G_B_ Posted April 9, 2013 Posted April 9, 2013 fair point DM. By my rough estimates the IPL as a general entity (BCCI, franchises) needs about $150 million a season to operate. (that includes players salaries and operational costs like player accommodation umpires etc). As things stand the players and the BCCI appear to be making lots of money. While the franchises though mostly profitable (or near breaking even) are not reaping the benefits to that extent. The motive for an IPL team also differs from team to team. Mumbai Indians are not in the business of making money. Its just a toy for the Ambanis especially for Neeta to be in the spotlight. The same can be said for CSK . If there two franchises for eg post 50 crore losses their owners are not going to bat an eyelid. A $10 million loss to Reliance Industries and Indian Cements. Then you have Royals who always have kept costs low and have always posted a profit. KKR have been extremely well marketed to generated profits.
Crookbond Posted April 9, 2013 Posted April 9, 2013 The question is not about BCCI making money but whether franchisees are making money via "any" means. Even if the franchisees are not making any profit the BCCI would still like to market IPL as a profit making entity. To do that, you need hard concrete numbers. I get your point about different franchisees having different motivations but EOD the profits made by the IPL franchisees are proportional to the viewership times i.e. the viewership has huge impacts on the final profits. Hence, those graphs and the article in Outlook.
G_B_ Posted April 9, 2013 Posted April 9, 2013 The question is not about BCCI making money but whether franchisees are making money via "any" means. Even if the franchisees are not making any profit the BCCI would still like to market IPL as a profit making entity. To do that' date=' you need hard concrete numbers. I get your point about different franchisees having different motivations but EOD the profits made by the IPL franchisees are proportional to the viewership times i.e. the viewership has huge impacts on the final profits. Hence, those graphs and the article in Outlook.[/quote'] I was under the impression that Sony TV already pay the BCCI and franchises "x" amount of revenue per year come rain or shine til 2017. Its basically Sony's headache to make a profit from the adverts? or am i wrong. The issue of broadcast numbers and profitability might be an issue in 2017.
Crookbond Posted April 9, 2013 Posted April 9, 2013 I was under the impression that Sony TV already pay the BCCI and franchises "x" amount of revenue per year come rain or shine til 2017. Its basically Sony's headache to make a profit from the adverts? or am i wrong. The issue of broadcast numbers and profitability might be an issue in 2017. I am not sure. Any source?
G_B_ Posted April 9, 2013 Posted April 9, 2013 I am not sure. Any source? even i am not 100% sure Sony, World Sports Group bag IPL broadcast rights for Rs. 8,200 crore http://www.hindustantimes.com/News-Feed/Cricket/Sony-World-Sports-Group-bag-IPL-broadcast-rights-for-Rs-8-200-crore/Article1-393078.aspx
BeautifulGame Posted April 9, 2013 Posted April 9, 2013 The question is not about BCCI making money but whether franchisees are making money via "any" means. Even if the franchisees are not making any profit the BCCI would still like to market IPL as a profit making entity. To do that' date=' you need hard concrete numbers. I get your point about different franchisees having different motivations but EOD the profits made by the IPL franchisees are proportional to the viewership times i.e. the viewership has huge impacts on the final profits. Hence, those graphs and the article in Outlook.[/quote'] http://articles.economictimes.indiatimes.com/2013-03-24/news/37981298_1_india-cements-ipl-teams-chennai-super-kings
BeautifulGame Posted April 9, 2013 Posted April 9, 2013 Cricket advertising : Looks Good' date= But Could Be A Sticky Wicket http://business.outlookindia.com/article.aspx?284726 Isnt it common sense? No product is going to sustain the initial hype.But whats crucial is they build a solid platform and IPL has successfully built a quality audience base. “While the number of people watching the game has increased, the time spent on watching it has dropped. That is a big concern"—Jigar Rambhia, Client Leader, GroupM Maxus Not really.Its a natural progression that once the hype is over most fans will follow only their teams and hence time spent is bound to drop.Just like in any other league in any sport.But the key is this is a loyal base which can sustained and grown
Crookbond Posted April 9, 2013 Posted April 9, 2013 http://articles.economictimes.indiatimes.com/2013-03-24/news/37981298_1_india-cements-ipl-teams-chennai-super-kings Exactly - proves my point that IPL needs to be a profit making entity on the table.
