IPL: Can they get enough spectators?

<img border='0' align='left' title=' ' src='http://www.ndtv.com/convergence/images/thumbnail/ver1/i/ipl-collage.jpg' class='caption'> Indian Premier League (IPL) has proved it can pull in the big names and the big bucks but can the numbers match the hype?

Updated: April 17, 2008 07:08 IST
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Indian Premier League (IPL) has proved it can pull in the big names and the big bucks but can the numbers match the hype?
  • TV rights: $918 million
  • Promotional rights: $108 million
  • Title sponsorship rights: $50 million
  • Team rights: $723.5 million
But will the numbers add up?

The key to this league's success will depend on whether big corporates are ready to buy airtime for IPL's matches. Already some are voicing doubts.

"No, as of now formally the Sony rates have not come to me. But informally you have seen the bidding or whatever, the stakes are high. If they bid so high, so obviously, the expectations of the returns will be very high," said Shashi Sinha, CEO, Lodestar.

"Personally, the way cricket has gone in the last six-seven months in this country, it's a bit of a big-ticket game, it's a bit of a puddle. So one has to be a careful. Because unlike the old days of assured ratings, today those things are suspect, anything can happen. I'd be very careful," Sinha added.

For TV rights, Sony Set Max has roughly paid Rs 4 crore per game for 59 games in 2008 with an average advertising time of 2,000 seconds per game.

To recover what it has paid back, of the envelope calculations say, Sony will have to charge roughly Rs 2 lakh per 10 seconds to advertisers to make up the cost.

That will be a huge jump considering advertisers paid roughly Rs 1.25 lakh per 10 seconds for the Cricket World Cup ads.
  • Sony Set Max has paid: Rs 4 crore per game
  • 59 games in 2008
  • Average advertising time: 2,000 seconds per game
  • Sony Set Max will have to charge: Rs 2 lakh per 10 seconds for ads
  • Advertisers paid Rs 1.25 lakh per 10 seconds for World Cup
However, the consortium says the number crunching won't work on a year-on-year-basis. They are in the business for a long inning, which will take care of the profits.

"If you are looking at us breaking even in the year one, I don't, that is not in the business plan of any of us. Year one breaking even is a myth. If you look at over a five year period or a 10 year period and then evaluate properly, at the end of these five or 10 years you will realise the potential that of us all team owners, broadcasters and the IPL itself," said Sneha Rajani, CEO, Set Max.

Franchise owners

Also, for the franchise owners to make money, they'll have to get their cities excited about their teams and pack in the stadiums, which again may not be easy.

"The real challenge will be one creating a massive following on the ground on which they operate. The fundamental to the success is, can they get the people to come on the ground and watch. It's not about the TRPs, you need to get the local crowd," said Sanjay Jha, Managing Editor, CricketNext.com.

"That's when you do merchandising, in stadia rights. You start to sell many other products and sponsors and get them into the play. The real game for the franchises is the capital, appreciation of the franchise value," Jha added.

A lot of buying and selling of turf has already taken place. And big players in the BCCI and ICC have all the risks covered.

But ultimately, this is a game show and however big the promise of the spectacle is, in the end game, returns will depend on how many eyeballs and how much money is put in by advertisers.

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