whole scenario will be reworked and changed. There should again be a cap on money that can be spent or there will be teams that will be far stronger than the rest. The IPL could then turn into a two or a three horse race which will take away from its appeal. Some deals, though, might be done outside the bidding. We will see more performance-related deals. Player loyalties and disloyalties will also come into the equation.

    Next year England starts P20. In 2011 South Africa, Australia and New Zealand start a joint league along the lines of the IPL. How do you see this affecting international cricket?
    The question is with so many leagues happening, what happens to Tests and one-dayers. Is there enough of a window for this to happen? There was a league that started in the West Indies, which subsequently got killed.

     

    Can the other leagues generate the kind of money that the IPL gets? I don’t know if Kevin Pietersen will get $1.5 million a year in those leagues.

     

    Then you must look at it from a player’s perspective. He plays around 35 ODIs, 15 Tests, 20 T20 games a year. Does he have time to play anything else? Remember also that T20 is successful in India as it is a country sport first. Then it is a club sport.

    Could we see players bypassing the international grind and just focusing on league cricket which is lucrative?
    The question is whether a player wants to play cricket for a living or does he want to represent his country and make money. You cannot have somebody only focus on the T20 format. This is something that this edition of the IPL brilliantly showed.

     

    The players who did well like Kumble, Gilchrist and Hayden are seasoned campaigners who have excelled in the other formats as well. T20 is not a wham bam affair. It is about playing proper cricket. If a cricketer chooses league cricket over his country, then he might be asking for trouble. Most of the IPL players got there as they made a statement by playing for their country. Then there are youngsters who did well in the IPL and are now playing for their country. I do not think that it is a choice of one versus the other.
    What impact will India’s exit in the T20 World Cup have on ESPN Star Sports?
    Ratings will take a hit. Already we are seeing that clients are not getting enough of a return when India does not play.
    How do you see the Champions T20 League faring?
    You need to let it happen once. Some players play for two teams and so will have to decide where their loyalties lie when this event starts.
    Would playing at night help Test cricket?
    This is not a bad idea. What has happened is that T20 has had a positive impact on the other formats. The run scoring in Test matches is quicker which is forcing results. This is desirable. Each format lives off the other in some form or the other.
    There will be lots of T20 cricket happening. Are you concerned that the overdose might kill the format?
    It could lose its flavour. You cannot have too much of one format. There is value in T20, but it should not be at the cost of the other formats.
    What challenges does the economic downturn pose for Group M ESP?
    We need to work harder. We need to give more value to clients. It is a partnership in good times and bad. We need to find better opportunities for clients but it is not as though we need to think differently.
    What progress has Group M ESP made in the celebrity endorsement and management space?
    We have moved away from this. Keeping in mind the Indian mindset towards celebrities, we did not believe that it was a scalable model. We focus, among other areas, on branded content in film and television. The strike affected us but hopefully the films have only been shifted and not cancelled. We have done regional tie ups with brands.
  • ‘We are seeing the beginnings of a global iconic brand in the IPL’ : Unni Krishnan – Brand Finance India Managing Director

    ‘We are seeing the beginnings of a global iconic brand in the IPL’ : Unni Krishnan – Brand Finance India Managing Director

    The Indian Premier League (IPL) is set to revolutionise the cricketing economy, draw in a new bunch of younger audiences with the T20 format, reinforce India’s superpower status, create club cultures, and build market values that are in line with the English Premier League (EPL).

     

    Just two years into birth, the IPL is enjoying a brand value of $311.44 million (IPL brand value of $240.72 million and IPL brand value to BCCI of $71.22 million) and an eye-popping enterprise value of $2.01 billion, according to UK-based brand valuation consultancy Brand Finance.

     

    There is no stopping Shah Rukh Khan. Not even a dismal performance at the IPL. Kolkata Knight Riders, the team that the Bollywood star owns, leads the pack of eight with a valuation of $42.1 million. Mukesh Ambani’s Mumbai Indians walks into the crease at the second spot with a brand valuation of $41.6 million, followed by Rajasthan Royals with $39.5 million. The others in the pecking order are Chennai Super Kings ($39.4 million), Delhi Daredevils ($39.2 million), Bangalore Royal Challengers ($37.4 million), Kings XI Punjab ($36.3 million) and Deccan Chargers ($34.8 million).

     

    The IPL and the team franchises will have to prepare for a long slog if they are to reach anywhere near the value of the EPL and its member clubs. They will have to induct professional management teams, introduce rigorous corporate structures, and chalk out strong commercial streams including merchandising and licensing.

    In an interview with Indiantelevision.com’s Sibabrata Das, Brand Finance India managing director Unni Krishnan talks about the wonderful start the IPL has made, the potential it has in creating a global fan base and the things that need to be done to stretch the value of the brand and its market capitalisation.

     

    Excerpts:

    Sceptics have questioned the rationale for valuing Kolkata Knight Riders at $42.1 million. Does the performance of the team get a low weightage in comparison to the high-profile value of Shah Rukh Khan as the team owner?
    The valuation process was on 2-3 months before the second edition of the IPL and, in many ways, you can’t predict the future. Having said that, enough data is available to prove that KKR has customer loyalty, a high degree of fan following, and amount of viewing for the matches that they play. Shah Rukh is able to generate an identity for the team. KKR is also able to tie in high-profile sponsors and sources of licensing and merchandising (L&M). Brand value is nothing but an ability to create fan base and convert that into cash.

    Even in the inaugural edition of the IPL, KKR didn’t fare too well. And in the second season, its performance has actually skid. So is there scope for a re-rating of the team franchise’s brand value?
    Unlike the EPL clubs which have created a track record, the IPL is new. When we went into the exercise, the performances were just a year old. Which is why we can’t yet form a strong view of a clear winner. The valuation of the eight team franchises falls within a tight range of $42.1 million and $34.8 million.

