• Like
  • Save
The Business side of IPL
Upcoming SlideShare
Loading in...5
×
 

The Business side of IPL

on

  • 27,952 views

 

Statistics

Views

Total Views
27,952
Views on SlideShare
27,799
Embed Views
153

Actions

Likes
51
Downloads
0
Comments
36

12 Embeds 153

http://www.slideshare.net 62
https://tasks.crowdflower.com 45
http://caparth.wordpress.com 31
http://viceroyisme.blogspot.com 3
http://us-mg6.mail.yahoo.com 2
https://si0.twimg.com 2
http://cricketlivehome.blogspot.com 2
http://hjemstavn.com 2
http://webcache.googleusercontent.com 1
http://wildfire.gigya.com 1
https://twitter.com 1
http://drizzlin.com 1
More...

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel

110 of 36 Post a comment

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…

110 of 36

Post Comment
Edit your comment

    The Business side of IPL The Business side of IPL Presentation Transcript

    • The IPL Business Model
      “Reading poetry and watching cricket were the sum of my world, and the two are not so far apart as many aesthetes might believe. ” -Donald Bradman
    • Teams
    • Teams
    • Teams
    • Teams
    • Team Bidding
      LOL!!
      “Royal Challengers’ mantra ‘winning will be a habit with us’.”
      – Vijay Mallya
    • The bidding process
    • Player
      Auctions
    • Player Auctions
      For IPL season 4 :
      10 teams can spend $7 million each; an increase of $2 million.
      Effectively $ 70 million can be spend which translates to Rs 1000 cr.
      Teams given an option to retain 4 Indian players and 3 foreign recruits.
    • Government revenue
      IPL season 1 : 91 cr
      IPL season 2 : major loss of revenue as IPL was held in South Africa.
      IPL season 3 : 200 cr
      Direct Tax: Rs 100 cr
      Tax deducted at source (TDS) from the remuneration paid to players, umpires, coaches and commentators.
      Service Tax : Rs 100 cr
      Advertising, marketing and consultancy services
    • Revenue Model
    • SPONSORS
      • Sponsors
      • Gate Money
      • Merchandise
      • Advertising
      • Title
      • Licensing
      • Advertisers
      BROADCASTERS
      IPL
      FRANCHISEES
      • Bids
      • Franchisee Rights
      • Media Rights
      Share from:
      • Central Revenue
      • Media Rights
    • Player Revenues & Valuation
    • Player revenues
    • Player Valuation
      Cricket player valued for his on-the-field and perhaps, off-the-field performance.
      Estimating the value of a player having different attributes using,hedonic price equation
      Pi = g ( zi1, …,zij, …, zin)
      where Pi is the final bid price paid to a cricketer i for the IPL tournament and zijis the value of the attribute j of the cricket player i
    • Franchisee Revenues
    • Franchisee Revenues
      Media rights – To be shared equally amongst franchises after removing IPL’s share.
      Sponsorship rights (IPL sponsors) – 60% of the amount collected to be distributed equally amongst the franchises.
      Local Sponsorships – Team sponsorship revenues
      Gate receipts – Are anticipated to be a major source of revenues. 20% of tickets are to be allocated to IPL.
       
