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Tag: Lalit Modi

  • Astill’s study of India through cricket binoculars

    Astill’s study of India through cricket binoculars

    The book came out last month; but our review has found space on indiantelevision.com only in September. Readers, who have not yet got their hands on the book, would be wise to do so. I am a cricket fanatic and thoroughly enjoyed reading this fast paced close peek of the evolution of modern India. And would advice you to do the same if you love the game of the red cherry – or white one – if one looks at what’s in use in modern day cricket.

    James Astill

    James Astill, the Economist’s correspondent in India between 2007 and 2010, watched the rise of IPL. With cricket’s biggest shebang as the back ground, he has gone on to narrate a wider story of modern India.  Much of this story is known. Yet while Astill relies on previously published material, what makes his book exceptional is his first-hand reporting.

    The ‘tamasha’ of Astill’s title is a Hindi word meaning entertainment or show. As he tells the story, it was inevitable over time that the Indian public would forsake the extended dramas and longueurs of Test cricket for the shorter, more colourful and energetic forms of the game. This process began with India’s completely unexpected victory at the 1983 World Cup under the leadership of Kapil Dev, and has now reached its ultimate incarnation in the cat and mouse game also termed as the Twenty20 format and controversy’s favourite child the Indian Premier League.

    Astill is a keen follower of the game and says “the story of Indian cricket is not only about cohesion and success, but is deeply pathetic.” He has very objectively and figuratively described the poor state of infrastructure in the country; a place where millions of children aspire to wear the Indian jersey someday. But the harsh truth is they are unlikely to even get a chance to play an organised version of the game, with a good bat and leather ball. One of the most touching stories is of the railway clerk in Rajkot who, using a concrete pitch and tattered nets, has coached several first-class cricketers, including his son – now a leading light of India’s Test team.

    Politics in democratic India, Astill observes, is “feudal, corrupt and vindictive”, and the administration of cricket is no more than an aspect of politics. Money was everything in the establishment of the IPL, the cricket itself almost incidental. More than $700 million was paid for the first franchises. The Indian captain, Mahendra Singh Dhoni, is reckoned to earn $21 million a year from the game. Foreign mercenaries such as Kevin Pietersen and Shane Warne were bid for like prize bulls at a livestock market. At some matches the players’ salaries were flashed up on the scoreboard alongside their batting averages; going on to emphasis the fact that the sport has been portrayed in a completely different light.

    Astill seems to have talked to everyone who is anyone involved in this deeply unattractive business – including Lalit Modi, the now-disgraced founder of the IPL, whose capacity for intrigue was exceeded only by his genius for making enemies. Almost equally disconcerting is the formidable Sharad Pawar, who combines the job of India’s agriculture minister with controlling the Indian Cricket Board and being president of the International Cricket Council.

    In comparison with the corporate (read: administrators) and the Bollywood stars who keenly follow the action from the boundary’s edge, the players seem considerably more likeable. Astill tracks down the inspirational Warne, former captain of the Rajasthan Royals. Warne speaks up expressively on behalf of Twenty20, before innocently sabotaging his case by admitting that “for me it’s always about Test cricket”.

    The striking thing about most of those in charge of the IPL is their lack of real passion for cricket itself. They are in it to seek exposure, to sell advertising, to exercise power. Almost none of the money filters down to fund coaching or grass-roots facilities. As for the games themselves, Astill’s judgment is that most lack tension and the real edge of competition.

    Astill relentlessly highlights all this and comes to the sad conclusion that India may end up killing the great traditions of cricket. And yet Astill finds that in the streets and on patches of waste ground in the slums and villages of India, (during his stint in the Indian-subcontinent) the game is furiously alive, uniting millions in the simple desire to hurl a ball fast or spin it with conniving intent, and to hit it far. “This is where Indian cricket resides,” Astill writes eloquently, “far from the elite, the corrupt politicians and turkey-cocking film stars who have laid claim to it.” And therein lies the hope that this most beautiful of games will survive.

  • ICL will wait for more disclosures from Modi before acting

    ICL will wait for more disclosures from Modi before acting

    MUMBAI: Lalit Modi’s tweets have brought life into the Indian Cricket League (ICL), the original but defunct T20 format league floated by Subhash Chandra.

    Post Modi’s revelations on how the BCCI pressurised to kill the ICL, the Essel Group has said that it will wait for further disclosures from the former IPL commissioner on how they tried to sabotage the ICL, before announcing their next move.

    “Essel Sports, promoter of ICL, has received lot of queries on the recent disclosures made by a former member of the BCCI, openly admitting to having initiated various actions against the ICL operations,” Essel Group head, group finance and strategy Himanshu Mody said in a statement.

    “These revelations justify our position that the Twenty20 format was conceptualised and formulated for the betterment of Indian and World cricket by ICL and the Essel Group,” Mody added.

    “We await the entire details to be made public as stated by the former BCCI official and will determine the next steps accordingly,” he further added.

    Meanwhile, Lalit Modi, who was also part of the BCCI at that time, wrote on his microblogging site that when he was at BCCI, the mandate given then was to scuttle ICL.

    “BCCI arm twisted every cricket board and ICC to change there constitution. The constitution of every board was changed and ICC made ICL redundant by its act – by making it unauthorised cricket. Worldwide anti competition laws were studied and finally though against most Laws – the ICC changed there constitution to protect its members,” Modi said.

    He clarified his stance, saying that when you work for an organisation – and it gives you a mandate to do something then – its one‘s job to do that to the best of his ability.

    “Yes I was part of the BCCI when we scuttled ICL. That was the mandate of the organisation. It was not my personal agenda. I have no personal issues with ICL. I am of the personal opinion that more competition in the game is good for the game and its players. I have always done what‘s required by any organization I have worked with. Well I guess I do my job well. That‘s why I give results,” Modi wrote.

    He added that BCCI was afraid of Subhash Chandra‘s clout in media and ability to take over the world of cricket. “Internally we knew he would do a better job,” Modi added.

    On the steps BCCI had taken, Modi wrote: “All correspondence related to scuttling ICL and any unauthorised league – will be made available on my website www.lalitmodi.com soon.”

    Finally, he added that it was a “mistake to have systematically used everything in BCCI‘s arsenal to finish ICL”.

    “Yes, we as BCCI called all and sundry to oppose ICL. Cricket associations were told not to give there grounds or fear loosing matches. Players were told do not play for ICL or we will black list you. This then BCCI had to implement through change of constitution. BCCI even terminated Zee Sports contract unfairly as they had launched ICL and BCCI wanted window for IPL., Which I am told is in court now. The final straw was to offer ICL players an amnesty scheme so that they would desert ICL and join IPL. Commentators were called and told do not associate with ICL or BCCI will ensure we will not take you. Umpires were told the same. It was systematically done.

    BCCI than called every member of ICC to ensure that they all help in changing the ICC Constitution to outlaw ICL. ICC set up a three member committee with me, Giles Clarke president ECB and Norman Arendse president CSA to draft the new constitution. We drafted the same and then BCCI ensured it was approved and implemented with lightening speed. Result – Demise of ICL. BCCI even went to the extent of black listing suppliers like TV Production Cos, event managers who worked with ICL. ICC used Bird and Bird a UK based law firm to ensure regulations to stop ICL was made consistent globally. The three member team worked with them,” Modi explained.

    However, BCCI chief Shashank Manohar refused to react on Modi’s allegations. “I don‘t want to react at all to Mr Modi. Modi seems to fascinate the media. He does not fascinate me,” Manohar said.

  • ‘IPL franchise ownership seems to be driven by celebrity rather than commercial reality’ : Intangible Businesses valuation director Richard Yoxon

    ‘IPL franchise ownership seems to be driven by celebrity rather than commercial reality’ : Intangible Businesses valuation director Richard Yoxon

    The Indian Premier League (IPL) defied financial gravity at a time when the world was struggling to fight the menace of recession. Even as capital became scarce, the world’s hottest cricket property managed to renegotiate a nine-year broadcast deal in 2009 for a whopping $1.6 billion. The earlier agreement, signed a year ago, had valued the TV rights for $1.03 billion over 10 years.

     

    The temporary refuge in South Africa was a welcome aberration, establishing the IPL as a global property. In 2010, the IPL became bigger and better as it attracted larger audiences, costlier sponsorship deals and fatter franchise bids, growing the cricket economy.

     

    Then came the Lalit Modi saga and charges of match-fixing, rigging of bids, financial irregularities and betting. The architect of the IPL is now suspended and a clean-up exercise has begun.

     

    A parallel has often been drawn between the IPL and the English Premiere League (EPL) that houses some of the world’s iconic soccer clubs including Manchester United.

     

    The IPL, however, has a big mountain to climb. Its TV rights, the main revenue supply for the entire structure including the teams, went for much less. Last year the EPL‘s TV rights bundles were acquired for $2.6 billion for 3 years. And it‘s not just a big difference in value. More importantly, the EPL‘s TV rights will be renegotiated twice before the IPL‘s current deal expires.