    KKR is one of the clubs which has made money from the first year itself. But valuations are not chipped in stone. When we carry out our second exercise after a few months, we will weigh in certain factors like KKR’s performance, captaincy and blogger issues that could have had an impact on the commercial revenue streams and the value of the brand.
    Brand Finance has valued the IPL brand at $311.44 million while fixing the enterprise value at $2.01 billion. Is there a ratio between the value of the brand and its market capitalisation?
    Since the IPL is at its infant stage, the ratio between the brand and the market value is low and not clear yet. We can arrive at a benchmark after 3-4 years as the value of the brand grows. In a typical matured stage, the range varies between the 40-50 per cent ratio. The brand-to-the market value ratio in case of the EPL, for instance, should fall within this region. The brand contributes to the market value in a significant way.

    How come a recent study by UK-based Intangible Business and MTI Consulting has almost halved the team valuations that you have arrived at?
    Valuations are based on opinions and the quality and strength of assumptions. We have conducted a rigorous exercise.

    Has IPL’s shift in home to South Africa for the second season created a disruption in the fan build-up process and hence a dip in valuation?
    The IPL property is not under-rated because it has gone to South Africa. We are, in fact, seeing the beginnings of a global iconic brand. In the cricket-following countries like England, South Africa and Australia, it is creating a new interest among the youth, who had moved away to other sports. A whole new set of fans and audiences are being created,breaching ethnicity and race. Led by a blend of Indian and foreign players, it will take the next 4-5 years to build a global fan base for the teams, cutting across the identification of countries. We are going to see a global brand coming out of India much like the Tatas. That is the potential of the property that IPL is.

     

    But the IPL will not have a clear run in this T20 form of cricket. There are other countries like South Africa and England who are going to have their own form of IPL. Serious competition is going to come. But having said that, the foundations and start of the IPL have been a huge success. The value is just not in marketing but also with a lot of economic substance embedded into it.
    ‘EPL clubs have a heritage of 100 years and have moved towards corporatisation. Some of the values of these clubs are in the wide range of $100-600 million. The IPL does not have that kind of legacy or magnitude. But it has a lot of headspace for value creation‘

    Do the IPL teams have the potential of becoming as big as the EPL clubs?
    The EPL clubs have a heritage of 100 years and have moved towards corporatisation and rigorous structures. Some of the values of these clubs are in the wide range of $100-600 million. The IPL does not have that kind of legacy or magnitude built into it yet. But it has a lot of headspace for value creation, though much depends on how an organised management process and system is being set up. We may have the teams being listed and huge value being created going forward.

    When do you see listing of these teams happening?
    There is a lot of money and Bollywood thrown into the system called IPL. Listings can happen in the next 3-5 years after revenue streams, cost drivers and the need for professional management teams are clearly understood. Sustainable value needs to be built. Some teams may even opt for private equity.

    How IPL is going to impact the business of sports marketing in India?
    It will be a game changing moment for sports marketing and merchandising in India. The global L&M market is $108 billion and is a significant industry on its own. Manchester United and Real Madrid have a vey strong licensing and merchandising model. India is taking its first baby steps. IPL is the medium under which these processes will come into the country. Bangalore Royal Challengers has already started focusing on sports marketing. L&M has a strong commercial role that needs to be developed, going forward. The IPL teams have appointed top legal firms to protect their IPRs. The leakages inside the system have to be plugged or you will have a case of lost opportunities.

    What are the steps IPL needs to take to scale up?
    More teams and seasons need to be introduced. But IPL can’t consider the T20 format as its personal fiefdom because competition is already starting. We are yet to see the teams take to the professional management skills that the EPL clubs have imbibed. But the teams are on the right track.

    Will Test cricket be severely impacted because of the T20 format?
    The Test format will be in crisis unless there is a reinvention in its game architecture. It is especially dying out among the youth in the developed countries. The T20 game has given a new lease of life to cricket. Whichever format is innovative will succeed. But T20 certainly has an edge.
  • ‘We will get an opportunity to build our brand in the international arena of cricket’ : Amrit Mathur – GMR Sports CEO

    ‘We will get an opportunity to build our brand in the international arena of cricket’ : Amrit Mathur – GMR Sports CEO

    The drama over, it is back to business. As the Indian Premier League (IPL) takes refuge in South Africa to play out its second edition, the team owners are readying their new plans to size up their revenues.

     

    GMR Sports, the owner of Delhi Daredevils, is trying to figure out how to make up for the revenue loss from ticketing sales. The spotlight is on sponsorship revenues.

     

    In an interview with Indiantelevision.com’s Anushree Bhattacharyya, GMR Sports CEO Amrit Mathur talks about the opportunity that South Africa throws up in establishing the Delhi team franchise as a brand in the international arena of cricket.

     

    Excerpts:

    GMR Sports was aiming at a 20 per cent revenue growth from sponsorship and ticketing. Now with IPL being shifted to South Africa, will that be achievable?
    No, very unlikely. With ticketing revenues under pressure, it will be difficult to reach the target. Sponsorship will be the only avenue open for us to actually earn. Also, with the tournament moving out of the country, the business model in terms of cost and revenue sharing changes.

    How does the revenue pattern shift dramatically?
    Till last year, IPL was a tournament organised by the eight franchises. Out of the total 59 matches, 56 matches were run by the franchises while IPL organised the two semi-finals and the final. But for this year, all the matches will be organised by IPL and the BCCI. So unlike last year where each franchise was clear about the cost model, (for example, the franchise knew it was to organise seven matches and could size up the costs of organising them), it is all uncertain now of how much we as franchises have to bear.

     

    We also don’t know how the revenue will be shared this time. Till last year, we knew that the central pool contributes revenues of about Rs 320 million. Now it is possible that the IPL may add the ticket revenue to the central pool to share it with the franchises. So the revenue from central pool might increase this time. It will, thus, depend on the revenue share model the IPL finally decides upon.