    • Revenues 2009 IPL
      Revenue    Jaipur   Chennai   Kolkata  Punjab   Delhi  Mumbai  B'lore  H'badBroadcasting    67.5        67.5         67.5        67.5       67.5       67.5      67.5     67.5Sponsorships      24.0        24.0          24.0        24.0      24.0        24.0      24.0     24.0Other Income  14.2        18.5          18.9        14.3      14.7        14.0      13.5     13.5Prize Money     0.7           1.2           0.4         0.8        1.2          0.5      2.25     4.5-----------------------------------------------------------------------------------------------------Total Revenue   106.4    111.2       110.8      106.6     107.4     106.0   107.25  109.5
    • Expenses
      Team franchising costs – A franchisee has to pay 10% of total franchisee costs every year to IPL
      Player costs –US$4-6mn per year. This includes cost of managers and coaches. Each franchise has 18-22 players who are tradable after a year. The players have a three year contract with the franchise.
      Marketing costs –US$3-4mnby franchisee for promoting its team.
      Stadium expenses – Franchises have to contract stadiums for 7 matches at BCCI agreed rates. On an average, the expense is Rs2.5mn per match.
      Other expenses- Administration and event management.
    • Expenses AND Profit IPL 2009
      FranchiseFees          30.8    41.9            34.5        35.0      38.6          51.5    51.6      49.2Players'salaries      20.0    20.0             20.0       20.0      20.0         20.0    20.0      20.0OtherExpenses   20.5    27.5             30.5       25.5       25.5        27.5     27.5      25.5------------------------------------------------------------------------------------------------------TotalExpenses  71.3  89.4            85.0       80.5      84.1        99.0    99.1     94.7Profit         35.1  21.8           25.8       26.1      23.3         7.0      8.15    14.8.
    • Profit and Loss of a franchise over 10 years
      The Business of Sport
    • Revenue from Media rights
    • The Broadcasting angle
      The BCCI created history when it sold television rights of this yet untested format to Sony– World Sports consortium for US$1.02 bn US$ 1.02bn
      (-)US$ 108mn ( Promotion expenses )
      (=) US$ 918mn ( Actual cost )
      US$ 316mn US$ 608mn
      (Broadcasting rights (Broadcasting rights
      first 5 yrs ) next 5 yrs )
    • The Broadcasting angle
    • Ad Revenues
      Advertising revenues for Broadcaster have seen a steady increase since inception of IPL
    • IPL Revenue from other sources of Media
      UFO Moviez have Theatre rights
      You Tube will show live telecast with five minute delay. You Tube sponsored for  Rs 1.5cr & Rs 4 cr
      ITV has taken UK television rights
      The general entertainment channel of Viacom 18 group (MTV, IBN7, CNBC) colors will air a show “IPL Rockstar”. A deal of about $130 million (About Rs 600 crore.)
    • Sponsorships
    • All these sponsorship revenues fall under the Central Pool
    • Sponsorships
      IPL’s umpire partner -Kingfisher Airlines has been named with rights to advertise of umpire’s clothes and also sponsoring third umpire decisions for five years. The deal is worth Rs. 106 cr (appx. US$ 26.5 mn).
      All these revenues fall under the Central Pool
      100 %
      40 % 54% 6%
      (IPL ) (Franchises) (Prize Money)
    • IPL VS EPL
      • Media revenues for all teams would be almost EQUAL
      • Gate revenues dependent on stadium capacity and purchasing power of city.
      • They vary between Rs500-Rs50000 premium seating. 20% of tickets will go to IPL
      • In India, it is yet to develop. This would be a litmus test for IPL’s success.
      • They vary depending on the success of the league.
      • Internationally, most of these teams own stadiums.
      The club culture already existed in the West.
    • Impact of IPL on other Media
      If Stalin had learned to play cricket, the world might now be a better place.
      -Richard Downey
    • IPL is scheduled to be telecast in the most sought after prime time slot of 8-11 pm.
      This Slot is the most popular among housewives for soaps aired on (GECs) like Star Plus, Zee and Set.
      IPL will cause a dent in the ratings and revenues of other GECs.
      Regional channels which hitherto did not face competition from national level reality shows are likely to take a big hit.
      TV General Entertainment Channel
    • TRPs
      2008-09
      2010-11
      The average half-hour ratings of top general entertainment shows are around 10-12% more than IPL III during the first nine days of the T-20 tournament
      Advertisers have realised that Hindi GECs on a weekly basis generate GRPs of 1,300-1400 while IPL is around 10% of this.
    • Box office
      There is a decline in the number of releases owing to IPL
      IPL fever has a negative rub off on the revenues of movies at the box office.
      Some of the movies releasing in the IPL season are , U me aur ghost , love sex aurdhoka etc.
      Multiplexes like Cinemax and PVR screen all the matches.
      Talks are also on to telecast the semi-finals and finals in 3D.
    • IPL BETTING
      *We had to dedicate a slide to this team 
    • Gambling in Cricket
      How to Bet?There are bets for every match. Betting usually begins few hours before the match.
      What are Odds? Odds indicate the $’s that you will win in return for each $ you bet if your prediction comes true. Odds in the game may vary while the betting is open, depending on many factors.
      What are Payouts? Payout is the final amount of $ which you’ll earn if you win the bet.
    • “Cricket must be the only business where you can make more money in one day than you can in three.” -Pat Gibson
      Total IPL betting – 6000 crores*
      The Law says “NO”
      Online Betting possible on sites like betfair.com
      Bookies say its MI this time.
      “Today’s commercially successful venture, may not be so, in five years time, and the game, has to be protected, for future generations. ” - M S Gill
      "Picking an IPL winner is darn hard. Rajasthan produced the turn up of turn ups in the inaugural season. Deccan, who finished bottom that year with only two wins, were transformed into champs 12 months later.“ - Ed Hawkins , Betfair.com
    • What's the Future?
    • Future Prospects
      Opting for Private Equity
      In EPL football, the putative model for the IPL, the American owners of Manchester United and Liverpool have both used their clubs' assets as financial leverage in other sections of their corporate empires, and reaped the wrath of the fans. The same is the case with the owners of franchises in the IPL.
      The shameless power of money will shape cricket’s destiny.
    • The ICC "will be empowered not by self-centred countries but by businessmen with high expectations" who are "free from impossible responsibilities and the petty politicking" that mars international cricket.
      The Indian Premier League will soon be played in the United States of America.
      The change from patronage to ownership will prove a giant step.
    • What do we finally have to say?
      • Show me the Money: Money and Opulence rule at the IPL.
      • India Shining: IPL is a total win-win for India.
      • The Best The World Has To Offer
      • Metros going Global: IPL teams are homogeneous yet heterogeneous.
      • Changed But Rooted: Cricket has evolved - from tests to ODIs to 20-20s & now to league. Yet, there is heritage, tradition & familiarity.
      • Fast and Furious: IPL is instant gratification.
      • Page 3 Is The Way To Be: IPL has just the right mix of Bollywood and Cricket.
      • Desperately seeking Entertainment: IPL is a great new hangout.
      • Media Maketh the Man: . IPL has provided the media with all the big bucks and glamour which makes for great coverage.
      • Ready for a change: IPL offered a whole new experience & India was ready to give it a try.
    • THANK
      YOU
    • QUESTIONS?
    • But eventually it is a game of cricket. -SachinRameshTendulkar 
    • RonakGoyal
      Shailesh Joshi
      SonaliKapadia
      SubaniKohli
      BinalMandani
      Rishabh Mehta
      Managerial Economics NLDIMSR 2010