IPL is not just a tournament. It is also a commercial venture whose success depends on its performance on TV. While all the attention, so far, has remained focussed on those on the field, it is Team MSM which has ensured that viewers and advertisers keep coming back to the game every year
The final match of the fifth season of the Indian Premier League (IPL), the twenty-twenty cricket tournament of the Board of Control for Cricket in India (BCCI) will live on in the memories of IPL fans forever. In this match, fortunes were reversed and favourites Chennai Super Kings had to eat humble pie, thanks to an outstanding 89-run innings by Manvinder Bisla of Kolkata Knight Riders. Until the last three balls, the audience was in a state of heightened suspense. The match could go either way. And then it did. The underdogs won. Despite all the doomsday prophecies, the IPL final earned a television rating of 8.92 and generated more than R800 crore for television broadcaster Multi Screen Media (MSM), which holds the rights to the series till 2017.
Nearly two months have elapsed since that memorable evening. That is a long enough period for the euphoria to have settled down, allowing us to analyse and understand how the fifth season of the IPL has played out, on field and off field, and especially on the television screen, and identify the heroes who made it possible. While names such as Lalit Modi, N Srinivasan and Rajiv Shukla may come to mind immediately, there has been another team that has quietly worked behind the scenes to draw in the television audiences, and advertisers ? the main pillars on whose shoulders the success of IPL rests. The Multi Screen Media team, led by CEO Man Jit Singh and president, network sales, licensing and telephony, Rohit Gupta, have been the chief architects of IPL?s success story on television. IPL?s success also reversed MSM’s fortunes in the bargain. Brandwagon caught up with the team that gets little time to rest after the closing ceremony every year. Once the winners have been announced and felicitated, it is time to take stock of their own gains and losses and after a short break, the team gets back to ready itself for the next season.
?July is the time we breathe easy,? says Gupta. ?By August-September, we start planning for the next edition of the IPL. We begin our talks with media buying agencies and sponsors. We try and get a sense of the market and the kind of demand that exists. And the process culminates only by June next year — after the series ends,? he says.
IPL showcased some of the best cricket for India this year. The fate of nearly 20 games came down to the last two or three balls. ?In spite of reports of decreased demand, we managed to keep our rates at R5 lakh (for a ten-second ad slot) and have sold our last-minute inventory at R8-10 lakh (for a 10-second slot). At the end of the day, this is a premium property. Everybody can’t afford to be in,? he says.
The IPL, they say, is a juggernaut. Not just of emotions, but of big money and multiple stakeholders.
According to brand valuation consultancy Brand Finance Plc, the IPL today is valued at $2.92 billion, but it is a step back from $3.67 billion in 2011. The firm estimates that the IPL was valued at $4.13 billion in 2010. In Brand Finance?s estimation, the IPL today is closest to the 2009 levels when it was estimated at $2 billion. M Unnikrishnan, global strategy director of Brand Finance says that the IPL today is $1 billion poorer and that the proverbial golden goose is being systematically gutted. ?The seemingly never-ending series of governance and transparency lapses have contributed to the rapidly declining brand value of IPL. By brand value, we mean the commercial sustainability of IPL or the value in the long run that this iconic property could deliver for all stakeholders. It will not be too long before IPL slips to its benchmark value of $2 billion in 2009, putting the whole ecosystem and the value creation of the franchisees under intense pressure,? he said.
Gupta of MSM, however, is not fazed by reports released by audit firms, media buying agencies or consultancies. ?The television broadcast rights of the IPL have been the most lucrative source of revenue. We had witnessed similar scepticism when the IPL was shifted to South Africa (season 2). Everyone had written off the series. But hats off to the BCCI for making it profitable, and keeping the brand alive. We (between Season 2 and 3) ramped up our rates big time. We virtually doubled our yields.? Gupta notes that irrespective of what happens in other parts of the IPL universe, the broadcast streams will always bring in money. There may be only a 10% variation in viewership, he says.
It seems like MSM has been riding the storm forever, but only to come out victorious. MSM?s adventure with the IPL began in January 2008, when it first acquired the rights to broadcast the series. In March 2009, BCCI terminated that deal and gave the rights to WSG Mauritius for 2009-17. Following that, MSM entered into a commercial negotiation with WSG Mauritius to get back the rights, paying it a facilitation fee of R425 crore.