    Which are the areas where you feel the costs will increase for the franchises?
    Since the franchises have been told that it would be a centrally managed tournament, the IPL is expected to bear all the costs. But the main cost will depend on the financial structure of the facilities being made available – including the ground, the infrastructure, availability of ground for practice, etc. Now IPL will have to discuss these arrangements with the South Africa cricket board and figure out the expenses. As owners of teams, we have an idea of what the games would have cost in India. But we have no idea of what it would be like outside. The cost of travel and the hotels will be relatively minor.

    What if the IPL asks the franchises to bear a certain portion of the costs?
    We will go by the consensus approach. We understand that it’s an extraordinary situation. So if there is a cost attached to the tournament, I am sure everybody will sit together and find out a way.

    On the sponsorship front, GMR Sports has roped in Coca-Cola, UB, Hero Honda, Religare, adidas and Kingfisher. What has been the progress on the two slots that are still lying vacant?
    We are trying to close the last two sponsorship deals as soon as possible. However, the last couple of weeks had been uncertain and there were doubts about the tournament being played. Due to this, we had put on hold our talks with the sponsors. Now that the dates and venue have been announced, we are hoping that the interest for the property will revive.
    ‘We are unlikely to reach our target of 20 per cent revenue growth this year. Ticketing revenues will be under pressure‘

    With the game shifting outside India, are sponsors looking at renegotiating their old deals?
    No, not so far. We had signed sponsors for three years and there is further scope for extension. But at the same time, we are supposed to give them certain benefits. We are in constant negotiations with our sponsors and are open for any sort of dialogue.

    With the broadcast partner yet to be finalised, how much of damage will that do to the business?
    The audience is not really bothered about who the broadcast partner is. The main concern is whether the tournament is on or out. Now that we all know that it is in, things would start moving again.

    Now that the IPL will be played in foreign land, does your marketing strategy go through a complete overhaul?
    Well, it will change to a large extent. What we could do in terms of promoting our team in Delhi, we can definitely not carry out those activities outside India. So our marketing plans will change. We will now try to build our fan base even stronger with ticketing being handled by IPL. Moreover, we will promote our team through our media partners which include BigAdda.com, SMS GupShup, Hindustan Times, Times of India and CNN-IBN.

    Do you think the IPL will manage to gather enough loyalty in South Africa?
    This year it is true that the character of the tournament has changed because it’s no more a domestic league. The nature of loyalty will change. For example, Delhi Daredevils will miss its loyal Delhi fans. The team will play in venues like Durham or Johannesburg which might see an inflow of neutral crowd only interested in cricket as a sport. But then this is only for this year, as the schedule clashed with the Lok Sabha polls.

    What would have been a better decision – no IPL or IPL in South Africa?
    The most important thing is to have the IPL running. About hosting it in South Africa, the benefit is that the tournament and teams will get an international exposure. As team owners, we would get an opportunity to build our brand in the international arena of cricket.
  • ‘Sponsorship rates have reduced by 20 per cent’ : Mohit Burman – Kings XI Punjab co-owner

    ‘Sponsorship rates have reduced by 20 per cent’ : Mohit Burman – Kings XI Punjab co-owner

    Kings XI Punjab, the Mohali team for Indian Premier League (IPL), was bought for $76 million by Bombay Dyeing deputy MD Ness Wadia, actress Preity Zinta, Dabur India director Mohit Burman and Apeejay Surrendra Group chairman Karan Paul.

     

    The four shareholders together formed KPH Dream Cricket Private Limited, the holding company of Kings XI Punjab.

     

    Kings XI Punjab is eyeing sponsorship revenues while cutting down on marketing expenses.

     

    In an interview with Anushree Bhattacharyya, Burman talks about how the economic downturn is going to upset the revenue targets of the team franchisees.

     

    Excerpts:

    Since Kings XI Punjab did not go for three-year sponsorship deals, how difficult has it been to retain them for the second IPL edition?
    Spice Telecom is very much on board as our title sponsor. We are in the final stage of negotiations with Coca-Cola as our pouring partner. Kotak, Provogue and 9X, however, are not there this time.

     

    As for new deals this year, we have signed up with United Spirits while Reebok is our apparel sponsor. We will be closing two more deals in the next four to five days. Overall, we are looking at signing eight to nine sponsors this year.

    Has the downturn in the economy forced sponsorship rates to fall?
    The whole world has changed and overall sponsorship rates have reduced by 20 per cent. We thought we were better off than those team franchisees who had gone in for three-year sponsorship deals. We felt we would be able to command higher sponsorship rates after the build-up from the first IPL tournament. But amid the economic downturn, the teams who signed three-year deals seem to be the smarter ones.

    Does this mean that the revenue targets have gone awry?
    Since the tournament went off on a high note last year, we were under the impression that we would break even this year. However, looking at the present situation, I don’t think that franchisees will be able to break even before 2012. Most franchisees will not be able to make a profit this year, although the tournament will continue to be a success.

     

    The fact that the IPL is held after a long gap doesn’t help matters. Globally, leagues are played for eight to nine months with a short break, providing sponsors a continuous flow of events.

    Where do you see most of your revenues coming from?
    We hope to make more from our sponsorships, ticket sales and merchandising. This should account for over 60 per cent of our total revenues this year, unlike in the inaugural edition where the maximum came from the central pool. We also hope to get our act right on the ticketing sales front this year.

    Do you plan to decrease the ticket prices to pack more audiences into the stadium?
    We already have a pricing strategy. The ticket prices range between Rs 150 to Rs 6000, addressing different segments of audiences. But this year we are going to be very strict in terms of ensuring that people who wish to watch the matches do pay for the tickets.

    Have you lined up your licensing and merchandising strategies?
    For apparel licensing, we have already tied up with Reebok. We will be soon announcing our partner for making accessories like key chain, mugs, etc.

