Share the risks, and the returns

Updated: Mar 31 2007, 07:12am hrs
By the time you read this piece, the dust would have hopefully settled on the tattered expectations of the quintessential Indian cricket fan, his fans in the advertisers, and of course, the rattled community of broadcasters of cricket. We can now start the clean up job and discuss things for the future.

Most advertisers expected India to reach the Super 8. It was therefore natural for all advertisers to have felt cheated after what happened. Having said that, no one promised anything to each other. All assumed and went ahead. Thats one thing that needs to be looked at very closely for the future, and has 4 dimensions:

Reduce risk. Predict better

Cricket is now too big in this country to not be sharing risk and returns on. It could mean getting risks literally ensured at each step, from organizer to the broadcaster to the agency to the advertiser. It could also mean taking help of a new breed of professionals who predict better [Just to clarify, I dont mean the bookies here!].

Smarter deals, with exit clauses or incentives

The deals, for example, between ICC to Sony to Nimbus to agencies and to advertisers, should have had incentives based on output and not just payment based on input. Another factor is to actually pay a premium for assured returns than those with risks.

Rationalise the premium, get real

Cricket currently demands and gets premium of anywhere between 75-125% vis a vis other large genres. Some correction, thanks to this investment going bad, will automatically happen.

Cricket is not for the weak-hearted

Let us now accept that cricket is somewhat like the stock market. There is less place for the weak-hearted [till mutual funds equivalents come in]. There will be highs followed by quick corrections and the long term investors would benefit the most.

The author is MD, India -West & South, Starcom