Professional Documents
Culture Documents
The process by which a new product or service is introduced into the general market.
Commercialization is broken into phases, from the initial introduction of the product through its
mass production and adoption. It takes into account the production, distribution, marketing, sales
and customer support required to achieve commercial success. As a strategy, commercialization
requires that a business develop a marketing plan, determine how the product will be supplied to
the market and anticipate barriers to success.
Purpose:
IPL is one of the biggest cricket tournaments of the world. There is a lot happening behind
the scenes. The money, fame, fans; all make IPL larger than life.
So, what makes IPL such a Huge Brand? What are the investments behind it?
How teams make a profit? How do the brands associated with them gains?
These economics behind the IPL make me think & fascinate about it.
This is the reason why I took this project.
History of IPL:
The IPL is a Twenty20 cricket tournament which was inaugurated in 2008. Twenty20 cricket was
first introduced at a competitive level by the England and Wales cricket board in 2003 but the
Indian Premier League is largely credited with being the institution that projected the format of
the game onto the world stage.
The Indian Premier League was initiated by the Board of Control for Cricket in India (BCCI) and
has been an enormous success. The annual tournament played in the months of April and May
has gone from strength to strength and is largely viewed as being the 'richest' tournament in
world cricket.
There are the eight franchises that field teams to play in the IPL (in brackets original cost of
franchise in $/million):
The following three teams have played in the IPL but due to financial constraints have ceased to
exist:
2008 Final: Chennai Super Kings vs. Rajasthan Royals; Winner: Rajasthan Royals
2009 Final: Deccan Chargers vs. Royal Challengers Bangalore; Winner: Deccan
Chargers
2010 Final: Mumbai Indians vs. Chennai Super Kings; Winner: Chennai Super Kings
2011 Final: Chennai Super Kings vs. Royal Challengers Bangalore; Winner: Chennai
Super Kings
2012 Final: Chennai Super Kings vs. Kolkata Knight Riders; Winner: Kolkata Knight
Riders
2013 Final: Mumbai Indians vs. Chennai Super Kings ; Winner : Mumbai Indians
As evident from above, the Chennai Super Kings are the most successful side in the history of
the IPL, being winner twice and reaching the finals five times edging over their rivals Mumbai
Indians who have won it once and are current IPL Champion.
Until 2012, the Indian Premier League was sponsored by DLF after they paid $50 million for the
five year sponsorship. Pepsi will take over the contract for the 2013 IPL after paying close to
4 billion rupees for the 5 year contract.
In 2008, Sony paid $1 billion for the broadcasting rights over a ten year period. The IPL is
watched across the world and in 2012 made history by becoming the first sporting event to be
broadcast live on YouTube.
The Indian Premier League has had its controversies over the year, with Lalit Modi being
suspended as chairman and Commissioner of the IPL on 2 April 2010 for what were deemed
alleged acts of independent misdemeanors. Recently the player Mohnis Mishra was suspended
from the game after becoming embroiled in a match fixing scandal during the 2012 tournament.
The tournament is the largest, best known and most prestigious Twenty20 tournament in
cricket.
Franchises:
The winning bidders for the eight franchises were announced on 24 January 2008. While the
total base price for auction was US$400 million, the auction fetched US$723.59 million.
On 21 March 2010, teams from Pune & Kochi were unveiled as the two new franchises for the
fourth edition of the Indian Premier League. The base price was $225 million. While Pune was
bought by Sahara Adventure Sports Group for $370 million, the Kochi franchise was bought by
Rendezvous Sports World Limited for $333.3 million. The process was to have been completed
on 7 March but was postponed by two weeks after many bidders and the BCCI objected to stiff
financial clauses. The second franchise auction fetched total $703 million.
The rights to the Hyderabad franchise were awarded to the Sun TV Network in October 2012.
Mode of selection by each Teams & Tournament rules:
There are five ways that a franchise can acquire a player: In the annual auction, signing domestic
players, signing uncapped players, through trading, and signing replacements. In the trading
window, the player can only be traded with his consent. The franchise will have to pay the
difference between the old contract price and the new contract price. If the new contract is worth
more than the older one, then the difference will be shared between the player and the franchise
selling the player.