    Have you trimmed your marketing expense this year?
    We are bringing down our marketing cost to Rs 35 million, from Rs 50 million last year. The initial costs in building up a brand are obviously higher. For example, we made a video with Daler Mehndi last year – and that obviously increased our marketing budget. We don’t see such a requirement for making another video this year.
    ‘Since the tournament went off on a high note last year, we were under the impression that we would break even this year. However, looking at the present situation, I don’t think that franchisees will be able to break even before 2012‘

    What role will Preity Zinta play to promote the franchisee this year?
    We have already started our marketing initiatives through the King XI Punjab Cup. We had also sponsored the Manali winter festival in Punjab. This year we will be concentrating more on ground level activities in our catchment areas.

     

    Preity Zinta is one of the owners and she is welcome to play whatever role she desires. She has already contributed a lot last year and as the tournament gets closer, I am sure she will help us in our marketing activities.

    What was the idea behind organising the Kings XI Punjab Cup?
    The idea is to reach out to the people of our catchment areas which include Himachal Pradesh, Punjab, Jammu and Kashmir, etc. At the same time, we want to promote the game of cricket at the grass root level. Since we have a coach and some of the best players from the world, we want to nurture young talent.

    A few franchises have partnered with TV channels in search of cheer leaders. What are your plans?
    We have got plans, but at this moment we are really concentrating on ground activities. Our idea is that instead of doing national hoity-toity shows on TV, we should concentrate on building the brand in our own locality. We believe that if we really want to make our franchise work, then we need to get closer to our fans and get them more involved with the team.

    Are you looking at beginning a cricket academy as Ness Wadia said that the franchisee job is to acquire and groom new players?
    We are setting up an academy and for that we have already got an academy coach. We should be able to roll out the academy a few weeks before the tournament.

    Will Brett Lee’s injury affect your team’s performance?
    I believe Lee will be fit to play for the tournament. We have, however, crafted a team keeping in mind the fact that Lee may not be able to play. Which is why we added West Indian pacer Jerome Taylor and Ravi Bopara.
    You got England’s Ravi Bopara for $450,000, three times his starting price of $150,000. Would you call this an intelligent investment, looking at the present market scenario?
    Kolkata Knight Riders bought Mortaza at a very high rate. So was that an intelligent investment? Every team has to decide on their player investments, keeping many things in mind. While it is true that Bopara was expensive, it is a fact that we needed an all-rounder. And there were two other franchisees who were bidding for him. I believe Bopara would have gone for higher if other franchisees had not run out of money.
    With the dates of the Lok Sabha polls coinciding with some of the IPL matches, how would franchisees be impacted if venues were changed?
    The IPL committee had asked the franchisees to create a back-up plan. Franchisees have an option to play in one or two grounds in the nearby areas. Rescheduling, thus, will not affect the plans of the franchisees.
  • ‘With the launch of the kids channel, we are ready to scale up the verticals’ : Rajiv Sangari- Spacetoon India MD & CEO

    ‘With the launch of the kids channel, we are ready to scale up the verticals’ : Rajiv Sangari- Spacetoon India MD & CEO

    It has been a long wait outside the ring. After building up verticals in the licensing, publishing and merchandising space, Spacetoon has launched its kids channel to combat against multinationals like Turner, Walt Disney and Viacom in the tough Indian market.

     

    A licensing and merchandising deal with Emerging Media, owner of the IPL winning team Rajasthan Royals, has put the company on a totally different pedestal. Talks are also on with a few other sporting goliaths to expand the L&M portfolio.

     

    Spacetoon Kids TV, however, will evolve as the prime property and will guzzle over 50 per cent of the company’s Rs 1 billion investment plan.

     

    In India, the group has floated Kids Media India (KMI), a company that will take care of the TV and licensing business. Kids Animation India is the other arm that will look after the publishing activities.

     

    The shareholding has also been restructured with Japanese firm Animation International holding 51 per cent stake in KMI. Dubai-based Spacetoon Media Group holds the remaining with a small stake as sweat equity resting with Spacetoon India managing director and CEO Rajiv Sangari.

     

    In an interview with Indiantelevision.com’s Anindita Sarkar, Sangari talks about the company’s growth plans across the verticals.

     

    Excerpts:

    What took you so long to launch in India?
    Since the germination of the idea way back in 2004-end, we have spent a long time testing the market. As the Indian economy and the TV industry went on a zoom and prices skyrocketed, we had to rethink our strategies as we were going to occupy a niche space. With distribution, marketing and all kinds of operational spends going beserk as Hindi general entertainment channels got launched, it would have made no business sense to launch a kids channel. Frankly, it would have been a business hara-kiri. Now the prices have corrected and things are much more in control. Despite an overall bleak scenario and a tough advertising market, launching at this moment definitely makes more business sense.

    The shareholding for the Indian venture has changed with Japanese firm Animation International (AI) holding 51% stake in Kids Media India. Was the delay partly caused by this?
    Both Spacetoon and AI have relations since the last 25 years and they have been partnering and co-operating with each other on many businesses together. Hence, changing of the hands in shareholding doesn’t have much to do with any kind of interest level subsiding or increasing. It is a strategic move by both partners of re-strategising and restructuring their operations amongst themselves. Most of the East and South East Asian operations, for example, will be monitored by AI, while most of the Western Asian, European and Eastern European operations will come directly under Spacetoon. I would term this as strategic restructuring.

    Spacetoon was in talks with investors to raise money. Is that plan still on?
    Spacetoon was in talks with a few players and we had already determined 3-4 of them at various stages of our discussions. But most of them wanted to basically take advantage of the position of our fund raising, rather than sharing our passion. Either they wanted majority stake or at some point they wanted us to exit. This did not go with our strategy for India.

     

    Though we realise that for taking our verticals to the next level we require some support, we are equipped as of now to handle it on our own. But if we get an extra push in terms of a partner who can value our strength, experience and hard work which has gone behind making the company and the brand what it is today, we will definitely look at the possibility. India’s economy and retail can only grow and we have 360 million kids. We require a partner who thinks and aligns with us for long term.

