Indian Premier League
Indian Premier League made a huge impression in India. “Today it’s the biggest show in the country. It’s like a Bollywood blockbuster that lasts about 50 days,” Tuhin Mishra managing director of marketing agency Baseline Ventures said. The following teams play in the Indian Cricket League:
- Mumbai Indians
- Delhi Daredevils
- Kolkata Knight Readers
- Royal Challengers Bangalore
- Sunrisers Niderabad
- Kings Xi Punjab
In poor India, cricket is a religious cult, a daily bread and the only possible form of sport for the vast majority of people.
They say the East is a delicate matter. They say it has its own, special logic, unlike European. Well, if so, then in India it is probably “especially special.” After all, one must be able to: create one of the world religions, Buddhism, and discard it a thousand years later, returning to the old one; expel the centuries-old occupiers with the help of a markedly peaceful protest; feel like the cradle of civilization and continue to be its deep periphery. In general, when you look at India from the west, it sometimes seems that the mind does not understand it, it has become special.
Indian sport is also very peculiarly arranged: all its forms – even if commanding, though individual – are in a more or less equally depressing state. It’s no joke: a country with a population of 1.2 billion people won only twenty Olympic medals (of any value), of which the first two went to an Englishman who did not leave here, and the next 11 went to the field hockey team. (The Indians were the world hegemon in this sport until in the 1970s they switched to artificial surfaces that were too expensive for India.)
The exception to this rule, according to which India is behind the whole planet in any competition, is only one, and his name is cricket. And yet again the paradox: cricket was brought here by the English colonialists, they play it only in the former British possessions, the games in it can literally last for days, and for the game you need to spend money on a whole set of ammunition. It would seem that there are no prerequisites for success in a poor postcolonial country. But no: in massively poor India, cricket is a religious cult, a daily bread and the only possible form of sport for the vast majority of people.
India has created a mega-successful league: it earns a lot and sets world records on the Internet
It has long been known: India worships cricket. But it is not so widely known that a splendid economy is built around this sport in the country: the media rights of the Indian Premier League (IPL) under the new contract (2018-2022) cost 2.6 billion dollars. This transaction is included in the world top 10 and in terms of one season (510 million) ahead, for example, the NHL contract valid until 2024 (454 million). The most amazing thing is that the IPL was founded only 10 years ago: the first tournament started on April 1, 2008 (another hockey parallel). Games are played in an abbreviated Twenty20 format (Twenty-Twenty pronounced in Russian), they last an average of three and a half hours – for cricket it’s a little, because in a different format (a one-day match) games usually go at least five or six hours It was from the launch of Twenty20 in 2003 that Indian cricket began to gain commercial appeal.
In January of 2010, the Indians agreed with Google on a live show of all matches of the tournament without geo-organisms. The creator and first head of the league – local businessman Lalit Modi – spoke of this contract as a deal that will turn the world of sports broadcasts. “Now you can wake up in the morning and watch the game from any moment, and not wait until the repetition starts on TV”, now everything sounds trite, but when the actual model of the iPhone was 3GS with a 3-megapixel camera, it was IPL that helped break into the future. Immediately after the 2010 season, Modi had to leave the Cricket Control Council pushed him away: according to rumors, Modi was against the victory of one of the applications for the vacant franchise and pressed on the future winner, pursuing his financial interests. The founder of the league went to London, but the pace of development of the IPL only increased.
In the early 2010s, management experimented with the number of teams: one season spent with ten, then two – with nine, but eventually settled on eight. Seven of the current table in the IPL since its inception, one – since 2013: in Hyderabad, the 7-million capital of the 30-million state of Thelingan, the franchise owner changed. All teams represent different cities. The largest centers – Mumbai (more than 12 million), Delhi (more than 11 million) and Bangalore (more than 8 million) – are naturally covered. The IPL season is intense April and May, in a tournament of 60 matches. Within two months, each team holds 14 games, with each opponent at home and away. The schedule is designed so that no more than two games take place in one day, they are bred on timeslots. In the playoffs for the four best teams, they use a double-knockout system, which e-sports fans promote to football. Semifinals and finals are not a series, but single matches.
The YouTube-broadcasting league recognized it as a successful experiment, which allowed expanding the audience, but then nevertheless focused on the usual players of the TV-market. Digital-rights league gradually introduced into the general package of the copyright holder. Gradually, they became a valuable lot on their own, in the summer of 2017, they were claimed by Facebook and BAMTECH, but Star India, which is part of Rupert Murdoch’s empire, won the race. It got the same 2.6 billion dollars and television (the only competitor was Sony, he broadcast the first ten tournaments – offered 1.7 billion), and online rights to the whole world. After signing this contract, for the first time in history, one game of the club-based Indian tournament became more expensive than one match of the country’s national team – by the way, Star India also shows them. At the cost of one game (about 8.7 million dollars) IPL is now four times higher than the NBA and thirteen – MLB. Only the English Premier League (13.7 million) and the German League (22.47) are ahead.
