As the Indian Premiere League (IPL) T-20 series is entering its eighth edition, it is strongly emerging as a promising business prospect for the cricket stakeholders. How far has the IPL succeeded and how can there be more revenue streams for the franchisees in the game, explains Raghu Iyer, CEO, Rajasthan Royals, representing the pink city, Jaipur. Edited Excerpts:
When we started the IPL, no body was sure whether people are going to watch Delhi-Mumbai match or not. But over a period it has succeeded and to that extent that everyone is making decent amount of revenue growth on sponsorship. But one more thing that is changing is ticket revenue as well. With improved stadium infrastructure, that is bringing a significant amount of revenue now. The third important revenue is merchandising sales. That has great potential, but it hasn't grown that much. It has a potential to grow exponentially.
How important is merchandise sale in the revenues?
With merchandising, one can multiply revenues. The more I popularise my brand, I can sell it to more people and generate more revenue. That is what we and many other teams are looking at getting this right. That's what brings the business growth that will amplify the revenues. The bulk of the revenue comes from Central revenue and trading of players. Of the total revenues, central revenue is 50 per cent, 30 per cent is sponsorship, 12-15 per cent is ticketing revenue and balance is merchandise and others. We are constantly doing efforts to increase merchandise share in our revenues. That is one of the things that we will focus on. How do I make somebody like my team irrespective of the performance. The age group of 7-14 are our right target. At this age people become a fan. Also, an extended season for IPL would help. In other countries like EPL have an extended season of 6-8 months, while IPL is of just two months. When it is for an extended period, the viewers start associating the brand with teams.
The critiques of IPL term it a platform for betting. What is your argument?
If you see the ecosystem around the IPL, everybody benefits. Betting was unfortunate and it has dented the brand of IPL globally. In the first couple of seasons people have not been aware of the massiveness of this project. Suddenly in the year three, it became the world's third most popular league. Today, it is among the top 6/7 leagues in the world. So it has gained that amount of trajectory of growth. If you see a macro picture of the entire eco-system of the IPL, you see the overall stakeholders benefiting. Domestic cricketers, some of them were struggling, but they get decent pay here. The other stakeholder is television broadcasters, sponsors, it works for their viewership, the sponsors of the teams also have something productive there. And the biggest stakeholder is the fans. You see the stadiums all through the 50-60 matches all of them are 80-90 per cent full. So if you look at the macro picture, it is positive.
Is IPL more a business than cricket?
IPL is definitely business. For all these teams it is business. But the quality of cricket is much serious. Because when you have paid somebody million or two million dollars. The 20-20 format against the one-day format which is much slower. This is why one thinks that it is not that kind of a cricket. But over the years, 20-20 cricket has a way forward. Once the glamour thing goes out you realise it is actually business. Then there are other businesses growing too like event management industry. It gives employment. It is a business of cricket. IPL is surely business and there is nothing wrong in it. What has the IPL done is that 8 other Leagues have mushroomed. ISL is one, Kabaddi is there. So one needs to give IPL the credit where it is due.