     

    But the IPL is just three years old and has seen a stupendous growth. It can learn important lessons from the EPL as it scales up, including doing shorter term TV deals in future as the property gets well established.

     

    The IPL team owners should also be cautious in not repeating the mistakes committed by their EPL counterparts. Some of the EPL club owners have funded their acquisitions through huge debt and have gone on to pay unrealistic amounts to purchase players. In fact, the EPL clubs are popularly known as the ‘rich boys‘ toys‘ that appeal to the owner‘s ego and vanity.

     

    In an interview with Indiantelevision.com‘s Sibabrata Das, Intangible Businesses valuation director Richard Yoxon talks about the challenges that sports properties face as they grow up to be run like big commercial businesses.

     

    Excerpts:
     
     
    Will it be right to compare the IPL as a potential sports property that can grow to the scale of the EPL in future?

    I think the IPL has more in common with the American franchise sports such as NBA and NFL than with the EPL. The success of English football was built on interest from local communities and commercialisation came a lot later. American sports and the IPL, on the other hand, were created and driven by commercial objectives.

     

    Football is the major sport in most countries. NBA, NFL and baseball are only major sports in the US while India is the only major economy where cricket is the number one sport.
     

     
    Can the IPL leapfrog?

    On the basis of global appeal, the IPL will never come close to the EPL. Commercially it‘s possible due to the size and growth of the Indian economy, but I think it‘s unlikely except in the very long-term as in a global context cricket is small beer compared to football.

     

    In a renegotiated deal in 2009, the IPL‘s TV rights went for $1.6 billion for 9 years. In contrast, last year the EPL‘s TV rights bundles were acquired for ?1.7 billion ($2.6 billion) for 3 years. A very big difference. More importantly, the EPL‘s TV rights will be renegotiated twice before the IPL‘s current deal expires.

     

    England has 3 professional leagues below the EPL and over 90 professional clubs!

     

    The Indian economy (2009 GDP $1,235 billion) will need to be multiple times bigger than the UK economy (2009 GDP $2,184 billion) for the IPL to leapfrog the EPL.
     
     

    Several EPL clubs are sunk in debt while the IPL has run into controversies very early in life. Do you see sports businesses being in trouble across the world?

     Not many football clubs currently or historically make a profit. It is often suggested that the clubs are ‘rich boys‘ toys‘ that appeal to the owner‘s ego and vanity. Football clubs are trophy assets rather than profit centres. This is a key similarity as I think IPL franchise ownership seems to be driven by celebrity rather than commercial reality.
     

     
    Are the allegations of match-fixing, rigging of bids and betting going to impact the IPL as a brand?

    The events are certainly not helpful but the impact will be minimal in the long-term if the BCCI acts promptly and transparently to address the problems. The Indian public loves Twenty20 cricket and the competition‘s format. This love affair with the game is not going to change as long as the game is cleaned up commercially. What‘s the alternative? I can‘t imagine the Indian public switching to football, hockey, kabaddi or even test cricket with equal fervour and enthusiasm.

     
     
    What is the IPL worth in value after 3 years of existence and how does it compare with the EPL?

    I think there is nothing wrong with the progress made to date by the IPL. I think the BCCI / IPL has done amazingly well in a short space of time.

     

    But we haven‘t valued either brand. Brand Finance valued the IPL brand at $4.13 billion, but I struggle to understand how the brand of a business whose main source of income is a 9-year TV deal for $1.63 billion can be worth so much.
     

    ‘IPL franchises certainly do need to scale up to justify the high franchise fees. The amount they need to scale up in the time available appears unrealistic‘

     

    But you have valued the IPL franchises and they are much below that of Brand Finance‘s estimates. Why?

    Brand Finance is, perhaps, more optimistic than us. Regarding the IPL, they have more ambitious growth rate projections and are less conservative in discounting.

     

    But if you look at our valuations, the top four teams are almost having similar values (Royal Challengers Bangalore at $37.7 million to Chennai Super Kings‘ $36.1 million). There can‘t be any particular team breaking too far ahead at this stage because there is no big difference among them. The difference is mainly due to the size and level of interest in the IPL franchise‘s catchment areas. Rajasthan Royals ($27.5 million) is distinctly disadvantaged compared to Royal Challengers Bangalore and Mumbai Indians (5th at $32.7 million).
     

     
    Do you see revenue streams a big problem with the IPL teams?

    They certainly do need to scale up to justify the high franchise fees. The amount they need to scale up in the time available appears unrealistic.

     

    As far as licensing and merchandising revenues go, the IPL franchises can tap their growing fan base. There will be a limitation, though, if you compare it with EPL clubs like the Manchester United where the shirts are even bought by the Japanese or the Chinese. The IPL team merchandise will find it difficult to cross the global boundaries and communities outside the Indian diaspora.
     

     
    What are the lessons the IPL needs to learn from the EPL?

    The IPL needs to negotiate shorter TV deals. I suspect that the IPL‘s 10-year deal (renegotiated deal after a year is for 9 years) was driven by necessity as the concept was unproven at the time of the negotiation. A longer deal was probably needed to get to potential franchise owners on-board by providing the assurance of guaranteed revenues and media coverage over a sufficient period to justify the initial franchise setup costs.

     

    The IPL is a closed shop. There‘s no promotion or relegation. Teams should earn the right to play in the IPL rather than buy their way in. The British public loves an underdog (hence I follow Rajasthan Royals in the IPL) and it is great for the sport when a small team gains promotion to the EPL on a shoestring budget and even beats one of the big names (Burnley won promotion to the EPL last year and beat Manchester United in their first home game).

     

    It is equally interesting when the big teams face the threat of relegation despite significant investment in players (Newcastle relegated last year). Relegation also maintains interest for longer; once teams are out of contention to win the IPL there‘s little to play for. It would be good to see the IPL develop feeder leagues to give smaller cities the opportunity to develop teams and aspire getting a sniff of the big time.
     

     
    When did the EPL commercialise?

    Football is a fabric of British society; it has been developed over 120 years. But the first big step towards commercialisation was when TV deals were renegotiated in 1992. Twenty top clubs separately negotiated for TV rights, which became the main driver for their increase in revenues. Previously, the TV rights were negotiated collectively for all the 90 clubs.

     

    Merchandising is a huge income for certain big clubs like the Manchester United. But for most of the clubs, the main income is from TV. Portsmouth, for instance, reported a total income of $60 million last season, out of which $40 million came from TV.

     
     
    Why has the enterprise value of the EPL come down recently?

    The same reason as any other market or business. Recession! Leisure and entertainment expenditure is cyclical. It‘s to be expected that consumers spend less on leisure and entertainment during recessionary times. In the medium and long-term, leisure and entertainment is a fast growing but highly competitive market.

     
     
    Why have the EPL clubs amassed huge debt?

    Two reasons. First, leveraged buyouts. Manchester United and Liverpool were bought by Americans using debt finance which was pushed onto the club‘s balance sheets. The clubs did not create these debts.

     

    The second reason is bad management – spending more than the club can afford in the hope that any resulting success will pay for the gamble.
     

     

    Is there a current crisis?

    What crises? The EPL is as popular as ever. Football clubs going bust is nothing new. The fans suffer in the short-term but the club survives.

     

    There are no major threats to the EPL. It‘s been going on since 1888 (rebranded in 1992); it‘s survived two world wars and hooliganism in the late 1970‘s / 1980‘s. The current exchange rate and increased income tax rates make playing in England less appealing financially for the world‘s top footballers. This has yet to have an effect but this summer I expect we‘ll see less big name players than usual moving the EPL in favour of Spanish, Italian and German leagues. This will not affect popularity in the UK but may have an impact on global interest in the medium term.
     
     

    Have foreign owners contributed to the financial mess?

    International investors have actually made the EPL economy much bigger. The problem has been with the buyouts being funded by debt and the purchase of players at a very high price. 
     

    Does the EPL need a restructuring?

    No. Some clubs need probably restructuring but the EPL is a profitable business. The supporters of several clubs would like new owners (Manchester United, Liverpool). Overtime, I suspect and hope that we will see more clubs owned by supporter‘s trusts, similar to the Barcelona model.
  • 2009: Top 10 Executives

    2009: Top 10 Executives

    2009. A year when most of the television industry gasped as the Indian economy slowed down and advertising and distribution revenues dried up even as costs went up. Executives burnt the midnight oil grappling with the downturn. Most of them deserve a salute for coping with the tough times. But there were some who came out triumphant and did wonders for the companies they lead. Indiantelevision.com takes a look at those who made the cut in our 2009‘s Top 10 Executives listing.

    Our list is by no means comprehensive, but these gents and ladies clearly stood above the rest. The executives have not been listed in order of importance or achievement, and sure there are many more who made a difference. We raise a toast to them.

    In the meanwhile take a dekko at our Top 10 Executives of 2009.

    Rajesh Kamat & Ashvini Yardi

    Rajesh Kamat did what was considered nigh impossible in 2009. Under his leadership, Colors, one of the late entrants in the general entertainment television sweepstakes, toppled both the leader Star Plus and the second placed Zee TV from their perches. He did not stop at that. With the help of clever engaging and disruptive programming from his programming head Ashvini Yardi, he maintained that top slot for the rest of the year.

