King Posted May 30, 2008 Share Posted May 30, 2008 IPL doubles BCCI profit, set to top ad rates for T20 WC final Many eyebrows were raised and heads shaken when it first emerged how much the Indian Premier League franchisees were shelling out. Would they be able to recover their huge investments, asked skeptics. Well, it looks like the franchisees will be having the last laugh - all the way to the bank. The whopping success of IPL has not only ensured that teams like Jaipur, Kolkata and Mohali are likely to break even in the first year itself, but also transformed the fortunes of its telecaster Sony Set Max, says a report prepared by the equity research division of Alchemy Shares and Stock Brokers. The biggest gainer, though, is arguably BCCI - which is projected to rake in a profit of Rs 350 crore from IPL in the first year itself. This would be more than BCCI's profit of Rs 235 crore for all of 2007. In all, IPL will bring revenue of Rs 1,200 crore a year into cricket, more than double the government's entire sports budget of Rs 490 crore. Set Max, too, seems to have a winner on its hands. The channel's revenue marketshare has risen from a pre-IPL level of 5.7% to 28.8%, says the report. Its share of prime time has gone up to 29%, higher than the cumulative marketshare of the top nine Hindi general entertainment channels. From next year, Sony is projected to gross about Rs 650 crore in advertising revenue for about 45 days of IPL, which would be 7% of the entire estimated TV ad revenue of around Rs 9,000 crore for the whole year. Ad rates for 10-second spots, which were at Rs 2 lakh per 10 seconds at the start of the tournament, have climbed rapidly to Rs 5 lakh and look set to rise further to Rs 10 lakh for the final, says the report. This would be even more than the Rs 8 lakh per 10 second rate for the nailbiting T20 World Cup final between India and Pakistan last year. Interestingly, the TRP viewership rating of the World Cup final was 9.21. Arnab Mitra, who prepared the Alchemy report, says the TRP rating of the first few IPL matches was around 8.2, which later fell but remained over 5 - higher than any other program running on TV. IPL's success has also rubbed off on the franchisees. According to the report, teams like Jaipur, Kolkata and Mohali, which have not spent much on franchisee fees, are likely to break even in the first year itself. Kolkata Knight Riders is projected to make an operating profit of Rs 15 crore due to its huge earnings from local sponsorship, amounting to Rs 32 crore, and gate ticket sales of Rs 20 crore. Similarly, Team Jaipur will also be making a profit of Rs 10 crore. This is mainly because it bid a mere Rs 27 crore as the annual franchisee fee, almost half the sums bid by the UB group for Bangalore and by Reliance for Mumbai. However, even the loss-making teams are expected to earn revenue ranging from Rs 48 crore-76 crore. With cash inflows into cricket getting ever bigger in India, expect this figure to rise further. Valuations will rise correspondingly. In the international sports market, a team is normally valued at three to four times of its revenue. As growth prospects in India are much brighter, an IPL team could get even higher multiples. Link to comment Share on other sites More sharing options...
printex Posted May 30, 2008 Share Posted May 30, 2008 more early retirements coming soon Link to comment Share on other sites More sharing options...
King Posted May 30, 2008 Author Share Posted May 30, 2008 Like it or hate it IPL is a fantastic business model. This opportunity to put together a IPL like tourney could have been done by the likes of ACB, ECB and the rest but they just didn't seem to have the business acumen to take up a tourney of this large scale and make it a success. Looking back at the world cup hosted by ICC, it was full of controversy and bad management. So much so that the umpires screwed the finals of the world cup as well. Bhajji's incidence clearly shows that IPL has been managed quite well even in terms of logistics. Warne and Ganguly both were dealt with when they went public with their war of words. I can bet my bottom dollar ICC would have done nothing about it if similar incident transpired during a world cup or something. I think IPL has been managed really well by the BCCI. Sure BCCI may not be the best organization in the world but neither is olympics comittee. The business model that BCCI came up with is fantastic. The ACB and ECB were sceptical at the start and were questioning the returns at first. Now they have taken more of a custodians of pure cricket tone by scoffing off at Twenty20s. The matter of fact is that the Twenty20s were started by ECB as usual but Indians managed and organized it better. Even cricket was found by England but we all know who made it popular and more professional in the very first place. I'm glad BCCI came up with something like IPL, it's yet another example of why cricket decisions should not rest with the ECB administrators. India and Australia can take even test cricket to a different level. For that to happen ECB officials should not be allowed anywhere near ICC admin team. They are more of a bottleneck and are very old fashioned. There are several areas in cricket that needs to be improved and that'll happen only if good heads get involved. At this point in time ICC is a white elephant that needs tonnes of funds to keep itself going but its contributions are too little. Link to comment Share on other sites More sharing options...
flamy Posted May 30, 2008 Share Posted May 30, 2008 ^^ Great post. For all the babus in the BCCI, IPL has been a great success. I, somehow feel though, IPL ran itself rather than anything special by BCCI. Link to comment Share on other sites More sharing options...
