In its Fourth Edition now, The IPL Continues to Grow even though Franchises Need to look for and Exploit Alternative Revenue Streams
While IPL has continued to grow on most parameters of success and popularity, lower TRPs for many of its recent matches should make the organisers sit up and take corrective action. According to TAM data, the average TV rating for 2011 IPL season hit rock-bottom at 3.84 as compared to the previous three seasons. It is expected that ad-rates for the next season could take a plunge as viewers’ interest appears to wane with every passing edition of the tournament. “IPL franchisee owners need to create alternative source of income with a view to expand their IPL mother umbrella if they want to stay profitable in the long-run. But even before that, the teams should focus on creating a loyal follower-base that will eventually support the new sources,” says brand expert Harish Bijoor.
As far as the IPL pricing structure is concern, the tournament is predicted to bring the Board of Control for Cricket in India an income of approximately $1.6 billion, over a period of five to ten years. All of these revenues are directed to a central pool, 40% of which will go to IPL itself, 54% to franchisees and 6% as prize money. The money is to be distributed in these proportions until 2017, after which the share of IPL will be 50%, franchisees 45% and prize money 5%.
A research by IIFL, a leading Indian financial services player, points out that the most profitable franchises will earn Rs 1.08 billion, spend Rs 650 million, thus making a profit of Rs 430 million while the least profitable will earn Rs 1.14 billion and spend Rs 950 million, making a profit of Rs 180 million. It is also felt that IPL continues to be a significant contributor to the bottom line of the team-owning companies. Analysts estimate that the respective IPL teams contribute 5-10% of profits for GMR, United Spirits, India Cements and Deccan Chronicle.
In owning a piece of the IPL, which is still far from realising its potential, these team-owners, like India Cements, should let their core business piggyback on the visibility provided by the tournament. As the sources of income for teams are guaranteed and stable, and avenues for expenditure limited and fixed, teams- owners can keep going without bleeding money. Until a few years from now, when, hopefully, the time will be ripe to go for a killing and mint a fortune.
Read more....
As far as the IPL pricing structure is concern, the tournament is predicted to bring the Board of Control for Cricket in India an income of approximately $1.6 billion, over a period of five to ten years. All of these revenues are directed to a central pool, 40% of which will go to IPL itself, 54% to franchisees and 6% as prize money. The money is to be distributed in these proportions until 2017, after which the share of IPL will be 50%, franchisees 45% and prize money 5%.
A research by IIFL, a leading Indian financial services player, points out that the most profitable franchises will earn Rs 1.08 billion, spend Rs 650 million, thus making a profit of Rs 430 million while the least profitable will earn Rs 1.14 billion and spend Rs 950 million, making a profit of Rs 180 million. It is also felt that IPL continues to be a significant contributor to the bottom line of the team-owning companies. Analysts estimate that the respective IPL teams contribute 5-10% of profits for GMR, United Spirits, India Cements and Deccan Chronicle.
In owning a piece of the IPL, which is still far from realising its potential, these team-owners, like India Cements, should let their core business piggyback on the visibility provided by the tournament. As the sources of income for teams are guaranteed and stable, and avenues for expenditure limited and fixed, teams- owners can keep going without bleeding money. Until a few years from now, when, hopefully, the time will be ripe to go for a killing and mint a fortune.
Read more....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