    And Kamat achieved that in just a matter of 13 months – a feat which could well enter the Guinness Book of World Records.

    For long, rivals Sony and Zee had taken a shot at the top spot, but Star Plus appeared to be unshakeable. Kamat and his band of merry programmers however made it look fairly easy with a mix of differentiated, disruptive programming and distribution (Kamat‘s 3 Ds) on the back of savvy marketing. As the year was ending, he had actually got his company close to profitability with revenues of close to Rs 6.5 billion.

    Kamat‘s success has to be juxtaposed against what happened to other players who dared to challenge the leader: new entrants 9X (launched by former Star CEO Peter Mukerjea) and Real took a beating and almost wound up. The other player NDTV Imagine ended up at the No 5 spot, and finally found a new owner in Turner.

    During his days at Star Kamat had seen the channel rise from obscurity to leader. And he had gained amazing consumer insights during his earlier stint at Coke. He brought all of that bear in his uphill battle against the leaders. He gambled with a young enthusiastic team and the gamble paid off.

    Today, he is the most sought after TV executive in the country. And he was rewarded with additionally responsibility just as the year ended: he was given additional charge of strategy, legal distribution and finance of the Viacom 18 group bringing the channels MTV and Nickelodeon under his charge.

    2009 also saw him take an extremely calculated risk. Nine months from launch, he took the channel pay putting it as part of the One Alliance bouquet, distributed by MSM Discovery. The timing would not have been better as IPL gave the channel a good mileage. Later he got Amitabh Bachchan to don the hat of Pop Philosopher for Bigg Boss and now Big B is taking the channel to US and UK as brand ambassador. Additionally, he got his son Abishekh to host Bingo, a popular international format. At the time of writing, Bingo has done it once again for Kamat: the show has generated higher ratings than other game shows.

    A large part of that credit goes to Yardi who has been the creative driving force behind Colors. A woman with a vision to create a channel so unique and distinguished from anything ever viewed by India, she has always given priority to innovation and creativity. Her focus on fresher concepts and disruptive programming is what elevated Colors to its leadership position so quickly.

    From the word go, Yardi stressed that the shows on her channels have to have “meaningful entertainment”. The characters are not in black or white but have different shades. Yardi strongly believes that Colors offers ‘something for everyone‘ and ‘everything for some‘.

    Known for incorporating audience insights in her search for the perfect television shows, be it fiction, reality, game show or any other format, Ashvini has been responsible for making entertainment bigger than ever and effectively changed the way Indians viewed television.

    2009 saw shows with hard hitting messages such as Na Aana Is Des Laado and Uttaran climbing to the top positions on the charts while the Colors flagship show, Balika Vadhu, continued to reign over peoples‘ hearts and minds. And as far as reality shows go, 2009 was the year for the biggest ever changes in the reality television scene. With Fear Factor getting a lot more exciting and the Big B Amitabh Bachchan himself hosting the third season of Bigg Boss, reality in India touched new heights in 2009.

    Genius clearly does not go unnoticed, and in Ashvini‘s case, her talent has been recognized from time to time by peers and various industry institutions. She has been the recipient of many an honour, amongst them being the Media Personality of the Year title at India Today Woman‘s Summit, apart from being hailed as one of the top 50 powerful people of 2009 in India by Business Week.

    Perhaps defining Ashvini in one word may not be easy, but trendsetter comes rather close. And now, she is at it again, conquering newer peaks, bringing in fresher ideas and ready to set some new trends in 2010.

    Uday Shankar

    While most media observers and trade writers in India tend to think that Star India CEO Uday Shankar missed the mark in 2009 because of the toppling of Star Plus from its leadership perch, the word overseas and in corporate circles is that he did an excellent job and continues to do so; that the Murdochs are pleased as punch with him.

    During the year, the former journalist continued the network‘s spread into regional language markets and even managed to get leadership status in one of them. He kept a sharp eye on profitability in difficult economic times, returning pleasing figures for the network.

    Viewed from a different perspective he staved off an aggressive attempt from No 3 Zee TV to usurp his GEC flagship channel Star Plus from its No 2 spot, even though he conceded the leadership position to rival Colors. He gambled with risqué programming during the year, something which got him a rap on the knuckles from the government, but also got reams of media coverage and some praise for pushing the envelope with shows like Aap Ki Kacheri.

    And as the year ended, he was gearing up to do battle and regain Star Plus‘ numero uno status: he had restructured the Hindi GEC, bringing in whiz kid Gaurav Banerjee to look after the channel. Star Plus GM Keertan Adhyanthya was moved out to head Star Movies and Star World. He had also put wunderkinder Sameer Rao in charge of Star Utsav and Star Gold.

    With Rupert Murdoch‘s News Corp restructuring its broadcast business in Asia, Uday Shankar got his pat on the back when he was delegated with many more tasks during 2009. He was handed over the responsibilities of managing the sales and distribution offices of Star in West Asia, Britain and the US, besides growing the Indian market and being under the direct mentoring of James Murdoch, the group‘s head of Asian and European operations.

    Uday also gets to look at the movie business with Fox Star Studios India CEO Vijay Singh. The grandiose plans are to distribute 18 movies a year and be involved in production. Avatar has become the biggest Hollywood hit in India, grossing over Rs 1 billion.The biggest catch in the distribution net is Shah Rukh Khan‘s My Name is Khan, set for release in February.

    His big win for 2009 was the runaway success of Star Jalsha in just its first year of existence as a Bengali general entertainment channel. It created waves in east India with its programming which gelled with audiences. Then he drove his team to come up with new programming at Vijay TV and Star Pravah – initiatives which are bound to start bearing fruit over the next few months.

    If there was one area which looked a little worrisome for Uday Shankar during 2009 it was the loss of the leadership position of Star Plus, its flagship channel in the Hindi entertainment space. Star Plus conceded it near nine-year monopoly to newbie Colors mid way through 2009. But that did not deter him as he continued to focus on re-jigging the programming and on the bottomline. The network also courted controversy thanks to its dare bare all on TV show Sach Ka Samna adapted from The Moment of Truth.

    Meanwhile, keeping pace with rival MTV, Shankar also saw Channel [V] re-furbish its content with a host of new shows under his leadership as the channel shifted gears to 60 per cent music and 40 per cent reality show content.

    He has his work cut out for him in 2010, but knowing Shankar he well might deliver. Yet once again.

    Sameer Manchanda

    He could well be labeled the cable cowboy of India. He has aspirations – like his esteemed US counterpart John Malone who agglomerated cable systems all over the US into one national network – to transform the fragmented Indian cable industry and create a giant Indian cable TV network.

    And to that end he took his company DEN Networks public this year raising Rs 3.64 billion through an initial public offering. The market cap of DEN today is Rs 24.72 billion.

    It looked tough seeing it through, but he finally cobbled together investors who helped in the oversubscription of the issue.

    The man being referred to is Sameer Manchanda, chairman and promoter of DEN Networks Ltd and the joint managing director of IBN18 Broadcast Limited.

    Manchanda is a feisty fighter. He spent many years with NDTV when he broke away to set up IBN18 Broadcast, along with Rajdeep Sardesai and Raghav Bahl in 2005. Channels such as CNN-IBN, IBN7, and IBN Lokmat, followed. All three channels have become a news force to reckon with and Manchanda was appointed as the president of the News Broadcasters‘ Association.

    A fellow of the Institute of Chartered Accountants of India, he has always been credited with stitching lucrative deals for the company. He founded DEN in 2007 and he was quick to seize the opportunity in cable TV. He prepared the base for expansion by getting distrib veterans Anuj Gandhi and SN Sharma on board and then went about building the network in the North.

    He first expended DEN in Delhi and Uttar Pradesh, the two lucrative carriage revenue markets for cable networks from broadcasters. DEN also gobbled up Amogh Broadband Services, a leading MSO promoted by former Karnataka chief minister D Kumaraswamy‘s family. It is also a major force in Haryana and Rajasthan.

    In 2009 DEN paced up in Gujarat and made a breakthrough in Mumbai by entering into a joint venture with Ravi Singh‘s cable network in Ghatkopar, a suburb in central Mumbai.

    Manchanda can be credited with the success of DEN‘s IPO in 2009, but the challenges are lying ahead. The biggest of them all: to spread digitisation across the network, launch broadband services, and make market corrections.

    Punit Goenka
    “I would not like to be in his shoes as expectations of him are very high because he is my son, but he has shaped up well,” these are the words Subhash Chandra spoke about Punit Goenka recently. The son has now come of age and all indications are that he is likely to take over the reins of the entertainment conglomerate his father, the chairman of Zee TV, built.

    According to insiders, Punit‘s management initiatives and style have impressed Chandra greatly and he is looking at hanging up his corporate boots in a couple of years and focus on his social responsibilities.