DomainK Posted May 30, 2008 Share Posted May 30, 2008 Like it or hate it IPL is a fantastic business model. This opportunity to put together a IPL like tourney could have been done by the likes of ACB, ECB and the rest but they just didn't seem to have the business acumen to take up a tourney of this large scale and make it a success. Looking back at the world cup hosted by ICC, it was full of controversy and bad management. So much so that the umpires screwed the finals of the world cup as well. Bhajji's incidence clearly shows that IPL has been managed quite well even in terms of logistics. Warne and Ganguly both were dealt with when they went public with their war of words. I can bet my bottom dollar ICC would have done nothing about it if similar incident transpired during a world cup or something. I think IPL has been managed really well by the BCCI. Sure BCCI may not be the best organization in the world but neither is olympics comittee. The business model that BCCI came up with is fantastic. The ACB and ECB were sceptical at the start and were questioning the returns at first. Now they have taken more of a custodians of pure cricket tone by scoffing off at Twenty20s. The matter of fact is that the Twenty20s were started by ECB as usual but Indians managed and organized it better. Even cricket was found by England but we all know who made it popular and more professional in the very first place. I'm glad BCCI came up with something like IPL, it's yet another example of why cricket decisions should not rest with the ECB administrators. India and Australia can take even test cricket to a different level. For that to happen ECB officials should not be allowed anywhere near ICC admin team. They are more of a bottleneck and are very old fashioned. There are several areas in cricket that needs to be improved and that'll happen only if good heads get involved. At this point in time ICC is a white elephant that needs tonnes of funds to keep itself going but its contributions are too little. Very well said. Fully agree.:two_thumbs_up: Link to comment Share on other sites More sharing options...
The Outsider Posted May 30, 2008 Share Posted May 30, 2008 India and Australia can take even test cricket to a different level. For that to happen ECB officials should not be allowed anywhere near ICC admin team. They are more of a bottleneck and are very old fashioned. There are several areas in cricket that needs to be improved and that'll happen only if good heads get involved. At this point in time ICC is a white elephant that needs tonnes of funds to keep itself going but its contributions are too little. Agree with most of your post Ravi except the above part. The only level to which India are going to and have been taking test cricket is down - shortening the lengths of test series, running down their best players in ODIs and T20s, and providing the worst cricket pitches for test matches in the world. Could anyone have dreamed of a two test series between England and India? Is there any other country in the world whose entire fast bowling arsenal is found in hospitals at times of a crucial test match? Is there any other country in the world where test match pitches are so poor that even in these days of aggressive batting we struggle to produce results? Pakistan perhaps, but are those the standards we want to meet up to? ECB might be faulted for a lot of things but certainly not hurting test cricket as much as BCCI has done. Every single tour it's the ECB which calls for more tests but BCCI shows it's money pumped muscles and gives us the ridiculous spectacle of 7 ODI series against England. BCCI, T20, IPL - this combination is well on it's way to murdering test cricket. Link to comment Share on other sites More sharing options...
Gambit Posted May 30, 2008 Share Posted May 30, 2008 ^^ IIRC ECB requested a 2 test series, not BCCI. Link to comment Share on other sites More sharing options...
The Outsider Posted May 30, 2008 Share Posted May 30, 2008 ^^ IIRC ECB requested a 2 test series, not BCCI. I think that's because ECB has an agreement with it's players that the only away tours they'll take during Christmas are Australia and South Africa, so the tour had to be shortened and the BCCI did not want to cut any of the 7 ODIs - that's right 7 of them again after the 2 boring ODI series we have had with England in succession. Link to comment Share on other sites More sharing options...
Temujin Khaghan Posted May 30, 2008 Share Posted May 30, 2008 when are our stadiums going to look as good as the ones down under. Link to comment Share on other sites More sharing options...
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