Some of the team composition rules are:
No more than 11 foreign players in the squad and maximum of four foreign players
should be in the playing eleven.
5
A minimum of six players from the BCCI under-22 pool in each squad.
The total spending cap for a franchisee in the first player auction was US$5 million. Under-22
players are to be remunerated with a minimum annual salary of US$20,000 while for others it is
US$50,000.
Highest paid players in Season 1 (2008):
The auctions were conducted on 20 February 2008 with Mahendra Singh Dhoni winning the
highest bid of US$1.5 million.
Conceptual Framework:
IPL Cricket Facts, Statistics & Trends: (IPL Season 6)
Revenue and Soaring Viewership of IPL 6 Cricket season:
Though the IPL 6 has observed a setback due to some of the recent controversies, the revenue
continues to paint a rosy picture.
The hike in ad rates has led to speculation of MSM (Multi Screen Media) raking in ad
revenues of above Rs 800 crore.
With IPL being a highly evaluated property, brands such as Godrej launched a series of
new TVCs to create maximum buzz. Though the advertising revenues have caught on
towards the second half, the starting ad rates were much lower than that of IPL 5 in 2012.
The viewership statistics and trends seen till the 38th match in IPL 6 2013 (which is fifty percent
of the IPL6) are staggering, so much so that no other live event has ever created this kind of
reach in India.
IPL online across both boxtv.com & youtube.com/indiatimes combined recorded a 52%
growth viewership over 2012 (75.2M vs 49.3M last year.).
The combined viewership of users watching highlights and clips saw a whopping 480%
growth in watch hours over 2012.
Highlight and clips of Chris Gayle and Pollard seem to be attracting more netizens
eyeball as the two together saw massive 480% growth in watch hours over 2012.
In India Bangalore and Hyderabad lead the viewership with 14 % each while Delhi stood
at #2 with 10% viewership. Though TAM (Televisions Audience Measurement) data for
April 30 (Day 28 of IPL) showed YouTube slipping next to Espn cricinfo. Surprisingly,
WAM data kept Google out from top five lists, which essentially means loss in traffic
related to IPL keywords.
Though the online viewership for IPL6 has been steadily increasing, its interesting to note that
the television consumption for IPL has been gradually slipping. According to TAM data, while
the online viewership has been pegged at 52 per cent, the television viewership has observed a
sharp decline of around 13.6 per cent as compared to last years numbers.
According to research experts, the drop in television viewership of IPL is also contributed by
introduction of DAS (Digital Addressable Cable TV). With DAS Phase 2 coming into force in
Week 14 of 2013, there has been rampant switching off of analog signals across 38 cities, which
has impacted not just IPL ratings, but ratings of other channel as well. Also the ongoing spot
fixing controversy has dented the image of the property.
Rs 1500+ Crores: Advertisers have bet more than Rs 1,500 crore on Indian Premier
League (IPL) Season 6 so far.
100+ Brands: More than 100 brands riding the IPL 6 through direct advertising or
sponsorships or innovative associations with teams. This includes big as well small and
even local brands such as Raindrops basmati rice, Noida International University, Amity
University, Live-In Jeans, Sheltrex, R N Sports, Gilpin Travel Management and Sanskar
School.
25%+ increase in advertising revenue for MSMPL: Last year, Multi Screen Media Pvt
Ltd (MSMPL) had managed to get only seven sponsors on board and clocked in over Rs
700 crore through advertising. This year, it has 11 sponsors (including Samsung,
Panasonic, Karbonn Mobiles, Tata Photon, Cadburys, Parle Foods, Usha Appliances
International, Havells and Godrej) and 90 per cent of its ad inventory is already sold and
it is hopeful of closing the season with revenues in the excess of Rs 900 crore. MSM
began by selling its inventory at around Rs 4-4.5 lakh, but a new advertiser wanting to
hop on to the network at this stage will have to shell out around Rs 5.5 lakh per 10
seconds. A similar prime-time TV spot on the most popular entertainment shows such as
Bigg Boss or KBC costs around Rs 1-2.5 lakh.