    Did you first focus on developing the licensing, publishing and merchandising platform before stepping into the kids broadcasting space?
    That is the business model Spacetoon has followed in other markets. We are doing the same thing here. For over a period of 3 years now, other than TV launch, we have successfully launched our licensing, publishing and merchandising divisions and are very soon launching our own IP programmes.

     

    We are glad that we did not divest then. We have done the tough job of laying out a platform for licensing and merchandising. After the launch of the kids channel, the time has come for us to scale up the verticals.
    How much is Spacetoon investing in India?
    We plan to invest Rs 1 billion over three years. Out of this, about 50 per cent upwards will be consumed by the TV operations.

    Why did KMI decide to launch a kids channel when the genre has actually shrunk a bit last year and the revenue size at Rs 150 crore is still too small to take in so many players?
    We need to realise that kids business is not driven completely by TV broadcasting. Unlike general entertainment channels, ad revenue is important but not the only source of income in the kids genre. It’s always the ancillary units like merchandising, publishing, etc. which will help it take to the next level. And TV business is a long term game.
    ‘Kids business is not driven completely by TV broadcasting. Ad revenue is important but not the only source of income in the kids genre. It’s always the ancillary units like merchandising and publishing which will help it take to the next level‘

    Earlier, Spacetoon Kids TV was looking at investing Rs 250 million for carriage in delivery platforms such as cable TV networks and DTH. However, that number has been scaled down. Why?
    Haven’t others too? It’s simple, the market today doesn’t allow us or anyone to do so. I hear from some sources that most of the top to small TV channels have slashed down their distribution disbursements. And, especially in kids genre, you just can’t support such a large distribution budget.

    The channel is still not well distributed. How are you planning to tackle this and by when do we see it more visible?
    Our focus is not only to tap the Tam cities but also other markets. As of today, our estimates are that we have penetrated over 10 million homes and we expect to do over 15 million by the middle of this year. By year-end, we should be touching 25 million homes. And, don’t forget, it’s only four weeks since we launched. We realise it will take minumum 3-4 months before we start getting visible across all markets.

    What are the distribution deals you with stitched with the MSOs and the DTH operators?
    We are in talks with the direct-to-home operators. As far as cable goes, we are available in some Hathway Cable & Datacom networks. We have also signed up other cable operators, particularly for their digital viewers. Distribution is a gradual build-up.

    Spacetoon Kids TV will have to jostle with seven existing channels to tap into 360 million kids in India. How do you find space in this tough market?
    Each one of us has a different style, programming methodologies, and formats. Our channel will be focusing a lot on moral and social values, packaged with lots of entertainment content.

    What is the different positioning you are taking?
    Spacetoon will divide the day into 10 planets. Unlike running half-hour episodes back to back, we will be giving the kids a mix of several things. There will be fillers which are moral based, messages, ads, packaging, promos, etc. This will ensure a different look during the whole day.

    Do we also get to see localised content as part of the programming mix?
    We definitely are looking towards creating localised programming very soon. This will be mostly live action-based programming. There are discussions going on with various producers to this effect.

    What are your other marketing plans and spends for the channel?
    We will be creating a touch base by tapping thousands of schools in India. We realise that if we have to tap the minds of the kids, there is no better place than their learning ground – school. We are creating a very good value-based school-contact programme, a key area where most of our energy is going to be focused in the first year.

     

    We will also be having events from April onwards in high public areas like malls.

    What is the revenue Spacetoon is projecting and how does it break up in terms of the channel and other verticals?
    I would not want to put across numbers now. Nobody can predict the forthcoming financials in today’s market. But our major revenue driver will be merchandising, which is in full throttle. Following that are our publishing and licensing activities. As for TV revenue, we are expecting it to start from the later part of the year. It will take us some time to penetrate the market and grab space in the minds of the kids.

    What are your expansion plans in terms of licensing and merchandising?
    We have tapped over 69 licensees in the last 14 months. These are translating into products that will get into the market during the course of this year. We already represent some top companies in the world for licensing and there are few more coming our way in the next few months to make our portfolio more robust and meaningful.

     

    We observed that our portfolio was tilted more towards the boy category. But now with Hello Kitty and Garfield coming our way, I think we have one of the best characters in the girls genre.

    What are your plans with Rajasthan Royals?
    We are in hot pursuit to come out with products before the first week of April when the IPL kicks off. We have already worked out our strategies to tap the right licensees who will be able to add value to this fantastic brand on the ground level through merchandising.

     

    We have a three-year deal with Emerging Media and are targeting Rs 200 million of retail business in the first year. Since the time is very short, we are channelising all our resources towards this.

     

    We are also in discussions with few more goliaths from other sports, especially big international clubs. We hope to stitch deals with some of them soon.
  • ‘GEC space will see turmoil this year’ : Rohit Gupta – MSM president (network sales, licensing & telephony)

    ‘GEC space will see turmoil this year’ : Rohit Gupta – MSM president (network sales, licensing & telephony)

    2 009 is expected to be a rough year for all in media. Television is no exception. With the stockmarket collapsing and balance sheets getting battered, advertisers have become cautious and the current quarter is expected to be extremely choppy. Multi Screen Media president (network sales, licensing & telephony) Rohit Gupta concedes that clients are consistently assessing the environment and signing quarterly deals as against the annual ones earlier. He, however, is confident that Sony Entertainment will ride through the stormy times on account of the strength of its network.

     

    Indiantelevision.com’s Ashwin Pinto caught up with Gupta to find out about what lies ahead, the mood in the market, the importance of tentpole properties etc.

     

    Excerpts:

    How was 2008 for Sony in terms of revenues? What growth was managed over 2007?
    It was a successful year for us. All our channels grew their revenue. Some by 25 per cent, others grew in the range of 10-15 per cent. The other success story was the IPL. We created benchmark rates for Indian cricket before the event had even started.

    This year is expected to be challenging with the recession. What impact will this have on Sony and the television industry?
    As we move forward this year will present challenges. The key one is the meltdown. A client would cut marketing spends but television as a genre will still grow. We believe that television is the cheapest form of advertising in terms of the reach it delivers. TV gives you the best RoI and this is what clients focus on during a slowdown.