    Punit was hoicked into the MD‘s role at Zee Entertainment Enterprises Ltd (Zeel), giving him total operational responsibility for the Zee Network which includes a Top 3 Hindi GEC, Zee TV, and a clutch of popular channels including Zee Cinema. And he did leave his stamp. First, he yanked the six regional general entertainment channels (R-GECs) from ZNL into the Zeel fold. Then he merged the ETC Networks channels (ETC Music and ETC Punjabi) into the company he heads. He hived off the education business, and started playing an active role in the news business by becoming a non-executive director of Zee News Ltd.

    The year also saw him buying out Ten Sports from Taj Television after some hard nosed negotiation, even as his father‘s loss making T-20 format – the Indian Cricket League – ran out of steam following a backlash from the Indian cricket board and IPL Commissioner Lalit Modi.

    His major successful play was on the Hindi GEC front. Zee TV was under attack from a hungry for leadership Colors and an extremely defensive leader Star Plus. Goenka took a decision not to splurge to buy GRPs. While the other two forked out top dollar on big movies and big ticket celebrity driven reality and formatted shows, he along with his team of Nitin Vaidya (COO -national channels and Zee TV business head) and programming head (Ajay Balwankar, now in Sony Entertainment television), focused on traditional soaps and low cost formats. Pavitra Rishta, Agle Janam Mohe Bitiya Hi Kijo, Chhotti Bahu, Dance India Dance (an adaptation of Bangla dance reality show Dance bangle Dance) were his ripostes which helped the channel generate GRPs. So much so that it took up the No 1 spot in week 34 with 281 GRPs. Zee TV began the year with 190 GRPs.

    Though No 2 or No 3 today in terms of GRPs, the channel today is No 1 in terms of monetizable GRPs, a statement with which even the top bosses at Star Plus and Colors will concur.

    His staff acknowledges the fact that Punit is very easily accessible and always encourages new ideas. With that kind of zeal, it is no wonder that his father thinks Zeel is in good hands.

    Kalanithi Maran
    Kalanithi Maran proved yet again how he could cruise along in a year of global economic storm while the other media barons were scaling back their expansion plans. Far from groaning under financial woes, he searched for new growth.

    And the architect of the Sun TV empire found them in the areas of DTH, TV broadcasting and FM radio.

    Sun Direct is the fastest growing DTH company with a subscriber base of 5 million. Built on mass pricing, the business model is to grab market share while waiting for opportunities to lift ARPUs (average revenue per user) that stayed below Rs 100 in 2009.

    Critics say Sun Direct is leaning heavily on subscribers from the four southern states and predatory pricing can‘t be sustainable. But certain facts stay formidable in Maran‘s favour. His DTH company has the lowest losses on a per subscriber ratio, possibly because of hard bargaining to stay away from minimum guarantee deals with broadcasters.

    Also, Sun Direct has 80 per cent of its customers from the south, a rock-solid base that would provide him economies of scale as he starts scratching into the other markets where he doesn‘t have a distinct advantage.

    In the TV broadcasting arena, as the industry reeled under an advertising slump, Maran posted a robust revenue growth of 35 per cent. He fortified his position and launched two kids and a comedy channel during the course of the year, blocking out possible gaps in the marketplace.

    A master strategist, Maran believes that viewer tastes change every 3-4 years. He introduced a big-ticket weekend non-fiction programming based on the international format show Deal or No Deal that not only gave him viewership but also revenue spikes. The show ran across Maran‘s flagship general entertainment channels: Sun TV (Tamil), Gemini (Telugu), Surya (Malayalam) and Udaya (Kannada).

    Sun has emerged as one of the leading FM radio broadcasters, setting up a pan India presence. In 2009, Sun brought its FM radio stations outside Tamil Nadu and Pondicherry under the Red FM umbrella, offering advertisers a wider listener base and an opportunity to capitalise on a unifying programme format across key cities.

    Since the summer of 2009, Maran also corrected a single deficiency in his rapidly-growing media empire: He widened the talent pool, making a series of senior appointments including Ajay Vidyasagar as CEO and Ravi Menon as programming head.

    So what does the roadmap look like for Sun in 2010? Maran is tapping subscription revenues more aggressively, has floated a UK subsidiary to accelerate international revenues, hiked advertising rates after a gap of two years, and is readying the release of the mega-budget movie Enthiran. Looks like another blockbuster year for the man who rules the southern media landscape.

    Man Jit Singh

    His is a radical turnaround story. When he took charge of Multi Screen Media Ltd (the company that runs Sony Entertainment Television), Man Jit Singh had several tasks to handle. CEO Kunal Dasgupta had left suddenly in the first quarter of 2009, his flagship channel Sony was doddering around in the doldrums with sinking ratings, morale was low and the organisation had few clues as to how they could deal with the rapidly changing dynamics of the GEC business. Newcomer NDTV Imagine had beaten it to the No 4 slot, a far cry from its heydays when Sony was scrapping for the No. 1 slot in the early part of this decade.

    As interim CEO, Singh took the bit in his teeth, lopped off 50 staff, letting go off channel head Albert Almeida. He initially focused on seeing through a successful IPL as the network had invested for its channel Max while acquiring the rights for the cricket extravaganza. In the reworked deal, BCCI sold the nine-year rights for Rs 82 billion, parceling out the India

    That out of the way, he began the hunt for someone who would take up the corner office as CEO, apart from launching a new prime time programming band along with COO NP Singh and programming head Gurdeep Bhangoo The search for a CEO proved futile as did the new lot of programmes. He aborted both – hoisting himself into the CEO‘s seat and started scouting for a channel head. He found one in Ajit Thakur

    The programming was rejigged and a low cost idea plumped for: telecast reruns of its long running award-winning and successful thriller and horror fictional shows, CID and Aahat. In the meantime, a new programming head was appointed: Ajay Bhalwankar was brought in from Zee TV.

    In no time at all, the ratings shot up and Sony had got back into the reckoning, toppling NDTV Imagine from the No 4 slot. From 70 gross rating points Sony was clocking 170-190 GRPs, ahead of Imagine and close enough to possibly play catch up with Zee TV and Star Plus which were generating between 240-270 GRPs. The channel garnered almost two and half times more ratings within six months of the revamp.

    Along with his team, Singh sewed an exclusive content agreement with leading film production house YRF for a programming block which would help differentiate it from the regular fare. While the initiative generated a lot of hype, it did not generate the mass TRPs that were expected.

    For Singh, 2010 will be a crucial year with IPL 3 on it way in the next two months. Also, a rejuvenated and cash loaded NDTV Imagine (following the Turner deal) is definitely going to make a serious and concerted effort to reclaim its fourth place in the Hind general entertainment space.

    Steve Marcopoto
    2009 was Turner‘s fifteenth anniversary of operating in India. And 2009 was the year when the network clearly signaled that it was no longer satisfied in having a minor league play in India. In the first part of the year, it announced that it was launching WB Channel expanding its presence in the English entertainment channel space. In the second half of the year, Turner announced that it was pitching its tent in the rough Hindi general entertainment channel space. And leading Turner‘s charge into the big stake game was Turner Broadcasting System APAC head Steve Marcopoto.

    Marcopoto winged his way into the country on several occasions before he signed on the dotted line of a deal which resulted in Turner acquiring a 92 per cent stake in NDTV Imagine for $117 million. It took months of negotiation between the NDTV management and him and his team before a deal was hammered into shape. And it surely was a moment of triumph for him, making him one of the key media executives in India.

    For years, Turner has operated in India through channels such as CNN, Cartoon Network, Pogo and through a distribution joint venture with Zee TV, labeled Zee Turner.

    It has maintained its leadership position in the kids‘ segment with Cartoon Network and Pogo, currently ranked No. 1 and 2 respectively on an all-India basis. Growth has been steady and India revenues account for 25 per cent of its regional operations, making it Turner‘s largest and fastest growing market.

    During the year, Marcopoto persisted with the Turner mission to further develop the Indian animation industry. Along with Pogo and Cartoon Network India head Monica Tata and creative director Vishnu Athreya, he made various acquisitions, co-creations and initiatives such as Snaptoons (Short New Asia Pacific Cartoons), bringing the pre-school series Sesame Street to India in a local avatar – Galli Galli Sim Sim and nurturing one of the most successful homegrown, animated heroes – Chhota Bheem, amongst others.

    2010 will come with its set of challenges: he has to ensure a smooth transition of Imagine into the Turner fold, and work closely with CEO Sameer Nair to draw up strategies to make the investment pay off in the medium-to-long term. Marcopoto will also have to create compelling content and build the Turner brands across every possible platform, including TV, online, merchandising and mobile.

    Lalit Modi
    To say that Lalit Modi had an eventful year is an understatement. This year he showed his ability to turn a challenge into an opportunity while taking steps to make the IPL a global brand. He shrewdly renegotiated the IPL TV deal with Multi Screen Media in a fresh deal valued at Rs 82 billion ($1.6 billion).