Branding on Jerseys: As for the teams, even newbies Sunrisers Hyderabad and Pune
Warriors have their jerseys swamped with brand logos. Pune Warriors, for instance, has
its own brand Sahara, Finolex, Killer Jeans, Sansui, Lux Cozi among others while
Sunrisers has got makemytrip, Kingfisher, Garnier, 7UP, Manyavar and Live-In Jeans on
board. This year, almost all franchisees have sold a minimum of 10 active spots on their
players attire. The active spots referred to by Karnik include lead chest, right upper
chest, lead arm, non-lead arm, back of the jersey, on cap, on the front and the back of the
helmet, lead trousers and non-lead trousers.
GroupM is the countrys largest media buying house and has facilitated deals worth Rs 75
crore between various brands and IPL stakeholders.
Value at which new deals have been struck has gone up by almost 100%: All of the
six central sponsorships owned by the IPL management were up for renewal this year.
While the number of sponsors came down to five, the value at which new deals have
been struck has gone up by almost 100 per cent. For instance, realty company DLF had
signed a five-year title sponsorship deal with IPL for Rs 40 crore a year whereas new
sponsor PepsiCo has picked up the tab for Rs 79.6 crore per year for the next five years.
The cola company is also the pouring partner (essentially means the players will only
drink PepsiCo products on the ground) of eight teams. The other sponsors roped in by
the IPL management include Vodafone, Yes Bank, McDonalds and Star India. Each of
these is learnt to have bought the rights for around Rs 28-30 crore a year.
With 7 players purchased, Royal Challengers Bangalore team to purchase most players in
IPL 6 2013.
While the most expensive player in IPL 6 Auction 2013 was Glenn Maxwell who went to
Mumbai Indians for $1,000,000, the most expensive Indian player was Abhishek Nayar who was
sold for $675,000. Here is the list of top most expensive players and their final auction prices for
IPL 6 2013 are as follows:1. Glenn Maxwell- $1,000,000 for Mumbai Indian.
2. Ajantha Mendis- $725,000 for Pune Warrior.
3. Kane Richardson- $700,000 for Pune Warriors.
4. Thisara Perera- $675,000 for Sunrisers Hyderabad.
5. Abhishek Nayar- $675,000 for Pune Warrior.
6. Senanyake- $625,000 for Kolkata Knight Rider.
7. Chris Morris -$625,000 for Chennai Super King.
8. Dirk Nannes- $600,000 for Chennai Super Kings.
9. Jaydev Unadkat- $525,000 for Royal Challengers Bangalore.
10
After receiving a fairly good response from advertisers for this years Indian Premier
League (IPL-6 ), Multi Screen Media (MSM), the official broadcaster of the IPL, has
hiked its advertising rates by 10%
MSM had earlier lowered rates by 10-15 % for IPL-6 and was charging Rs 4- 4.5 lakh for
a ten-second ad spot.
The reduced rates had made the property attractive for many advertisers as brands made a
comeback after having given the tournament a miss last year.
MSM, which has only 20% of ad inventory left currently, may further hike rates if the
tournament kicks off well.
MSM is looking to make Rs 950 crore in advertising revenue from IPL-6, up from Rs
750 crore it garnered last year.
The presenting sponsors PepsiCo and Vodafone have shelled out Rs 40-60 crore each
while the associate sponsors like Tata Photon, Karbonn tablets, Godrej, Samsung
Mobiles, Panasonic, Usha Appliances, Cadbury, Havells and Parle Foods have paid Rs
25-30 crore each for being seen on television during IPL-6.
MSM which will broadcast IPL on SET Max and Sony Six, has also struck large deals
with Coca-Cola, Parle Agro, Marico, Berger Paints and Airtel.
Godrej will launch a brand new campaign with its new brand ambassador Aamir Khan
during the 54-day Twenty20 tournament. Godrej will release as many as nine new ad
films around the masterbrand Godrej.
11
Soft drinks giant PepsiCo, which is doling out huge moolah around the IPL having paid
Rs 396 crore for title sponsorship, bagging pouring rights for eight of the teams and
signing on as a presenting sponsor on MSM, will back this up with strategic and highdecibel marketing and activation plans.
Coca-Cola is planning a blitzkrieg of its own despite not being an official IPL sponsor.
The cola major will be seen on the telly with campaigns for brand Coke, Limca, Sprite,
Minute Maid Nimbu Fresh and Maaza along with its Thums Up brand ambassador
Salman Khan launching a new game on the actors Facebook page.