     

    Print and outdoor will take a larger hit but television will still grow. A recent report projected a 10 per cent growth which is fair. TV has been growing at 18 per cent over the last few years. While that will not happen this year, there will still be growth.

    For the IPL what is the upside being looked at this time around?
    We have established rates that are in line with what we had decided upon earlier. IPL will be a bigger property this year.

     

    Everybody including the franchisees have more time to prepare. Last time we just had 45 days to prepare. This year the hype will start after the auction ends. We will hold a meeting with the franchisees after 6 February to decide on the course of action to take. Also at the point of time there is no other major property on television.

    So you are confident on the financial performance of Sony for the IPL despite the slowdown?
    Yes! What happens during a slowdown is that the clients’ ability to take risks decreases. IPL is a proven property. There is no risk in being associated with it. People will put money on ‘sure’ properties. The IPL is one of them. Last time the IPL had an 80 per cent reach on Max.

    Have deals been closed?
    Yes! However I cannot divulge any details. Some deals are for both the IPL and the New Zealand series that comes before it. We do not have category exclusivity this time around for spot buys.

     

    This allows us to access more brands. Last time the IPL was not tested. Exclusivity was an incentive that we had to concede. By not giving exclusivity we will ensure that multiple brands can co-exist.

    But won’t it be a challenge to get many brands on-board in a difficult climate?
    You have to understand that cricket’s cost rating per rating point (CPRPs) are still holding up. The reach of the channel is key. Max does not have this issue. So we are confident of getting the desired rates.

     

    I don’t think that the rates are a problem. The challenge will lie in the outlay that a client puts on IPL. So this time around we will have smaller packages. The number of clients taking spot buys will go up. One does not have to buy all 59 games. A company can buy for ten games at a stretch. There is flexibility.
    Has the revenue split within the group changed over the last couple of years?
    I cannot give any numbers. However our dependence on the large channels is not that high. AXN and Pix are growing substantially. Max is now a very big channel in our network.

    What is the clients mood like in general?
    They are more cautious. They are adopting a quarter by quarter approach. They are not signing large deals for a year which used to be the case. For this quarter ending March, clients are being extra cautious. Companies want to show better results with this being the last quarter. So it will be tough.

     

    The key is to have tentpole properties that can be sold. You need to have a distinctive niche in the market. Clients want more accountability. As a broadcaster you need to be responsive and understand clients’ needs. You have to make sure that the client gets value back. Everything is not necessarily about a rate. The question lies in the effectiveness of the media buy.

    Apart from IPL what are the other tentpole properties coming up for the group?
    In March we are launching Operation Dikhla Jaye on Sony. This will be a directors cut where four of Bollywood’s top directors will produce shows for us. It will be a 13 week initiative and will be the first time that anybody has tried it in India. These are one hour shows. We have roped in directors like Madhur Bhandarkar, Mahesh Manjrekar, Vikram Bhatt. Then the IPL starts. Post that we will have re-launches of our big shows.

    In the GEC space are the new arrivals having any impact? Is the ad pie growing or merely getting sliced further?
    There has been growth overall. But this year since growth will be restricted there will be some slicing of the pie. The GEC space will see turmoil this year. New players will come in and others will go away. GEC costs are huge and it is a question of who will survive. The like of Star, Sony, Zee will always be around come what may.

     

    New channels will come. They may be on top for a while but the fact is that nobody is on top all the time. Clients also look at networks as opposed to channels per se. They want networks which are strong enough to withstand pressure. They want networks that have the sustaining power to ride over the tough times. Besides that you need big properties which ensure that clients look at you differently.

     

    Each of our channels is in the top four in their respective genre. Sab is number one in the second level GEC tier. Sony has managed to hold on to its share more or less. Other channels have experienced a bigger fall in the GEC space. We may not have many channels but what we have done is to focus on building them.

    How has Sony built up its client relationship management efforts over the years?
    Our focus has always been on giving value back to the client. We were the first to start a client servicing team four years ago. Then other channels started doing this. We work closely with brands to integrate them into our properties. This is how we add value that goes beyond just 10 second spots. Therefore even though there are days when ratings have not been what they should be the clients have supported us. The relationship with clients makes a big difference in terms of your ability to raise rates.

    Which categories will be affected in terms of TV advertising due to the slowdown?
    If you look at it the categories most affected by the meltdown which are real estate and retail these are not big on television. Finance was not as big on television compared with other mediums. Auto companies are shifting budgets from print to television.

    Coming back to the cricket front the New Zealand tour is the first time that Sony will air bilateral cricket. How is this event being positioned for viewers and clients?
    This is a full blown tour. India has not visited New Zealand since 2002. We lost very badly then and so this is a big challenge. There will be anticipation. In fact this is the Indian team’s biggest challenge after playing Australia twice recently.

    But isn’t the timing an issue as the telecast of the matches is very early in the morning?
    The timings are good for the T20 Games which start at 11 in the morning. The ODIs start at around 6:30 in the morning. Test matches start earlier but they are not a big revenue contributor compared with the other two formats.
    How many sponsors are being looked at?
    We have clients who are interested in both the New Zealand series and IPL. That would give them visibility from Feb till June. So we are doing special deals for them. Generally we look at six to eight sponsors.
    Are you also looking at doing long term deals with clients for IPL?
    No! We believe that the IPL which is a big opportunity is better served through yearly deals. You have the option to re-look at things.
    IPL broadened the viewer base. Has the client base also grown for cricket as a result?
    Yes! Godrej an FMCG company came on board. They do not associate themselves with cricket. Max New York Life came on board. It worked well for them. It was not the traditional clients that came on board. This year also you can expect to see some surprise companies coming on board. IPL after all changed the way TV viewership happens. It is not just the male TG that tunes in.
    Will the IPL be simulcast?
    No! It will only be on Max. We did that with the Cricket World Cup in 2007 where some matches also aired on Sab. However viewership got disrupted and the channel loses share. Then it is difficult to get viewers back.