    The earlier ten-year contract, which Sony couldn‘t protect, was worth $918 million for telecast and $108 million for promotion of the tournament. Then the IPL was forced to relocate to South Africa due to the elections. Undaunted by the challenge, Modi and his team worked around the clock at short notice and pulled off a success, thus silencing naysayers. With this move, the IPL took its first steps towards becoming a global brand.

    Modi‘s clout lies in bringing in the money while expanding the reach of the IPL. A deal was done for theatrical rights with Dar Capital and is worth Rs 3.3 billion. It is a known fact that cinema receipts suffer when the IPL is on. The message from Modi is clear – If you cannot beat us, join us.
    In 2009 Modi also announced a base price of $225 million for the two new IPL franchises who will come in later this year. This is more than double what the highest franchise paid in 2008. This gives an idea of just how much the IPL has grown in value in a short space of time.

    It is this ability of Modi to run a steady ship while raking in the moolah no matter what obstacles there are which made BCCI president Sharad Pawar throw his weight behind him when the IMG contract was cancelled by N Srinivasan. The contract was eventually re-negotiated.

    While there is a faction within the BCCI that would like to see Modi out, the fact is that he will head the IPL till 2012. Even BCCI members who have issues with Modi admit that they need him. Modi is effecting changes that are rapidly changing the perception of the game by stakeholders.

    Apart from the IPL, Modi also managed to get the Champions Twenty20 League off the ground. He formed a partnership with Cricket Australia and Cricket South Africa for this. The TV deals done by ESPN Star Sports saw cricket reach more countries than ever before in Europe and other territories. While the ratings in India were not great, one can expect Modi to come up with more innovations.

    In 2009 Modi also took up the issue of piracy on a war footing. Under his guidance an association in conjunction with the cricket boards of England, South Africa and Australia was formed. This move has the backing of the ICC and is the first time that sports broadcasters and stakeholders are making a concerted effort to fight this problem.

    In 2010 Modi is showing no signs of slowing down. The deal with YouTube this year could change the face of sports broadcasting in the years to come. And with the commercial success of the IPL, Modi is thinking in terms of spreading the global reach of the game. He has already hinted that the US may be the next frontier and is in that country at the moment. The aim is to possibly do an event within the next 18 months.

    Dr Prannoy Roy

    At the beginning of 2009, Prannoy Roy looked an extremely worried man. The psephologist turned hardcore newsman had got himself into a corner. Two of his diversifications were burning up cash and how, scorching the main mother news network.

    The first was a general entertainment joint venture channel NDTV Imagine with US major studio NBC Universal. The second was his lifestyle programming forays into NDTV Lifestyle. Roy had launched these services earlier when the times were good, and revenues were in full flow, but with the economic downturn he was being battered. It was imperative that something be done.

    The economics doctorate from the Delhi School of Economics decided to take the battle to the frontlines along with his senior management team spearheaded by KVL Narayan Rao. Get rid of the diversifications and focus on your core competence – news – became the mantra. Along with the senior team and investment bankers, he spent a large part of the first part of the year scouting for buyers for his non-news verticals.

    The other focus of the team was: reduce the group‘s high interest burden which had come its way courtesy its need for cash for its diversifications. He bought back NBC Universal‘s 26 per cent indirect stake in NDTV Networks Plc. The company‘s $100 million step up coupon bonds due 2012 were bought for $72.4 million. This drastically lowered its borrowings and concomitant high interest bill. NDTV was also freed from the undertaking to provide a $40 million guarantee to the bond-holders.

    He also shut down a local news channel he had started in Metro Nation Delhi, cutting down costs.

    NDTV Lifestyle was put on the auction block and around Diwali, he managed to find a buyer for it. The US-based Scripps Networks Interactive bought up 69 per cent of the company on a fully diluted basis for $55 million, in what was seen as an extremely profitable sale.

    Then just as the year was ending he unveiled his final coup de grace: he found a buyer for the hungry for cash NDTV Imagine. Turner Asia Pacific Ventures bought out 92 per cent of NDTV‘s stake in Imagine for $67 million, while investing in fresh equity in the company to the tune of $50 million, bringing up the value of the transaction to $117 million.

    The moves were lauded by all media watchers and the company‘s bottomline started showing improvement.

    And Prannoy ended the year with a beaming smile on his face. Yes, the network still has its work cut out for it. But the comeback has begun.

    Harish Thawani
    This year this street smart maverick renewed the deal with the BCCI with his company Nimbus for another four years till 2014 in a deal worth Rs 20 billion, thus ensuring stability. Thawani has asserted in interviews that the payout per match is similar. Of course, the deal does not include new media.

    Thawani also maintains that rationalisation was bound to happen with the economic environment. He insists that everybody in a deal has to benefit and that the days of bids reaching stratospheric levels are gone. The fact that the BCCI did not bother to go through a tender for the rights, as Nimbus had the first right of negotiation, shows that Thawani got his calculations right in terms of what these rights are worth. After all, the BCCI would have conducted some talks with other sports broadcasters to find out if they were willing to pay more.

    Thawani is known for being proactive in terms of deals being done. He asserts that the company got a 10 per cent discount on the earlier deal on account of the mandatory feed sharing act being passed. Even not going for the new media rights this time around was a deliberate strategy. Highlights and clips got more traffic than live streaming under the old deal. Therefore for him it was not a cost effective proposition.

    Last year Nimbus had complained to the BCCI in a letter about the quality of facilities for broadcasting which forced cricket‘s richest body to take action. Thawani is also said to have been a strong force behind the BCCI instituting the Corporate Trophy.

    On the distribution front, it is expected that Neo would have doubled its revenue for 2009. This is creditable given that Neo had to do the distribution on its own after the deal with Star went sour a couple of years back.

    Moreover the channel‘s audience deliveries have been better than the competition‘s at times as was seen with the India versus Sri Lanka series. Neo Cricket now claims to have finished as the top sports channel for two years in a row. Overseas, Neo Cricket bolstered its presence with several deals last year and is now present in 25 countries including Japan, Korea, Singapore.

    Thawani, though, is looking beyond just cricket. He has plans for two new channels in the lifestyle and film genres. And, yes, the IPO could be round the corner.

     

  • IPL lived up to the hype

     
    IPL lived up to the hype
     

    Still hung over. That is what many of those directly involved in putting together the greatest pop cricket spectacle ever staged are still feeling even a week after the first edition of the Indian Premier League (IPL) championship came to its heady climax.

    The biggest cricket show on earth more than lived up to the expectations of those who invested in it. The public took to it, the corporates were sold on it, telecaster Sony hit pay dirt and the key individual behind it all – IPL chairman and commissioner Lalit Modi -won the grudging admiration of even his worst detractors. The fact that the event created a $2 billion market without a ball being bowled has been simply amazing.

    Realms have already been written on how the perfectly packaged blend of highly competitive sport, merged with heady doses of ‘celebrity and entertainment masala‘, had the cinema, television and retail industries collectively reeling.

    And the hype that was emanating out of India had its ripple effect across the globe. One could argue that it is linked to the fact that the Indian economy is increasingly being written and spoken about in the global press, but it is no small matter that virtually every big international publication did in-depth stories on the IPL speaks for itself. In Australia a million people watched the first match although it was past midnight there. UK‘s Setanta declared that its subscriber base has risen between 17-20 per cent on the back of the IPL. These are just some of the heady stats that the IPL has thrown up.

    Read on for a reality check on the IPL from the point of view of the four key constituents – Sony, team owners, BCCI and the public.

    Sony home safe and dry:

    Ratings were what Sony was tracking and they held up throughout, delivering above expectations more often than not.


    Click for complete data

    Before the IPL started there was scepticism about how the event would fare. Even when the event initially delivered strong numbers there were doubts on whether the momentum could be sustained. Naysayers carped that the novelty might wear off, Australian players leaving would prove to be a dampener, etc.

    This data though should silence them. Tam data c&s 4+ all India shows that the IPL managed to achieve an average of 4.7 over 57 matches on Max. This shows that viewer interest did not flag. The opening match between Kolkata and Bangalore got the highest rating of 7.19. Next came a crucial match between Chennai and Mumbai which managed a rating of 6.58. A match between Kolkata and Delhi as the race for the semi final spots hot up managed a rating of 6.27. Both the semi finals also got ratings of over 6.

    This though, is less than half of the ratings that the semi final and final of the T20 World Cup got. India‘s semi final against Australia managed to get a rating of 13.4 while the dream final against Pakistan managed an astronomical 15.9. What this shows therefore, is that there is still plenty of room for improvement as far as the IPL is concerned.

    An average of 31 million people tuned in for each of the IPL semi finals. The figure is the same as that for the 2007 World Cup final that was played between Australia and Sri Lanka. One must keep in mind though that the World Cup also aired on DD. For the T20 World Cup final on ESPN, the reach figure was 48 million. IPL reached 99 million viewers throughout its duration.

    It is also pertinent to note that the importance of matches also played a role in the IPL ratings. For instance Mumbai‘s last match against Bangalore only got a rating of 2.13. This was because the Reliance owned franchise was out of semi final contention by then.

    The kind of ratings numbers that the IPL has delivered for Sony also means that it is ahead of the curve on its revenue targets as well.

