IPL may rake in Rs 600 crore ad revenue

The Indian Premier League (IPL), the Board of Control for Cricket in India's (BCCI) Twenty20 tournament, is estimated to generate an advertising revenue of over Rs 600 crore in its first season.

In the first year, each of the eight team owners will spend around Rs 25 crore on marketing and promotion, which include below-the-line activities, city-based club activations and so on, say sources.

"We will spend in the range of Rs 20 crore on team promotions," said P K Iyer, managing director, Deccan Chronicle, which owns the Hyderabad team.

Delhi team owner GMR Holdings and Jaipur team executives too confirmed that they would spend around Rs 20 crore each in the first year.

"We will spend over Rs 16 crore on promotions as we will concentrate on brand building," said Fraser Castellino, the CEO of Emerging Media, who along with Lachlan Murdoch owns the Jaipur team.

Industry estimates put the total advertising pie for the country, including below-the-line activities, at around Rs 22,000 crore a year.

Advertising for IPL will be generated through four major avenues, namely, air time sold by Sony Entertainment Television, BCCI's own marketing plan, promotional activities of the eight teams and from brands associated with the league.

An industry source said BCCI had allocated roughly Rs 100 crore as its advertising budget, while Sony is estimated to earn nearly Rs 300 crore from ad slots. In addition, close to Rs 200 crore will be spent on the teams for promotion and marketing.

"While the brands associated with the league may not necessarily increase their marketing and promotional budget, they will cut their spends on a particular medium. So their overall contribution may not be very high. However, for the first round, Rs 300 crore will be added to the total advertising pie. IPL will be a new contributor to the ad industry," said R Gowthaman, managing director, south-west India, Mindshare. However, experts believe the same may not hold true later.

"IPL will have a salient launch and the advertising spends will be substantial. But as the league gains popularity, the ad spends will come down," said Vikram Sakhuja, COO, South Asia, Group M.

Team selections
Meanwhile, cricketing action in IPL is about to get under way as team owners make a wish-list of the players they will aggressively bid for at the players' auction to be held on Wednesday.

While Reliance Industries, which was the highest bidder in the team auction and won the Mumbai team for $111.9 million, already has Sachin Tendulkar on board, it is believed to be in talks with ICC representative Jamie Stewart for the position of advisor.

"The upcoming player auction will help decide the final composition of the team. We will obviously aim for a winning combination and cannot divulge competitive strategy at this stage," an RIL spokesperson said.

Vijay Mallya's Bangalore team, which was won for $111.6 million, will be RIL's closest competitor, according to sources.

"We will be aggressive in our bids. Our team motto is 'playing to win' and this will be reflected in everything we do," said Vijay Rekhi, president and managing director, UB Group.

The Bangalore team would have Rahul Dravid as captain.

Rekhi added that they would also work towards building a loyal fan base for the Bangalore team.

"Since the first match will be played between Shah Rukh Khan's Kolkata team and our team, we will dedicate a space in the stadium for fans to cheer," he said.

With BCCI deciding that each team owner will have to bid between $3.3 million and $5 million a year to rope in players from the 80 the board has listed, which does not include catchment area players, it will be a close call.

For instance, the Delhi franchisee owner, GMR Holdings, will spend around $4 million, say sources. GMR has roped in T A Sekar (chief coach of the MRF Pace Foundation) as the team advisory and has partnered event management and entertainment agency, Wizcraft International.

Virender Sehwag was today announced as the tentative team captain with Greg Shepherd as the coach. GMR has decided to name the team Delhi Daredevils.

For the Jaipur team, the former managing director of IMG South Asia, Ravi Krishnan, has been appointed vice-chairman. He will advise the team on commercial, operational and on-field activities. Ogilvy is on board as the creative agency.

Emerging Media is keen on M S Dhoni as captain for the Jaipur team and will bid for cricketers from South Africa, Pakistan and Sri Lanka. Sources added that Greg Chappell would be the team's coach.