IPL disqualified the top club because of a wild scandal. And still continued to grow
Both top international companies that operate in the Indian market and local brands build their marketing plans to take the maximum from the IPL season. For example, in 2017, separate advertising campaigns at the start of the tournament simultaneously launched: the local office of Amazon, the Indian departments of Pepsi and Vodafone. For the local market, the start of the IPL is the equivalent of the Super Bowl. Simultaneously with the signing of the new media contract, the IPL renegotiated the contract with the title sponsor: the Chinese smartphone maker Vivo paid $ 13 million in 2016 and 2017, and the new five-year agreement will give each year 61.5 million – almost five times more.
Surprisingly, the IPL has achieved such growth, despite the organizational problems and powerful scandals that are wild by the standards of Europe and America. For example, in the season 2019 IPL, parliamentary elections will prevent for the third time: in 2009, because of them, the whole tournament had to be played in South Africa in 2014 twenty matches were transferred to the United Arab Emirates. The reason is the same for which the Russian Premier League has shifted matches since the voting day: all security officers are involved in organizing elections, there are no resources left for filled cricket stadiums (from 25 to 68 thousand people).
In 2019, the IPL is again planning to move part of the games outside of India and is again going to choose the United Arab Emirates, because the live broadcasts from there are convenient for the Indians, at least in time. The final decision of the IPL will be made when the election dates become known. Two scandals related to financial fraud shook the league in 2012 and 2013. First, the local television station India TV worked powerfully: he conducted an investigation and proved that five players tried to influence the outcomes of matches in the interests of third parties – all players were disqualified, one even forever.
A year later, the bomb was even stronger. The police began to closely monitor the monetary operations, while investigations in Delhi and Mumbai led to the arrests of three players of the Rajasthan Royals Club, the first winner of the IPL (influence on match events, which can be earned by betting), actor in India Windu Dara Singh (suspicious connections with bookmakers) and the head of the Chennai Super Kings team, which has just won two titles in a row (illegal bets and links with bookmakers).
The trial lasted four years and reached the Supreme Court of India, it confirmed the guilt including representatives of clubs, in the end Rajasthan and Chennai were suspended for two seasons, in 2016 and 2017 instead of them two new clubs appeared in IPL which the league has created for replacement (at this moment Pepsi broke the title sponsor’s contract two years before its termination due to the “negative impact of scandals on the brand’s reputation”, the slot immediately occupied Vivo). The teams returned in the 2018 season, Chennai immediately became the champion. This club in all its nine seasons hit the medals.
IPL costs 5-6 billion dollars. How did the league achieve this?
The return of “Chennai” was especially important from the point of view of fans’ interest: 10,000 spectators came to the first pre-season training of the team a two-year ban didn’t prevent Super Kings from becoming the most expensive brand among IPL members – $ 65 million by Brand Finance. Their own data suggests that the value of the league brand as a whole, according to the results of the 2018 season, grew by 37% – and reached a historic high of 5.3 billion dollars. Analytical company Duff & Phelps in its report cites even more serious figures: according to its methodology, brands of top clubs IPL cost more than $ 100 million, and the whole league – 6.3 billion. Another thing is more important: analysts both there and there agree in describing the strengths of the main Indian league.
- A large telecontract with Star India brings money not only by itself. Thanks to the noise that created the news of the deal, the current large advertisers increased the amount of investment to protect slots from competitors, and free positions attracted more attention.
- Hotstar, a cross-platform OTT service that is also part of the holding with Star India, has powerfully increased its online audience: by the middle of the 2018 season, it attracted 150 million new users. The parent company seriously invested in the technical modernization of Hotstar, immediately after winning the IPL Star race, India announced it was investing $ 192 million. By the way, sport was an occasion, but not the only reason for investment. Hotstar has other attractive exclusives – for example, this is where Indians watch “Game of Thrones”. Hotstar worked IPL-2018 with elegant performance. For example, on May 28, during the IPL “Chennai” – “Hyderabad Sunrisers” final, the service set a world record for the number of viewers who joined the broadcast simultaneously – 10.7 million people. The previous achievement was the YouTube-live jump from Nolan Baumgartner from the stratosphere on the Red Bull channel, watched by a little more than 8 million people. According to Hotstar Executive Director Agit Mohan, the service began the season with the goal of setting a record for purely sporting events and exceeding the bar of 5 million users at the same time. Everything turned out at the very beginning of the tournament. The world record of Red Bull fell at the start of the playoffs when the first and second teams of the group tournament, Hyderabad and Chennai (8.26 million), met. Thanks to the double elimination grid, the same teams met in the final – the record was improved by 2.5 million.