    Of the first year payout commitment of the $ 59 million to the BCCI for telecast rights, Sony‘s share was $ 55 million. Sony had built in a $ 4 million shortfall in the first year into its calculations. That seems to have changed with Sony president network sales, licensing and telephony Rohit Gupta expressing confidence that the network will at least be on break-even point once final calculations have been done. This is largely on the back of the huge response the event got from the viewing public. After its main inventory was sold out, the channel was able to jack up rates for the 200 seconds that it had in the bank for each match. “For the semi finals and final we sold at Rs 8-10 lakhs per 10 seconds. We have set a benchmark pricing for the second season,” asserts Gupta.

    That assertion only reinforces the confidence Set India CEO Kunal Dasgupta essayed in an interaction with Indiantelevision.com before the IPL kicked off when he stated, “In the first five years we will make $100 million in profit. In the next five we will make half a billion. My ad sales will treble after five years.”

    Team owners ahead of delivery curve:

    For this year, the average expenditure per franchisee, according to Indian television.com calculations, was $ 17.5 million (the least being Jaipur‘s Rajasthan Royals at $ 15 million and the most being liquor tycoon Vijay Mallya‘s Bangalore Royal Challengers at $ 20 million). Considering that most team owners began this exercise factoring in the possibility of having to take a hit of anywhere between $ 3-7.5 million hit in Year 1, all of them (bar one) would be more than satisfied with what they have managed and the response the IPL has garnered thus far.

    As of now, and depending on who you talk to, it is either Kolkata or Chennai that have likely hit break-even.

    Kolkata was far and away the best managed as far as brand associations and merchandise sales were concerned but it was Chennai that was the most successful in terms of gate receipts.

    Breaking down the numbers, GroupM ESP (consultants for Hyderabad‘s Deccan Chargers) managing partner Hiren Pandit states: “The franchises have received around $ 7.5 million from central revenues. In terms of local revenues (prize money, local sponsorship, gate receipts) Kolkata would have earned the most at $ 11 million while Punjab would have got the least at $ 5 million. Where Kolkata did really well was in sponsorship where it got $ 7 million.

    “Bangalore would not have made much here as the UB Group was using it to push their own brands. In terms of losses I estimate that Bangalore lost around $ 10 million.” This loss, Pandit, is quick to point out, needs to be weighed against the kind of brand activation opportunities that will be available to the UB Group, going forward.

    As for the smaller teams like Punjab and Jaipur, they would have struggled the most on both brand associations as well as gate receipts (as their grounds are small).

    Public are loving it:

    The response in the stadia was what no one was sure about, but by all accounts it has proved a big hit all across, even in the smaller centres.

    Interestingly, it was Mumbai that had to go the furthest in its efforts to attract crowds. Why is that? Because Mumbaiites are the most spoilt for choice, in terms of avenues for entertainment. Additionally, commute times are the longest in Mumbai so for potential ticket buyers, logistics also plays a big part.

    A stadium like Hyderabad on the other hand, gets to host a One Day International once in two years, if it is lucky. The IPL more than anything else is offering access to a whole new form of entertainment and the public is lapping it up.

    What will clearly not work for any team though, is the traveling fan concept. Home games means just that – home games. India‘s geography simply does not allow for fans to travel with their teams.

    The Future:

    So what next for the IPL? Where does it go from here? At this stage it is all more talk than concrete plans but the intention is clearly to take the IPL global.

    IPL governing council member IS Bindra, has been quoted as saying that the IPL is just the first step of a “grand vision” that will eventually lead to the birth of a network of similar franchise-based models across the major cricket-playing nations. That is something that WSG South Asia CEO Venu Nair endorses wholeheartedly. Going forward, Nair is in favour of cricket going the soccer route. In soccer, leagues are more important than countries. “Cricket should follow the same route to survive. At the moment you have some events like the Champions Trophy, which are useless.”

    “You could (instead) have a World Cup preferably in the T20 format once in four years. The rest of the time league cricket could be played in different countries. What this would mean though is that other countries would have to set up strong leagues of their own. This would ensure that all the boards make money, which could then be used for the development of the game.. At the same time players would benefit, as financially there would be no need for most of them to play for more than five years. The current theory that one needs a 15 year career is outmoded. The ICC‘s role would still be to govern the game. Nobody loses out.”

    An issue that franchisees will have to look at is to build loyalty among fans for a set of players. Another key thing for franchisees is gate receipts. Nair feels that more attention has to be paid to premium seating. “Abroad premium seating accounts for 40 per cent of gate revenue. At the moment though, only Chennai, Jaipur and Punjab have adequate facilities for premium seating. The rest of the franchisees will have to invest in this along with the state associations. The lack of adequate facilities and a high quality experience for those in the premium seating area is why Reliance reduced prices for the semi finals in Mumbai.”

    In conclusion, whatever may be the postmortems different agencies engage in now that the event is done and dusted, it would be difficult to argue that any of the parties that chose to be associated with the event did not get more than their money‘s worth.

    Team owners ahead of delivery curve:

    For this year, the average expenditure per franchisee, according to Indian television.com calculations, was $ 17.5 million (the least being Jaipur’s Rajasthan Royals at $ 15 million and the most being liquor tycoon Vijay Mallya’s Bangalore Royal Challengers at $ 20 million). Considering that most team owners began this exercise factoring in the possibility of having to take a hit of anywhere between $ 3-7.5 million hit in Year 1, all of them (bar one) would be more than satisfied with what they have managed and the response the IPL has garnered thus far.

    As of now, and depending on who you talk to, it is either Kolkata or Chennai that have likely hit break-even.

    Kolkata was far and away the best managed as far as brand associations and merchandise sales were concerned but it was Chennai that was the most successful in terms of gate receipts.

    Breaking down the numbers, GroupM ESP (consultants for Hyderabad’s Deccan Chargers) managing partner Hiren Pandit states: “The franchises have received around $ 7.5 million from central revenues. In terms of local revenues (prize money, local sponsorship, gate receipts) Kolkata would have earned the most at $ 11 million while Punjab would have got the least at $ 5 million. Where Kolkata did really well was in sponsorship where it got $ 7 million.

    “Bangalore would not have made much here as the UB Group was using it to push their own brands. In terms of losses I estimate that Bangalore lost around $ 10 million.” This loss, Pandit, is quick to point out, needs to be weighed against the kind of brand activation opportunities that will be available to the UB Group, going forward.

    As for the smaller teams like Punjab and Jaipur, they would have struggled the most on both brand associations as well as gate receipts (as their grounds are small).

    Public are loving it:

    The response in the stadia was what no one was sure about, but by all accounts it has proved a big hit all across, even in the smaller centres. 

    Interestingly, it was Mumbai that had to go the furthest in its efforts to attract crowds. Why is that? Because Mumbaiites are the most spoilt for choice, in terms of avenues for entertainment. Additionally, commute times are the longest in Mumbai so for potential ticket buyers, logistics also plays a big part.

    A stadium like Hyderabad on the other hand, gets to host a One Day International once in two years, if it is lucky. The IPL more than anything else is offering access to a whole new form of entertainment and the public is lapping it up.

    What will clearly not work for any team though, is the traveling fan concept. Home games means just that – home games. India’s geography simply does not allow for fans to travel with their teams.

    The Future:

    So what next for the IPL? Where does it go from here? At this stage it is all more talk than concrete plans but the intention is clearly to take the IPL global.

    IPL governing council member IS Bindra, has been quoted as saying that the IPL is just the first step of a “grand vision” that will eventually lead to the birth of a network of similar franchise-based models across the major cricket-playing nations. That is something that WSG South Asia CEO Venu Nair endorses wholeheartedly. Going forward, Nair is in favour of cricket going the soccer route. In soccer, leagues are more important than countries. “Cricket should follow the same route to survive. At the moment you have some events like the Champions Trophy, which are useless.”

    “You could (instead) have a World Cup preferably in the T20 format once in four years. The rest of the time league cricket could be played in different countries. What this would mean though is that other countries would have to set up strong leagues of their own. This would ensure that all the boards make money, which could then be used for the development of the game.. At the same time players would benefit, as financially there would be no need for most of them to play for more than five years. The current theory that one needs a 15 year career is outmoded. The ICC’s role would still be to govern the game. Nobody loses out.”

    An issue that franchisees will have to look at is to build loyalty among fans for a set of players. Another key thing for franchisees is gate receipts. Nair feels that more attention has to be paid to premium seating. “Abroad premium seating accounts for 40 per cent of gate revenue. At the moment though, only Chennai, Jaipur and Punjab have adequate facilities for premium seating. The rest of the franchisees will have to invest in this along with the state associations. The lack of adequate facilities and a high quality experience for those in the premium seating area is why Reliance reduced prices for the semi finals in Mumbai.”

    In conclusion, whatever may be the postmortems different agencies engage in now that the event is done and dusted, it would be difficult to argue that any of the parties that chose to be associated with the event did not get more than their money’s worth.