IPL Online Viewership Facts: Statistics & Trends on Digital IPL viewership:
The 2012 IPL 5 matches were streamed online by IPL official partner, Times Internet Limited
(TIL) in partnership with YouTube.
IPL 5 2012 saw a 55 per cent increase in online viewership. In comparison with 72 million
video views in 2011, 113 million video views were generated during 2012 IPL 5 season
Video views from India showed a strong growth of over 87 per cent from the previous year
standing at 80 million in 2012 compared to 43 million in 2011.
The final 2012 IPL 5 match on May 27 generated 7.5 million video views, making it the
highest single-day viewership during the entire season.
How a Franchise makes money:
Ticket sales
Sponsorships
A cut from the broadcasting rights sold by the Board of Control for Cricket in India.
12
What did the 2012 IPL 5 Victory mean for KKR (Money wise):
13
Here are some real statistics about how the winner of IPL 5 benefits from the win and how it
impacts the business and money it makes:
The IPL 5 Player costs: It is estimated KKR spent about Rs 100 crore, including Rs 50
crore for hiring players, this season. Four players Gautam Gambhir, Jacques Kallis,
Sunil Narine and Yusuf Pathan alone cost KKR Rs 30 crore.
The IPL 5 Winners Prize Money: When Kolkata Knight Riders (KKR) beat two-time
defending champion Chennai Super Kings to win their first ever title in the Indian
Premier League (IPL) on Sunday night, the Knights not only shed their underachievers
tag, but also pocketed Rs 10 crore in prize money, ensuring that the T20 cricket franchise
was able to make profit this season.
Sponsorship Money: KKR, have 18 sponsors, the highest among all teams. After the
win, KKR may also increase in sponsorship rates for next year. A lot of existing sponsors
have contracts which have a mandatory 10 per cent cost increase clause in-built within
the contracts, but they might ask more of new sponsors from next year. The cost of a nonjersey partnership with KKR is Rs 60 lakh and a jersey sponsorship is upwards of Rs 1.5
crore. This year, KKR made roughly Rs 35 crore from sponsorships. KKRs sponsors
include Nokia, Birla Sun Life, Dish TV, ITC Vivel, Rose Valley, Royal Stag, Concast
Steel, Bisk Farm Biscuits, Coca-Cola, Emta, Manyawar, Freecultr and The Telegraph.
Ticket Sales Money: KKR hosts teams at the 65,000-capacity Eden Gardens. This year,
revenue from ticket sales was bolstered by the Rs 35-lakh entertainment tax relaxation
that KKR got from the state government. Eight matches were played at Eden Gardens,
and KKR sold 40,000 tickets a game at denominations of Rs 300, Rs 700 and Rs 1,500.
Also, 10 corporate boxes costing Rs 10 lakh each were sold per game.
14
The instant brand recall that the jersey logo creates works out for Rose Valley Group
which paid Rs 5 crore for a place on the KKR jersey.
KKR brand value can be considered to have more brand value since North, West and
South have more than one team to support and the East has just KKR. This means as a
brand, KKR has a larger following than any other team.
For any team to gain in brand value, three metrics have to be in place core product
quality or the quality of cricket played, marketing effectiveness, and governance. While
KKR have consistently been a brand to reckon with, given Shah Rukh Khans star power
and marketing prowess, the team has never been known for its performance, making the
playoffs for the first time in the past four seasons last year. Their win will change this,
ensuring that the KKR franchises value gets a major push. Also, the issues around
governance and controversies that surrounded KKR seem to have been sorted out.
