India Inc is slated to spend a staggering Rs 84 lakh every hour on the game in the next 11 months
Corporate India will fork out a staggering R s6,500 crore in the next few months on the magic of cricket, whether it is to advertise on TV during World Cup matches, on Indian Premier League (IPL) franchise fees, to pick up players, or bag team or tournament sponsorships. That’s an average of around Rs 84 lakh every hour in the next 11 months.
Irrespective of whether franchisees or broadcasters make any money, BCCI will earn Rs900 crore just from the IPL, primarily through its share of broadcasting and sponsorship revenues, as well as from franchise fees. That’s Rs2.5 crore every day from just one key tournament.
What is on offer, come February, is over 95 days of gruelling cricket. That includes the ICC Cricket World Cup, which is being played in the Subcontinent after a gap of 15 years, and the coveted IPL, in which for the first time ten teams will be battling it out over 74 matches for the top slot. October sees the ICC Champions League T20. The largest chunk of money, of course, will be spent by advertisers. Together, they will put in around Rs 3,000 crore, either to buy spots on TV, become sponsors of tournaments or teams, or for endorsements of their products by players. Media planners say hardly anyone can escape the lure of cricket.
For the IPL, for instance, most of the teams expect to sell the title sponsor tag for Rs20-25 crore, while other sponsors are up for grabs at around RS 2.5-3 crore. Says Punitha Arumugam, group CEO, Madison Media: “Our analysis shows that the ones who have new campaigns to break, want spontaneous awareness and are looking to reach a male audience should use cricket as a property. This is a big year for cricket. There's no doubt about it.”
Media analysts are telling their clients they cannot do without exposure in cricket. Says Anitya Nayyar, CEO for India & South Asia, Havas Media: “The first half is full of cricket, so you can't but be on cricket, especially for those whose target audiences are males and the youth. So, auto, insurance and telecom are categories you can expect to see advertising heavily during cricket events.”
Corporates say they will definitely put their money in cricket. Says a Samsung India spokesperson: “We have a whole host of new launches, which are planned during this period. We will be taking air time on IPL, which we think has worked as a format to address our potential audience.”
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Broadcasters are hoping to cash in on the cricket mania. After all, they have to recover the hefty payments made to snare broadcasting rights. SET Max, for instance, has to pay Rs670 crore for the IPL rights for the first three years. ESPN has bought the ICC rights of the two World Cups and couple of other games for $1.2 billion. On the whole, they have to recover over Rs1,800 crore forked out as broadcasting rights this year, say analysts.
That is why they are raising the stakes. Says Devraj Sanyal, CEO of Percept Sports & Entertainment, which handles some of the franchisees: “Prior to the (player) auction, SET Max was charging Rs5 lakh for a spot buy. But interest in the auction has seen this go up by 20 per cent to Rs6 Lakh for a 10-second spot.” Even ESPN Star Sports is understood to be selling 10-second ad slots for Rs4 lakh, which has doubled over that charged during the last World Cup in 2007.
And there is very little inventory left with broadcasters that is up for grabs. Rohit Gupta, head of sales, SET Max informed, “We have already sold 75 per cent of our inventory. We have signed on 10 sponsors for the matches and another six for ‘Extra Innings’.
The other big spenders are the ten IPL franchisees, who will spend over Rs1,100 crore to make the fun happen. But all of them say that they will make money. The break-evens, however, depend on the price paid for the franchise. The eight older franchisees have been able to amortise their costs over a three-year period and many of them are already making money.
The challenge, of course, would be for the two new franchisees, who together paid a whopping Rs3,235 crore for the new teams for a ten-year period. But a senior executive of Sahara Pune Warriors, the franchise for which cost Rs1,665 crore, believes his team is among the most marketable: “Our research shows that after Mumbai Indians and Chennai Super Kings, we are the third most marketable team in the IPL. While we might not break even in the first year, our expectation is that we will get at least eight to nine sponsors.” Experts also agree. Says Sanyal: “The new teams are being looked at keenly for the novelty value they bring to the table. Franchisees will certainly make money from sponsors, and as ticketing and merchandising revenues pick up and the share of TV rights kicks in, they will make cash break evens pretty soon.”
In associate with Sharmistha Mukherjee & Viveat Pinto