BeautifulGame Posted April 9, 2013 Posted April 9, 2013 Exactly - proves my point that IPL needs to be a profit making entity on the table. The point is IPL is For good measure, CSK also brings home the bacon. Last year, the franchise added Rs 150 crore to India Cements' top line (up from Rs 70 crore in the first year.) Merchandise is one source of revenue, bringing in Rs 7 crore last year; the target for the current year is Rs 10 crore. "For India Cements, CSK is not just an IPL brand. It's a standalone profitable business venture that has given a new identity to India Cements," says Singh.
Prudent Posted April 9, 2013 Author Posted April 9, 2013 Exactly - proves my point that IPL needs to be a profit making entity on the table. It's true that most of the teams are YET to make profit out of IPL Profits still elude some IPL teams The most profitable franchise, according to the limited data available for this analysis, is the Rajasthan Royals. Its financial prudence is evident in its careful expenditure on player auctions all these years. The holding company, Jaipur IPL Cricket Pvt. Ltd, reported a profit of Rs.5.72 crore in 2010-11. It had reported profit of about Rs.22 crore in each of the previous two financial years, but it is not clear from the Registrars of Companies documents whether there was any one-time income in those periods. On the other hand, Kolkata Knight Riders posted a profit of Rs.10.42 crore in 2011-12. That is a turnaround from the loss of Rs.11.3 crore it reported the previous year. Sahara Adventure Sports Ltd, which owns the Pune Warriors franchise, is profitable as well, but its latest figures are for the 2010-11 financial year. http://www.livemint.com/Consumer/Vx82Oge7kJ5nYt6rylf5FM/Profits-still-elude-some-IPL-teams.html
Crookbond Posted April 9, 2013 Posted April 9, 2013 The point is IPL is Well, such auxiliary profits have never been the main source of revenue. They are like the camphor balls in the urinals - you expect them to be present but it's not the reason you use the urinals. Besides, IPL still needs to be marketed as a franchisee profit making business.
prasadiyer Posted April 9, 2013 Posted April 9, 2013 Well' date=' such auxiliary profits have never been the main source of revenue. They are like the camphor balls in the urinals - you expect them to be present but it's not the reason you use the urinals. Besides, IPL still needs to be marketed as a franchisee profit making business.[/quote'] Love the analogy!:haha:
kubrickian Posted April 10, 2013 Posted April 10, 2013 IPL is still very, very popular but one mistake they did was they shuffled the big players around too much. Team loyalty is important in franchise cricket as there is no national pride involved. Its important you have a fan base that's attached and roots for certain players in the team over a period of time. Once you remove those players from your team, the fan base is also lost. It will again take a while for the fans to become attached to their teams. If they keep shuffling even more, they may lose interest for good. CSK have done this well by sticking to Dhoni, Raina, Vijay, Ashwin, Badrinath and MI as well with Sachin, Harbhajan, Pollard, Rayudu etc. To be honest, Pune and Kochi were the worst thing to happen to IPL because to accommodate them, most players went in to the auction again. It made business sense because players would get paid more and because each of the franchises paid 300+ million dollars. But its also a compromise because they preferred short term money making over the quality of the product.
Mariyam Posted April 10, 2013 Posted April 10, 2013 Plus i do believe TAM ratings are in general based on 6 or 8 metro cities? If true we need better mechanism to calculate the total viewship. The fact is TV sales in India are rising year on year. Especially in tier 3 towns and even villages showing the highest growth rate. I am guessing these people are not counted ? As far as I know, TAM ratings are based only on Mumbai, Delhi, Chennai, Kolkatta, Bangalore, Pune, Hyderabad and Ahmedabad. The results are extrapolated to represent all Urban India. How they do it, I'm not too sure. The main draw back with the way TAM collates data is that they do it on a household basis. Meaning a household with 5 children or a household with none still counts as one entity. And the % increase in households is much lower than the % increase in population in a given urban area. Another draw back is that the TAM data does nto capture viewership is pubs, sports bars, big screens in malls or in movie halls,which these days constitute a substantial percentage of those watching the game.
someone Posted April 10, 2013 Posted April 10, 2013 IPL is still very, very popular but one mistake they did was they shuffled the big players around too much. Team loyalty is important in franchise cricket as there is no national pride involved. Loyalty is great but it has to start by the fans. But when there is no fan loyalty in IPL, it's hard to get team loyalty. Fans need to be loyal to their teams firstly. Although, it's never good to see players getting greedy over money and trying to move to another team. Such as Manish Pandey or Jadeja.