    When HBO left there was a gap created. Is Pix now starting to fill this gap?
    Pix has made a lot of progress over the last couple of years. Pix started when there were already established players. Now it is competing. In some weeks it beats HBO. Advertisers have followed this. Pix is making investments in terms of acquisitions. The aim over the next couple of years is that in terms of ad revenues it can reach the level of HBO and Star Movies.

     

    It is pitched as a premium movie channel. It delivers in the 25+ SEC A, B category which is what a lot of marketers target. All the large brands are on it.

    How come Pix decided to air soccer with the FA Cup?
    The audience for it is similar. It is SEC A,B. We decided to offer viewers something new and extra. Matches air on the weekends and so the movie schedule is not disrupted.
    The other two major distribution bouquets have two English movie channels – a mass one and a niche one. Isn’t Sony at a disadvantage here with just one channel that does not have the latest offerings?
    It does not affect the advertising side. Channels like MGM (which is in the Star Den bouquet) do not carry ads anyway and it is dependent more on a subscription kind of revenue stream.
    What is the roadmap forward for AXN?
    AXN is doing well and has been growing at 25 per cent CAGR. You will continue to see local content. You will shortly see the AXN Action Awards. Each year you will have three shows produced in India.
    Does cost control become important in this environment though?
    This is an area we always look at. It is something that we are always conscious of and it is not as if this area has suddenly assumed importance. For us it is business as usual. One has to see the returns more carefully though.
    On the licensing front how has business grown over the past year?
    This was small four years back. However we participate more actively in trade fairs like Mipcom and we showcase more content in the form of formats there. Our shows are sold in European markets, the US. We took all our formats to Mipcom. along with other shows like Filmfare, Stardust Awards. The other aspect is the Hindi movie licensing business. We syndicate them wherever we have rights.
    Finally we are seeing channels advertise on rivals. What is Sony’s policy?
    We do not advertise on competitors nor do we accept ads from them. We accept ads from kids channels, news channels as we do not operate in that space. But you will never see us air ads from a movie channel belonging to a rival network. We are not desperate for revenue.
  • ‘The mad race to get cricket rights has created a bubble’ : Venu Nair – WSG South Asia CEO

    ‘The mad race to get cricket rights has created a bubble’ : Venu Nair – WSG South Asia CEO

    With the Indian Premier League (IPL) in its catch, the World Sport Group (WSG) is sitting pretty. Even as it plans to cash in on the new T20 format that is set to change the cricket economy, the sports marketing company has also set its sights on the growing popularity of soccer and golf.

    In an interview with Indiantelevision.com’s Ashwin Pinto, WSG South Asia CEO Venu Nair unveils the dynamics of the sports business.

    Excerpts:

    How far has World Sport Group progressed in India?
    When we set up our office in India two years back, we had a plan to establish a credible business over a three-year period. We looked at cricket, soccer and golf. We decided to develop each of them independently. Cricket and golf has grown phenomenally. However, with soccer it is still an uphill task.

    We changed our football outlook to a five-year plan. We own all the rights and work closely with the Asian Football Confederation (AFC), with whom we have been working since 1992. Our current contract runs till 2011. The fact that we have worked with them for so long to promote soccer across Asia speaks of the fact that we are long term players.

    How have you grown the cricket business?
    We have brought in professionalism into the management of the title and central sponsorship rights. We tell clients what they can avail of over a year. From a brand perspective it works, as they are able to plan forward. This gave us an entry into cricket at the highest level.

    During 2006, the BCCI’s sponsorship rights were available. We paid Rs 1.8 billion for it. Prior to us, these rights were vested with corporates and not with a proper sports marketing company.

    How is this deal with the BCCI working out?
    We work on a margin of 15-20 per cent. When we acquired the rights, we bought it at a premium. Two years down the line we have managed to stay at par with our revenue targets.

    Where are the opportunities for WSG in cricket other than the BCCI and IPL?
    There are opportunities to represent other boards. People are looking inward into India and they see the job we have done for the BCCI. As far as IPL is concerned, we have aggregated the media rights and sold it outward.

    But aren’t sports bodies working directly with broadcasters?
    Broadcasters are limited by the region that they want to serve. They often tend to sell the rights outside their interests to other parties. This puts the broadcaster into an agency position, which is not often a comfortable area to be in as it is not their core expertise. So, to say that sports bodies increasingly work with broadcasters is an anomaly.

    Fifa, for instance, works very closely with sports marketing agency Infront.
    ‘You will have to put higher monies on the T20 format and put the squeeze on Tests and ODIs‘

    WSG managed a coup with the IPL rights. What targets have you set?
    We expect to start making money by the end of the third year. We have sold rights it to many territories including the US and Canada. We have let some territories sample the product like Sky in Italy. We sold IPL to the Southeast Asian countries including Singapore, Malaysia and Thailand.

    Are these deals long term?
    We have sold everything with the ability to re-look at periodic intervals at the contract. We will see how it is working. It had to be a partnership model. The format was something new.

    How does the IPL build in club loyalty and sustain viewership interest?
    Teams will have to build more local heroes. Catchment areas have to expand. If the IPL franchise owners treat it just as a balance sheet-led proposition, then it may not survive in the long run.

    The IPL will face competition from other boards. England wants to start a league in 2010. Australia, South Africa and New Zealand want to start a joint league in 2011. How does this affect the IPL?
    In soccer different leagues like the EPL, Spanish league, and German Bundesliga are played at the same time. But the EPL is most watched. The IPL is a home grown product and has the first mover advantage. More home grown talent will take centre stage. Foreign players might want to play the IPL to shore up their revenues. They will then reach a stage where they might want to play in another league to enhance their skill. The player migration seen in soccer will happen here as well.