    (Graphics and design by Kavita Sangoi)

    Also Read:

    Sony reaps IPL rewards for innovation, concerted effort

    Indiantelevision.com’s interview with GroupM ESP managing partner Hiren Pandit

  • Hindi GECs take a beating from IPL

    The Indian Premier League onslaught is beginning to hurt Hindi general entertainment channels.  With an average TVR of 5 (Tam data for week ended 26 April, All India, C&S 4 +), the heat is now on for the GECs to retain its prime time viewership.

    Star Plus and Sony have lost a chunk of their audiences, while Zee TV has made up with a focus on afternoon programming. NDTV Imagine is looking more battered at this stage while 9X has marched ahead to occupy the third spot.

    Sample this: Kyunki … which was enjoying a TVR of 5.3 in week 15 (week ended 12 April) fell to 4.18 TRP on week ended 26 April (when IPL was on for the whole week).

    Kahani… slipped from 4.36 TVR (week 15) to below 3 in week 17. And when Star Plus launched its high voltage Shah Rukh Khan show Kya Aap Paanchvi Pass Se Tez Hain? on 25 April, it fetched a TVR 4.61 which could, perhaps, have soared higher.

    Star‘s Bidaai, one of the top five shows in the Hindi GEC, has lost considerable TVRs to fall on 4.41 (week 17) from a high of 5.5 (week 15).

    Zee‘s Saath Phere fell from 4.76 (week 15) to 3.96 (week 17) while Kasam Se touched 3.3 (week 17) from 3.92 (week 15).

    Zee TV business head Tarun Mehra says, “All the GECs have lost viewers to the IPL matches. However, all the channels were prepared for a general beating on the score card”.

    Market leader Star Plus with 345 GRPs in week 15, fell to 297 GRPs in week 16. In week 17, Star Plus managed 300 GRPs (even after the launch of Panchvi…).

    Star Plus VP marketing and communication Prem Kamath says, “Definitely IPL has had its effect on GECs. However, the space is very unpredictable. So you might see a different story next week. A week or two‘s data does not give the full picture.”

    Despite IPL matches, Zee TV has grown in terms of GRPs. From 212 GRPs in week 15, it has increased to 218 GRPs (week 16). And in week 17, it finished with a high of 220 GRPs, standing second to Star Plus.

    HSM GRPs
    Channel WK 15 Wk 16 Wk 17
    Star Plus 345 297 300
    Zee TV 212 218 220
    9X 77 72 80
    NDTV Imagine 88 92 79
    Sony Entertainment TV 84 79 68
    Sahara One 68 63 63
    Star One 66 54 60
    DD1 40 34 34
    Star Utsav 36 35 32
    SAB 35 32 31
    Zee Next 10 9 10
    Source: TAM Peoplemeter System TG: CS 4+

    So how has Zee TV managed to weather the storm? Says Mehra, “No doubt IPL has eaten GECs viewers in the prime time slot. But instead of concentrating on the prime time, we are focusing on the afternoon programming and movies.”

    To combat IPL match ratings, Zee TV has pumped up its weekends with a special attention on the afternoon programming. During the week ended 26 April, Zee TV has shown the movie Vivaah which fetched a TVR of 3.29. It has also launched a TV series Vivaah at 7 pm and 11 pm (week days), besides an hour-long episode of Nagiin… and a special episode of Banoo Main Tere Dulhann.

    Zee TV is also planning to strengthen its line up. The channel will launch a new crime series Hadsaa on weekends. Besides it is pumping up the weekends with special events like Zee Cine Awards and Idea Rocks.

    A few rungs down the line, NDTV Imagine (79 GRPs) lost its third spot to 9X with 80 GRPs.

    While sibling channel Max has hogged all the limelight with the telecast of the IPL matches, Sony has plunged from 84 GRPs in week 15 to only 68 GRPs in week 17.

    “We have got affected marginally but as a network we have grown phenomenally,” says Sony Entertainment television creative head Sanjay Upadhyay.

    Sony, in fact, is trying to use the IPL hype to promote its new show launches. Reality shows like Waar Pariwaar, Naye Roop Nayi Zindagi and Yeh Shaam Mastaani were unveiled during the IPL time.

    Explains Upadhyay, “We are building up these shows around IPL. One should also not forget that IPL is a short term event and after it is over we expect our shows to pick up. Apart from that a lot of cross channel promotions are happening on both Max and Sony.”

    Soon after IPL gets over, Sony will place its big ticket reality show Dus Ka Dum with Salman Khan as host at prime time to mop up audiences that have deserted the channel.

    A similar tale follows the other GECs. From 68 GRPs (week 15), Sahara One fell to 63 GRPs (week17) while Star One dipped from 66 GRPs (week 15) to 60 GRPs (week17).

    A micro look into the IPL ratings on weekdays

    The IPL is holding firm in terms of viewership even on weekdays.

    Tam data C&S 4+ shows that matches played from Sunday 20 April to Saturday 26 April have managed an average TVR of 5.

    In fact the match between Chennai Super Kings and Mumbai Indians which took place on 23 April and went down to the wire nearly touched a TVR of 6.

    The contest between Chennai Super Kings and Kolkata Knight Riders on 26 April fetched the lowest ratings during the week with a TVR of 3.6.

    Not surprisingly the crucial match between Mumbai and Bangalore on 20 April touched a TVR of 5.9. The match between Rajasthan Royals and Deccan Chargers that took place on Thursday had a TVR of 5.5.

    In Gujarat where IPL has fared the best, the matches averaged a TVR of 7.14 while in Andhra Pradesh where IPL has not done well the matches managed a TVR of 2.77.

    Tam also did an analysis on the visibility that the teams got through their TV promos in the month before the IPL kicked off.

    From 18 March to 17 April the Kolkata Knight Riders had 46 per cent of promo time and got 41 per cent of GRPs. The Mumbai Indians had 33 per cent of promo time but their GRP contribution was only 19 per cent.

    The Decan Chargers, on the other hand, had only 10 per cent of promo time but GRPs delivered were 22 per cent.

    Women continue to be interested in big cricket but their share has come down slightly. During the 2003 World Cup women contributed 41 per cent of viewership. This came down to 38 per cent for last year‘s World Cup. For IPL, women contribute 36 per cent of viewership.

    The audience age profile has been consistent over the years. For the 2003 World Cup, the 35+ age group contributed 39 per cent to viewership. For the IPL it has contributed 38 per cent.

    Growth, however, has come for the 15-24-year-olds. Their share in viewership has grown from 21 per cent for the 2003 World Cup to 27 per cent for the IPL. Observers attribute this to the fast-paced nature of T20.

    Tam data also shows that city loyalty has already set in. During the first match, Kolkata viewers increased their interest in the match right till the end of the contest despite knowing in the early stages that their team was going to win.

    Bangalore, on the other hand, started losing interest as the match proceeded towards the finish line. The other four metros, more or less, maintained the same amount of interest in the match right till the end.

    Tam also explains that matches that feature top quality sides will always draw the most viewership. Fans will watch their side more when they play a top side.

  • NBA threatens TV blackout for IPL from midnight

    NBA threatens TV blackout for IPL from midnight

    NEW DELHI: The News Broadcasters Association has decided that it will blackout all news on the Indian Premier League (IPL) from midnight tonight as the League officials have not reacted to their demand for giving news clips free of cost, sources in NBA told indiantelevision.com.

    When contacted IPL chairman and commissioner Lalit Modi said: “NBA is not my problem, talk to Rohit Gupta at Sony. He is dealing with this.”

    But Gupta could not be contacted. Rajiv Shukla’s mobile was switched off.

    The News Broadcasters Association has issued a warning to the Indian Premier League that unless it reconsiders its prices for news coverage and concedes the NBA demands within business hours today, it will take “concrete action.”

    The warning ended around 6 pm this evening. Though NBA did not want to offer details on what “concrete action” implied, IPL sources told Indiantelevision.com earlier in the day that they have already warned of boycotting the event, which means a possible news black out on the electronic media.

    All the top brass of the electronic media met last evening to come to a decision on this.

  • IPL is the name of the game

    Three decades after Kerry Packer revolutionised cricket with the World Series, cricket stands on the threshold of another potentially disruptive revolution. On 18 April, the Board of Control for Cricket in India (BCCI) will unveil the Indian Premier League (IPL), a format the Indian board hopes will change the way Indians watch the game.

    Instead of cheering the country, one will cheer city-based leagues. Eight teams – Jaipur, Mumbai, Mohali, Chennai, Hyderabad, Kolkata, Bangalore and Delhi – will take the field.

    Can this work? The answer is yes if one looks at the experience of the first mover in India – Essel Group’s Indian Cricket League. The ICL is currently holding its second event and is getting good visibility as matches are also being aired on Ten Sports. The on-ground attendance has also been decent, showing that if an event is well marketed there is scope. Considering that ICL has managed all this in the face of a take-no-prisoners onslaught by the Indian cricket board, what the officially sanctioned event might well deliver boggles the mind.