MSM chief executive Man Jit Singh maintains that there will always be advertisers who buy large chunks of cricket. He admits that a large part of MSM?s revenues come from the IPL, and the success of the series has been followed by further good news with parent company Sony Pictures Television (SPT) acquiring a a 32% stake in MSM for $271 million, which gave minority investors a timely exit. The deal took Sony Picture?s stake in the venture to 94%. ?Obviously, our parent has enough faith in this network in order to put this kind of investment on its books. Also, it gives us enough freedom to make long term investments in this market, without worrying about our Indian investors.?
Singh has no doubts about the success of the IPL.?Cricket is the biggest sport in India. If you looked at the packed stadiums this year, you can see how the property is building on its own strengths. This despite the economy being the way it is. We expect the economy to fully recover by the end of the year or beginning next year when government policies kick in. I don?t expect any reluctance at all from clients for next year?s IPL.? Singh admits that the property is so big already, that it?s a puzzle to make it bigger. The network will continue what its been doing, said Singh. It will pump in entertainment, retain high rates and provide a conducive platform for companies to launch new brands.
Gupta has, in a span of ten years with the channel, been a part of two big cricket properties — World Cup and the IPL. ?I joined MSM in 2002, after quitting my job at Xerox where I had been since 1986. Sony (MSM?s previous avatar) had just bagged the World Cup rights and they wanted somebody to approach it with some fresh, out-of-the-box thinking. People had written them off as a network, and they had paid a lot for these rights. My challenge was to bring in rates — at least four times of what was charged by India cricket then,? says Gupta. ?We were not able to hold onto the World Cup rights thereafter, but aggressively bid for IPL which is the shorter format of the game. Again, our challenge was to sell it at the price India cricket was being sold at, without a single ball having been bowled.?
Comparatively, the IPL in the beginning was a tougher property to market, as per him. Initially, it came with the baggage of club cricket — another version of the jaded Ranji Trophy.
Singh says that it was an uphill task for his ad sales team headed by Gupta. ?When the IPL was conceived, it was seen as a league structure which had never been tried in India. Some comparisons were made with the Ranji trophy, which has not been very popular in India. As a network, we decided to try the unique combination of cricket and Bollywood ? but that had its own share of sceptics too,? says Singh.
Gupta too recalls the initial doubts and worries on the property. ?I think there was a long list of doomsday prophecies. India will only want to watch men in blue. This is a shorter format which dilutes cricket. Nobody wants club cricket. But having dealt with the World Cup, we knew that this was the format we wanted to back. When you look at how cricket had panned out from 2002-07 when we had the World Cup, we saw that there was a drop in interest in viewership, as far as one-day internationals (ODIs) were concerned. The 8-hour format was too long.? In sharp contrast, the IPL was fresh, exciting and most importantly, short, says Gupta.
Over the years, IPL has come out with many interesting packages for advertisers. In the first season, it gave brands exclusivity and did not take more than one product in each category as advertiser. But due to huge demand, it was unable to maintain that and threw the floodgates open by the second season. By the third season, it brought in packages where advertisers could go in for alternate matches. In the last season — anticipating the liquidity constraints faced by advertisers, it allowed smaller 20-match packages.
Mona Jain, chief executive of VivaKi Exchange who?s been on the negotiating table with MSM, admits that the network has done a fabulous job so far in marketing the property well. ?If you ask me, it?s the spot buys that have got the IPL to where it is. This, in spite of BCCI placing many restrictions on them and not giving them a free hand with the feed.? Jain, however, is quick to add that changing times require changes in approach. ?I think they must keep track of market realities when they decide on rates,? she said. So far, they?ve been lucky, she said. They?ve had loyal sponsors.
Indranil Das Blah, chief executive of KWAN Entertainment & Marketing Media Solutions, says that the IPL is one of the hottest media properties today. ?I am confused as to who played a greater role in this success story – whether it was Lalit Modi, the BCCI, the franchises or the television broadcaster MSM. Or maybe it was a concerted effort by all of them,? he said. ?MSM, in particular, has kept this property alive, by keeping the rates high. Else, it would have diluted the equity of the property.?
Blah says that the network had aggressively gone after the IPL, in spite of a lot of scepticism on the part of the advertising industry. They took a big gamble. ?But you don?t get to make big money without taking some big risks. As long as the IPL gets them return on investment, brands will continue to advertise. But the IPL also needs to keep the interests of its various stakeholders in mind. Try not to bring in too much clutter, or too many ad breaks. Don?t throw the floodgates open. Maintain the premium nature of the property,? he urged.