City
Owners
Price
Captain
Chennai
Super Kings
Chennai
India Cements
MS Dhoni
Delhi
Daredevils
Delhi
GMR Group
Kings XI
Punjab
Mohali
Preity Zinta,
Ness Wadia (Bombay
Dyeing),
Mohit Burman (Dabur)
Karan Paul (Apeejay
Surendera Group),The Oberoi
US
$91
million
US
$84
million
US
$76
million
Mahela
Jayawardene
Adam
Gilchrist
Head
Coach
Stephen
Fleming
Gary
Kirsten
Darren
Lehmann
15
Group
Shahrukh Khan (Red Chillies
Entertainment)
Juhi Chawla, Jay Mehta
(Mehta Group)
Reliance Group
Teesta Retail
Kolkata
Knight
Riders
Kolkata
Mumbai
Indians
Mumbai
Rajasthan
Royals
Jaipur
Royal
Challengers
Bangalore
Sunrisers
Hyderabad
Bangalore
Hyderabad
Sun TV Network
US
$75.09
million
Gautam
Gambhir
Trevor
Bayliss
US
$111.9
million
US
$67
million
Rohit Sharma
John
Wright
Rahul Dravid
Paddy
Upton
US
$111.6
million
US
$159
million
Virat Kohli
Ray
Jennings
Shikhar
Dhawan
Tom
Moody
DEFUNCT TEAMS
Team Name
Kochi Tuskers
Kerala
Deccan Chargers
City
Kochi
Pune
Hyderabad
Owners
Kochi Cricket Private
Ltd
Deccan Chronicle
Holdings Limited
Sahara India Parivar
Price
US$333 million
US$107 million
US$370 million
16
Price (USD)
180
160
140
120
100
80
60
40
20
0
Price (USD)
(Prices in Millions)
Here we can see that the prices (read investments) of each team. The highest being Sunrisers
Hyderabad owned by Sun T.V. Network with U.S. $157 million, followed by Mumbai Indians
owned by Reliance Group with U.S. $111.9 million. Third up is U.B. Groups Royal Challengers
Bangalore with U.S. $111.6 million.
With the other teams total investment in the Indian Premier League, the total value of IPL
teams worth up to U.S $775.59 million.
KKR, in contrast, has jumped two notches to the second position, with a brand value of $44.98
(Rs 243 crore). The brand value of the Shah Rukh-Khan-owned franchise has grown 15.2 per
cent since last year the highest by a team.
Rank (2013)
Rank (2012)
Teams
B.V @ 13
B.V @ 12
Change %
1.
2.
Chennai
Super Kings
45.42
45.28
0.05
2.
4.
Kolkata
Knight
Riders
44.98
39.03
15.2
3.
1.
Mumbai
Indians
44.62
48.21
-7.4
4.
3.
Royal
Challengers
Bangalore
37.81
41.15
-8.1
5.
5.
Delhi
Daredevils
34.22
32.19
6.3
6.
Sunrisers
Hyderabad
31.49
7.
8.
Kings XI
Punjab
30.78
28.66
7.4
8.
7.
Pune
Warriors
29.45
28.88
9.
9.
Rajasthan
Royals
27.05
26.93
0.04
(In $ millions)
18
60
50
40
30
20
B.V @ 13
B.V @ 12
10
0
(In $ Millions)
19
Annexure IA:
Supervisors Certificate
This is to certify that, Mr. Abhra Ghosh, a student of B.Com Honours in
Accounting & Finance of HERAMBA CHANDRA COLLEGE under
University Of Calcutta has worked under my supervision and guidance for his
Project Work and prepared the project report with the title:
COMMERCIALIZATION OF SPORTS INDIAN PREMIER LEAGUE (An
Overview),
Which he is submitting, is his genuine and original work to the best of my
knowledge.
Place: Kolkata
Date:
Signature
Name: Anwesha Samanta
Designation: Lecturer
Heramba Chandra College.
21
Annexure IB:
Students Declaration:
I hereby declare that the Project Work with the title COMMERCIALIZATION
OF SPORTS INDIAN PREMIER LEAGUE (AN OVERVIEW) submitted by
me for the partial fulfillment of the degree of B.Com. Honours in Accounting &
Finance under the University OF Calcutta is my original work and has not been
submitted earlier to any other University/Institution for the fulfillment of the
requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by me or others. However,
Extracts of any literature which has been used for this report has been duly
acknowledged providing details of such literature in the references.
Place: Kolkata
Date:
Signature
Name: Abhra Ghosh
Address: Gopalpur, Asansol.
Reg. No: 043-1121-0515-10
22
References/Bibliography:
The data for this project was taken from the following domains:
www.wikipedia.com
www.google.co.in
www.timesofindia.com
www.iplt20.com
www.bcci.tv
www.slideshare.com
www.hindusthantimes.com
www.civilservicesindia.com
23