Reliance sees 3-yr payback time for IPL venture

Mukesh Ambani's Reliance is looking for a gestation of 3 years for its investments in the Indian Premier League (IPL). The main contributor to its revenues will be its sponsorship partners.

The company is scouting for alliance with about three to four major partners. Reliance was the highest bidder in IPL team auctions with an investment of $111.9 million.

After the announcement of the brand identity and logo of the Mumbai team, now named Mumbai Indians, Kaushik Roy, president, brand strategy and marketing communication, Reliance, said, "The investments by the company chiefly consist of the amount spent in the auction and in taking up the venue, Mumbai. Although we are trying to get the best out of the inaugural year for IPL, the gestation could be fairly stated as about 3 years."

The main revenue streams for Reliance through IPL are ticket sales and partner sponsors. Twenty per cent of the ticket sales would be with IPL, while the balance would be earned through franchises. Team sponsorship, however, would form the bulk of the revenues, said Roy.

Reliance has invested in IPL through its subsidiary, Reliance Retail. Its association with Mumbai as a venue is for the long term, at least for 10 years. This relationship is expected to give one more benefit to Reliance Retail to connect with the rural population of India.

"In the longer run, we hope to build better contact with rural India through IPL as cricket as a sport is loved and lived here," said Roy.

Reliance will announce the coach and other supporting staff of the team in some time before the IPL Twenty20 tournament kicks off in April.