June 11, 2013

The IPL's credibility is hit, but what about its revenue?

Brand experts believe the fixing scandal has affected the value of the league and how advertisers will view it, but that it hasn't threatened its viewership

The recent spate of bad news related to the IPL has raised questions about its viability and credibility, perhaps even putting into doubt its immediate future. The IPL's penchant for controversy was long seen as a plus - on the grounds that any publicity was good publicity - and even its strength. But the gravity of the current situation - allegations that some players and team owners have indulged in corrupt practices - is unlike anything the league has had to tackle so far.

"The brand has definitely been damaged," says Samir Phadnis, director and chief operating officer of Next Level Media Communication, a PR firm that operates in sport. Phadnis says he "won't be surprised - and I am sure most of the fans too won't be - if one of the major sponsors pulls out" as a fallout of the controversy.

Santosh Desai, the chief executive officer of Future Brands, a brand management firm, stresses on the fact that this time the allegations have been made against not just players but also an umpire and team owners, and says the corruption scandal gets "into the heart of IPL". "So potentially it can upset the viewer or a sponsor so much that he can lose his confidence in the product. One party being set aside doesn't affect the overall brand much, but if many stakeholders are offended, the credibility of the brand is bound to suffer in the long run."

While most experts are convinced that the brand of the IPL will take a severe hit, not many feel it will affect the viewership. "Even in the middle of all the arrests and accusations, the IPL 6 final was sold out and the ratings were almost as much as the previous seasons," says Indranil Das Blah, chief operating officer of CAA Kwan, a talent management agency.

While last year's final had a rating of 8.92, this year's had 6.9, though part of the drop is attributed to the digitisation of the cable-TV business in Indian cities, a work in progress that left many viewers without access to subscription channels. Reports in Hindustan Times state that the revenues for the official broadcaster, MSM, rose nearly 50% this year to Rs 900 crore (approx US$154 million), a change from 2012 when revenues were calculated at Rs 650 crore (approx $111 million). The newspaper reported the change was driven by the broadcaster lowering ad rates by 20%.

The contrast between the IPL's image taking a knock while ratings and ad revenues stayed high is guided by factors like ad spots being paid for in advance and news of the spot-fixing scandal breaking only ten days before the scheduled close of the league. The IPL has been able

Amol Karhadkar is a correspondent at ESPNcricinfo

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