- One of the best moves of the league is to create excellent conditions for viewing IPL matches where there are no teams of their own. Indians love for cricket allows. In 36 cities of the country (all with a population of over one million), IPL organizes fan parks and creates an atmosphere in them similar to the stadium one. Admission is free inside guests offer a variety of entertainment and, of course, provide a lot of opportunities to spend money.
- In fact, this is a scaled version of the fan zones that FIFA organizes during the World Cup – only in India with their help cover those locations where the top-level cricket itself does not come.
- Star India, combining all the rights at home, focused on the Indian regions. In India, according to 2007 alone, more than 30 languages are spoken, with more than one million people, except state Hindi (speakers – only about 40% of the population) and English. The new broadcaster chose four languages in addition to English with Hindi and launched broadcasts in the necessary regions with commentary on them. In the final match Star expanded its coverage to eight languages. The move brought a 22% increase in the audience compared with the previous season. The popularity of the airs in the countryside, where two thirds of the population of India live, has steadily increased during the broadcast from Sony. In addition, starting in 2016, Indian companies that are engaged in research of the audience, more cheated areas remote from major cities: first covered restaurants and bars, then households. The right holders got bold plus to statistics and additional income, and now Star India has taken a crucial step towards a new audience, especially in the southern regions of India. Only television broadcasts on Star in the 2018 season saw 450 million people (9% growth compared with last year), and the final finals were watched by 173 million (+ 43%). Broadcaster does everything for the appeal of the airs – for example, players constantly give interviews right during the match while on the field. During each game, the rights holder has 47 minutes of advertising time. Star’s revenue for the first season on a five-year contract was about $ 300 million (50% more than the last Sony season) – if the growth rate continues, by the end of the Star agreement it will help out about 4 billion.
- The teams began to work actively with the fans outside the cities where they play. For example, according to Brand Finance, Super Kings remained the most expensive league club, despite the suspension, because they stepped up outside of Chennai and built a history of overcoming difficulties and rebirth, which hooked a wider audience. At the same time, Director of Brand Finance Dario D’Souza notes that the promotion of club brands is still very far from ideal. In his opinion, everyone should add in merchandising, manufacturing licensed products and protecting their own brand. For further financial growth, analysts advise to increase IPL awareness outside India (especially where the Indian Diasporas are great) and, for example, look for franchisees in other countries where cricket is popular.
- At the start of the project, IPL famously introduced the process of local superstars – Bollywood actors. For example, actor and TV presenter Shahrukh Khan (now the sum of subscribers on Instagram, Facebook and Twitter is 80 million) acquired an IPL franchise with partners in 2008 and founded a team in Calcutta. His Calcutta Knights Riders won the IPL twice (2012, 2014), but even before that they began to build the 68,000-strong stadium, the largest in the league. Khan was profitable to promote his club for his audience, and the entire IPL benefited. In one way or another, more than a dozen local celebrities took part in the life of various clubs of the league.
- The league intelligently uses the auction format: at the start of the IPL, eight franchisees were chosen that way, to replace banned clubs; they also announced separate bids – with the right to win a slot in the league for two seasons. The main thing is a few months before each new IPL tournament holds an auction of players: this is the way to rotate the lineups and maintain higher competition. Each club has the right to protect up to three players from last year’s composition; the remaining budget is the board of top managers, coaches and analysts dispose of during the auction. All players (in 2018, 578 cricketers set themselves up, 361 of them were Indians) were divided into baskets according to their status, each with a minimum starting price. The auction starts with the strongest and most expensive, each club can take from 18 to 25 players (on the field – 11), but no more than 8 foreigners (on the field – no more than 4). In January 2018, everyone had $ 70 million for the line-up – regardless of club sponsors and other incomes; the league determines the limit on spending on players the ceiling and the players’ wages themselves grow from year to year.
IPL affects the GDP of all of India. What will happen next?
Both the Cricket Control Council and the Indian authorities, over the past few years, have emphasized that the activities of the IPL have a positive effect, including on the country’s GDP. In 2015, the contribution of the cricket league to India’s GDP was estimated at $ 186 million; in 2017, according to a KPMG survey, the figure increased to 418 million. The Indian Premier League is developing surprisingly fast in the local market: even with occasional serious problems with the image, the IPL leadership managed to maintain significant growth in key auditorium and financial indicators – not only because of the cricket’s mega popularity (there are only five and a half thousand professional players in the country, IPL in one form or another were interested in more than a billion Indians), but also thanks to the quality work in different directions.
Indian media authors often juxtapose IPL with the English Premier League, the NBA, the NHL, the NFL and other ideals of building a business in sports. While in global comparisons, IPL is still inferior, but considering the 11-year history of the league and its growth rates, in the coming seasons we should expect new historical achievements. And when re-signing media and advertising contracts in three or four, it is quite reasonable to count on records.