G_B_ Posted April 10, 2013 Posted April 10, 2013 As far as I know, TAM ratings are based only on Mumbai, Delhi, Chennai, Kolkatta, Bangalore, Pune, Hyderabad and Ahmedabad. The results are extrapolated to represent all Urban India. How they do it, I'm not too sure. The main draw back with the way TAM collates data is that they do it on a household basis. Meaning a household with 5 children or a household with none still counts as one entity. And the % increase in households is much lower than the % increase in population in a given urban area. Another draw back is that the TAM data does nto capture viewership is pubs, sports bars, big screens in malls or in movie halls,which these days constitute a substantial percentage of those watching the game. thanks for the info. That indeed is a very poor method of calculation.
Crookbond Posted April 10, 2013 Posted April 10, 2013 As far as I know, TAM ratings are based only on Mumbai, Delhi, Chennai, Kolkatta, Bangalore, Pune, Hyderabad and Ahmedabad. The results are extrapolated to represent all Urban India. How they do it, I'm not too sure. The main draw back with the way TAM collates data is that they do it on a household basis. Meaning a household with 5 children or a household with none still counts as one entity. And the % increase in households is much lower than the % increase in population in a given urban area. Another draw back is that the TAM data does nto capture viewership is pubs, sports bars, big screens in malls or in movie halls,which these days constitute a substantial percentage of those watching the game. thanks for the info. That indeed is a very poor method of calculation. Is there a better way (practical not idealistic) to calculate?
G_B_ Posted April 10, 2013 Posted April 10, 2013 Is there a better way (practical not idealistic) to calculate? how about we use the % of households which subscribe to Sony channel showing the IPL? Or at the very least they expand the number of cities they measure and maybe include the top 50 metropolitan areas in India. Because I visit Nashik on a regular basis on my way to Dhule. There people watch the IPL a lot more than major cities. They watch TV more than the usual tier 1 and tier 2 cities. If i were to make an estimate i would say 25% of Indian households watch the IPL based on a TV ownership rate of 47% in the 2011 census. http://en.wikipedia.org/wiki/Indian_states_ranking_by_television_ownership
Crookbond Posted April 10, 2013 Posted April 10, 2013 how about we use the % of households which subscribe to Sony channel showing the IPL? Or at the very least they expand the number of cities they measure and maybe include the top 50 metropolitan areas in India. Because I visit Nashik on a regular basis on my way to Dhule. There people watch the IPL a lot more than major cities. They watch TV more than the usual tier 1 and tier 2 cities. If i were to make an estimate i would say 25% of Indian households watch the IPL based on a TV ownership rate of 47% in the 2011 census. http://en.wikipedia.org/wiki/Indian_states_ranking_by_television_ownership Before we go further, do we understand how TAM calculates it's ratings? Currently, we have chosen to believe what Mariyam says. A source would be nice.
Mariyam Posted April 11, 2013 Posted April 11, 2013 Loyalty is great but it has to start by the fans. But when there is no fan loyalty in IPL, it's hard to get team loyalty. Fans need to be loyal to their teams firstly. Although, it's never good to see players getting greedy over money and trying to move to another team. Such as Manish Pandey or Jadeja. If it were a 'pure' sport, then player loyalty would have some sort of an emotional connect with the home fans. But IPL is beyond, just sport. It is sports+ entertainment+a lot of intentionally generated controversy. Its understandable that loyalty doesn't count for much here. Think of it like a movie. Just because YRF decide not to cast SRK in their upcoming venture or RGV doesn't cast Urmila Matondkar or Ekta Kapoor doesn't cast Tushar in her latest, wouldn't make a person stay away from the said movies.
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