    One must also note at the outset that IPL and ICL are possible because of the success of the T20 format. Initially there was some cynicism even within the BCCI as to how the new format would fare. The T20 World Cup, though, changed all that. With India winning, the viewership grew and the final scored a ratings of 9.81 TVR (Tam data, C&S 4+).

    Broaden the game’s appeal: The aim of the IPL is to broaden the appeal of the game. Since matches will take place in the evening, the hope is that families including women and children will turn up in large numbers.

    The IPL has also brought corporates closer to the game. Companies like Reliance Industries now own a team. This is expected to inject professionalism and also entrepreneurship. The larger aim is to push cricket at the grassroots and domestic level.

    The IPL is conceived as a city-based league format. With the base price set at $50 million for the city-based franchisees, the teams were bought for well above that.

    The prices paid show that after a lot of due diligence, corporate India views the IPL as being a serious business venture. Reliance Industries, for instance, paid $111.9 for Mumbai while Dr Vijay Mallya’s UB Group shelled out $111.6 million for Bangalore.

    The IPL will have flair and flamboyance when you consider that Bollywood also got into the act. Shah Rukh Khan paid $75.09 million for Kolkata. Preity Zinta took Mohali for $76 million. On the other side, we have Emerging Media, an expert in organising sport, paying $67 million for Jaipur.

    The broadcaster’s viewpoint: The BCCI hit the jackpot when the Sony-WSG combine bought the ten-year broadcast rights to the IPL for $918 million. Compared to this, the price that ESPN Star Sports (ESS) paid for ICC rights looks like a good bargain.

    While many have questioned the financial wisdom of such a huge payout for an as yet untried format, the numbers do not look quite so daunting when the fine print of the deal is examined. The guaranteed payout commitment by Sony-WSG is $306 million for the first five years. The remaining $612 million, to be paid out in the second half of the deal, comes with an exit clause built in.

    Sony president network sales, licensing and telephony Rohit Gupta is gung ho about the IPL, noting that T20 is the game’s future. “If you see the scene for the last four years, ratings for ODIs have been steadily falling. T20 brought the game back in a big way. The stickiness is far higher than it is for the other forms of the game.”

    Marketing is of paramount importance: The main challenge for IPL is for the franchises to build up fan clubs. After all, Indians are not used to cheering at a local level. As Gupta notes, the key challenge for each of the franchisees is getting fans of that state to identify with the team.

    The first step in that direction was to have names that reflect the city. So Emerging Media christened the Jaipur team as Rajasthan Royals. The aim is to convey the pomp and regal splendour of the city.

    Reliance has called their team Mumbai Indians to show the character of this city. They, like the other franchises, will run a 360-degree marketing initiative with a strong local flavour.

    Glamour is also an important quotient in the marketing strategy. Cricket and Bollywood are two religions in India. Mix them and the result is potent. For instance, Bangalore has roped in actresses Katrina Kaif and Deepika Padukone for a music video to promote their Royal Challengers.

    A push for domestic talent: One of the great things about the IPL is that it gives youngsters the chance to prove themselves. At the second auction, a draft for the Under 19 was held. This was to ensure that in a few years time India will have a young talent pool who are experts in this format of the game.

    RoI: There are several revenue streams available for franchisees. There are central revenue streams, which include a share of the TV rights. The franchisees will get 80 per cent of TV revenues in the first five years and 60 per cent from the next five. They will also get 60 per cent of sponsorship revenues. The franchisees get all local revenues.

    The revenue will come from many sources including gate revenues, franchisee shirt sponsorship, local sponsorship, licensing programme and uniform merchandising.

    Reliance and Emerging Media are looking at a three-year time frame to break even. If, however, the IPL takes off, then that period could be sooner.

    Gupta adds that corporate involvement is the best thing that could have happened. “Now you will see more accountability from the players. If a corporate house has paid over a million dollars for Dhoni, then he better perform. It can no longer be a case of doing well in one match and taking it easy for the next three.”

    Performance is key in brand perception and each franchise will be doing its utmost to ensure that perception is not hurt by a lack of on-field performance.

    Infrastructure will get a boost: Corporates will back infrastructure creation like academies and training camps since these are the places where talent will bloom.

    Mindshare’s Hiren Pandit says that Deccan Chronicle is looking at grassroots activities. There are plans to take this concept to schools and colleges. Therefore, there is a larger picture at stake.

    A mix of caution and optimism: As far as advertiser interest is concerned, DLF, which lost out on the franchise bid, has taken the IPL title sponsorship. Hero Honda is the co-sponsor.

    Sony Entertainment Television (Set) India, which has telecast rights for the matches, has closed its advertising sales. Set India CEO Kunal Dasgupta says ad sales revenues have already crossed Rs 2 billion.

    Pandit says that companies that get involved with the IPL early will reap the benefits in the long run. When asked about the mix of sports and entertainment, he says that for IPL it is important that while the entertainment quotient like the opening ceremony is good, the cricket played should be serious.

    “It should not be treated as a tamasha. Otherwise you lose out on both,” warns Pandit.

    Lodestar Universal CEO Shashi Sinha, though, has doubts over whether the high rates of sponsorship are worth it for clients. In his opinion, it might be over-priced. “If the IPL does not live up to expectations of advertisers, there will be losses,” he cautions.

    IPL could boost globalisation of cricket: What IPL might do is globalise the game. T20 is, in fact, the best way to get new countries like China involved with the game. Since it is only three hours long, it is easier to get new audiences to sit through it. Adam Gilchrist seconds this view saying that it is important that other nations start playing the game.

    Gilchrist also says that IPL should be given time to grow. It is important not to be pessimistic about it straight away. One will get an idea of how it is faring after a few years, he adds.

    Conclusion: BCCI VP and DLF IPL chairman and commissioner Lalit Modi is very confident that the IPL will mark the dawn of a new era in Indian cricket. One would, however, be better served by not getting bowled over by all the hype and hoopla that is surrounding what could well be termed the ‘gentleman’s game’ on steroids. The maidens may be bringing in sex appeal to the new format but how the event fares over the next three years will be the real test to assess where the IPL, and for that matter ICL, stand.

  • BCCI, ICC resolve MPA differences

    BCCI, ICC resolve MPA differences

    MUMBAI: After all the public grandstanding came the expected resolution. World cricket’s governing body and the Indian board have resolved their differences over the Members Participation Agreement (MPA).

    The quid pro quo was that the Board of Control for Cricket in India (BCCI) agreed to withdraw its bid for the broadcast rights for ICC Events from 2007 – 2015 after “legal opinion” indicated there would be conflict of interest.

    Now a new draft of the MPA will be sent to all ICC member countries.

    A statement issued the International Cricket Council (ICC) after its two-day meeting over the weekend said: “The (ICC) board achieved a successful resolution of the outstanding issues involving the MPA with the BCCI.”

    The BCCI’s objection prior to the discussions was that the MPA in its earlier form affected its commercial interests. Following the compromise deal, BCCI officials say that their sponsors have been protected.

    Now though there will not be a conflict between an ICC sponsor and a BCCI one like Nike. In addition countries like India and Australia can keep hosting triangular events and also events involving four teams. The MPA in its earlier form had not allowed this.

    It may be recalled that a month back ICC president Percy Sonn talked tough warning the Indian cricket board that it “could not continue as one of the joint hosts of the 2011 World Cup” if it refused to play ball.

    The never at a loss for words BCCI vice-president Lalit Modi had fired back then that without India, the ICC’s revenues would be drastically affected.

    After a churlish and often childish back and forth between ICC chief Malcolm Speed and the irrepressible Modi over the last few weeks, bridges have been mended and now the crickets global administrator can go ahead with its rights process tender.

  • India-OZ likely to play 3-match ODI series in America in ’07

    India-OZ likely to play 3-match ODI series in America in ’07

    MUMBAI: After Abu Dhabi (DLF Cup) and Malaysia (tri-series), the next offshore cricket venue for the Indian cricket team will likely be in North America.

    Indian cricket board vice-president Lalit Modi told Indiantelevision.com that an in-principle agreement had been reached for a three-match series between India and Australia to be held in North America in June 2007, just ahead of India’s tour of England in July.

    Modi offered no other details except to say that he would be flying out to the US next week to finalise things.

    If a report filed by Cricket World proves correct, the three matches will be held in Brooklyn, New York.

    The report cites the Floyd Bennett Field in Brooklyn, the first municipal airport in the US, as the venue for the three New York games, which has recently undergone a $38 million renovation to house a new sports and entertainment complex.

    Zee Sports acquired the global media rights for all matches that India will play in non-ICC member countries with a huge $ 219.15 million bid. As part of the deal 25 matches will be played over a period of 5 years with an average of 5 matches per year. The global media rights comprise television, radio and Internet rights. The rights are for a period of five years from 1 April 2006 to 31 March 2011.

    The way the deal breaks up is that for the second year, Zee’s payout commitment to the BCCI is $ 6.03 million per match, which means that Zee Sports would have to generate a little over $ 18 million from the event all told, just to break even on it.

    From the North American market at least, Zee would be expecting to extract a significant proportion of its investment from pay-per-view.