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The controversies plaguing the IPL have done little to affect the tournament's brand value. In to it's fourth season, the league has become hot property
April 9, 2011
The gravy train that is the IPL continues to hum along, seemingly untouched not only by the many controversies and court cases that have swirled around the league over the last year but also the glut of cricket on the subcontinent over the past few weeks. Advertisers and sponsors remain undeterred by former IPL chairman Lalit Modi's alleged financial irregularities or the expulsion and subsequent court-ordered readmission of two franchises, with Sony Entertainment Television (SET) selling out its ad inventory and the league and its franchises signing on new sponsors.
The rush to be associated with the IPL, despite all the question marks, is a sign of just how hot a property it has become for those wishing to reach the Indian consumer.
"The fact that IPL has 11 sponsors as against nine of last season, and these sponsors signed up for the IPL in the midst of all the controversies and court cases indicates that the advertisers see clear value and benefit of association with IPL," Harsha Joshi, chief operating officer of Madison Media, told ESPNcricinfo.
The league has not escaped completely unscathed, however, from all the turmoil. Brand Finance, a firm that specialises in brand valuations, has pegged the value of the IPL at $3.67 billion in its latest report, down from the $4.13 billion the year before.
"The IPL juggernaut has hit a speed breaker with an erosion of $460 million of its long-term value," M Unni Krishnan, the managing director of Brand Finance, India, said in the report. "IPL's sustainability will largely depend on infusing governance policies to align all the stakeholders towards win-win relationships and thereby preserving the value in the long run."
At the same time, the report states that the "IPL remains a robust asset despite the challenges" and while the overhaul value of the league has shrunk, the value of the eight original franchises has risen from $333 million in 2010 to $355 million.
Perhaps proving the old adage that there is no such thing as bad publicity, the many controversies should also spur viewer interest in the league according to Sudha Natrajan, deputy chief executive office, Lintas Media Group. "The IPL is now an established property and the recent controversies are unlikely to impact the brand," Natrajan said. "It was evident from the interest level the auction of players has generated."
|"The fact that IPL has 11 sponsors as against nine of last season, and these sponsors signed up for the IPL in the midst of all the controversies and court cases indicates that the advertisers see clear value and benefit of association with IPL." Harsha Joshi, chief operating officer of Madison Media|
A number of new advertisers have jumped on board this year, the most high profile of which is German car manufacturer Volkswagen, who became an official partner of the league. Meanwhile cola rivals Coke and Pepsi have blanketed the franchises, partnering with five teams each in their own game of one-upmanship. Even Rajasthan Royals, one of the two teams to have been expelled from the tournament before a court order reinstated them, has seen its number of sponsors grow from 10 in 2010 to 16.
The desire to associate with the league is so strong that the IPL recently decided to allow teams the option - relatively unique in sport - of having different sponsors on their jerseys for home and away matches so more companies could have a slice of the IPL pie. "A lot of sponsors are interested in participating in IPL and the premier sponsorship opportunities are far more expensive at present," Sundar Raman, the IPL's chief operating officer, was quoted as saying in the financial daily Mint.
However, the decision has reportedly not gone down well with some existing sponsors, who fear it would weaken their association with their respective teams. Ravi Chawla, president for the lubes business of Gulf Oil Corp. Ltd - who recently signed a sponsorship deal with Chennai Super Kings - told the same paper that the blanked TV coverage negates the concept of "away" games. "Ultimately, it's a television match and the brand is associated with the team. Wherever you are playing in India, it is on television."
The 2011 IPL will also have ten teams competing for the trophy for the first time, up from eight the previous three years. The addition of two new teams -Pune Warriors and Kochi Tuskers - has also generated more interest in the league by creating new fan bases.
This demand has naturally been a boon for Multi Screen Media (MSM), which owns SET, the Indian broadcast rights holder, which televises the games on its entertainment channel SET Max. MSM expects to generate revenues in the region of Rs 10 billion from the 2011 tournament, an increase of about 25% over last season. It has already sold its entire ad inventory of 2,500 second per match, with 10-second spots going for as much as Rs 6.5 lakhs a pop.
"The IPL delivers consistent ratings and reach," Rohit Gupta, president of MSM Screen Media, told ESPNcricinfo. "From a brand perspective, it delivers very well. That is why advertisers like it. The key thing is consistency in ratings. If you look at the World Cup, across 49 games, the nine India games got huge ratings and advertisers but the other games did not."
The IPL's existing advantages - a family-friendly format, the way it is packaged as primetime entertainment and its appeal to women and children - are now joined by India's successful World Cup campaign which, Gupta believes, will add to interest in the IPL rather than result in a case of cricket burnout.
"Every time the Indian team does well, it has a positive impact," Gupta said. "There are no controversies around anybody. Everybody is on a high. All the players go in with all the positives when they play for their IPL teams. And from a consumer perspective, people love to see the India players play for their IPL teams."
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