    But when other leagues come up, won’t some monies shift from IPL to them?
    No! 100 per cent of the IPL revenues come from home grown clients. They want the local audience and so they will not invest in an Australian or an English league.

    In India sponsorship revenue is higher than ticketing revenue. In England it’s the reverse. However, a time will come in India where ticketing revenue will grow. Hospitality is another area which, if developed properly, can be a solid, successful revenue stream. Soccer clubs in Spain and England make a huge line of revenue from this area.

    If the revenue potential is so strong, then why are owners already selling stakes so soon?
    They are looking to sell a stake at a premium. They are not looking at funding their working capital needs.

    Will Test cricket and ODIs lose some of their lustre as T20 comes up?
    That is the market reality. Next year there are around 120 games, which include IPL, T20 World Cup, Champions T20 League. And one would not have known about it two years back.

    You will have to put allocated monies on this new format and squeeze monies on the other two formats. Even from a viewer’s experience how many takers are there for a Test Match! The purists are in a minority. Cricket is now more about entertainment. T20 has taken that window; you can watch a game in three hours.

     

    The PCB got $140 million for its rights. So isn’t there still value in the traditional formats?
    In bilateral events, the icon series will get money. If it is India versus Pakistan, then advertisers and viewers will chip in. The whole value of the deal with the PCB comes from these two series that are present in the contract. At the same time, there is no guarantee that they will get the same value. They will probably get the same monies as in 2004 when India toured Pakistan after a long time.

    However, the acquisition costs have shot up. In advertising you may not see a corresponding incremental value as it could get diverted to T20. The escalation may not happen.

     

    Is there a danger of some broadcasters going bust due to a huge escalation in rights fees?
    Yes! Ideally, ad rates should double which probably is not going to be the case. The rights fee has gone up disproportionately due to the need for content in a calendar year. The challenge for broadcasters is to figure out where the business is going. You also need to take care of distribution. In India sports channels have to have a certain number of events in a year. Otherwise the cable operator may stop beaming you. Cricket is reaching a saturation level and there will be a tapering down of values.

    The mad race to get cricket rights has created a bubble that will eventually burst. For example, tennis went through this huge bubble a few years back. It also happened with soccer.

    Broadcasters who have bought rights at high rates will have to sit down with their books at the end of next year and strike out the red. Market forces will pull prices down as the high price cannot be sustained. As a sports marketing company, I can bid a certain amount but if it is not in touch with the reality, then I stand to lose.

    Sports bodies, however, have to realise that the value that sponsors attach to the older formats of the game will increasingly be less. A sports body, though, will not lose money as it will get transferred from one format of the game to the other.

     

    Even the 2010 soccer World Cup rights went for a five-fold rise. Why?
    You cannot underestimate the fact that soccer is catching up. This is especially the case in urban India which has been fed a diet of quality football from world leagues.

    The awareness of global soccer icons due to the media coverage is also high. This is why premier tournaments are time bound. It has the carnival atmosphere. People follow certain teams. Once people watch it, advertisers also want to be in on the action.

     

    You wanted to do a league around soccer with AIFF and use the franchise model. What happened to that?
    We worked on a plan around a year ago. We did not go anywhere because of a combination of reasons. Firstly there already exists a certain kind of league. The soccer development process in India is not as robust as it should be.

    If the AIFF actually chalks out a 20-year plan to grow soccer at the grassroots level and has a realistic target, it can work. It is not about sending the team to the next World Cup.

    Cricket has been managed well at the administrative level. Cricket has also had periodic highs like winning the 1983 World Cup. This ensures that interest stays. After the 1950s, there has not been a high in soccer. Even followers of the sport do not have role models to look up to. If the AIFF comes up with a proper plan, then I am sure that there are enough corporates out there who are willing to invest.

    Bharti Airtel has committed Rs 100 crore. If it is spent in the right manner, it will give you results in 10-15 years. But thinking about reaching the 2010 World Cup final is a folly when you cannot reach a South Asian tournament.
     
    How has your work with the AFC been progressing?
    It has done well. The Asia Cup is held every four years. The AFC Champions League happens every two years. Everybody plays it. Australia has come through. We work with the Australian Football Association also on their leagues. Australia reaching the soccer World Cup was a culmination of many years of work. The sport has been revived as the body had a long term plan.

     

    What activities does WSG do in Golf?
    We acquired the rights for the Indian Open which is the most prestigious event. The deal is for six years and slowly we have been able to increase the prize money. The Indian Open is now a million dollar product. Next year we will add $250,000 more to the event.

    Our aim is to take the prize money to $5 million given the fact that Golf is slowly growing in appeal in India. Our goal is to develop another multi-million dollar golf property in the first half of the year. We want to have two Indian Golf events that occupy a prominent position on the Asian Tour calendar.

    What is working in our favour is the fact that marketing managers today want to invest to reach different levels of the strata.

     

    What are the plans in the player representation business?
    In India cricket is intricately linked to player management. You cannot stay away from this. We figured that small entrepreneurs were running this business. There was no professional marketing company running athletes in India. To a large extent this is still the case.

    We manage Sachin Tendulkar. We have a five-year deal with him so that we can monetise his brand. Since Sachin has aged, we have moved away from brands that he was endorsing in the past. He is a family man; his core values are honesty, integrity and long-term commitment. That is why you have brands like Aviva, Royal Bank of Scotland and Canon. We are looking at brands that can go past his playing days.
     
    Are you looking at more stars?
    Yes, but a decision will only be taken after the second season of the IPL gets over. Player management is a tricky business. We have to be convinced that the player wants a long-term partnership rather than a short term money-making venture.

     

    What impact will the economic downturn have on the business of sports marketing?
    There will certainly be an impact. What the extent will be is early to say. Numbers will get reduced by 15-20 per cent. It will depend on the extent that the global economic crisis has on India.

    We may have to look at our cost basis. We have to re-look at future acquisitions; we will have to work with experts to get a fix on what the economy might look like three or five years down the line before making another acquisition. Our buys will be made on the basis of market realities.