Business – Q&A;Lalit Modi (the T20 league’s chairman and commissioner, and VP of the Board of Control for Cricket in India (BCCI)
Sponsorship of domestic cricket may be tottering, but one of the world’s most powerful brands – IPL — with an estimated valuation of $1.6 billion
– is on a high, led by Lalit Modi (the T20 league’s chairman and commissioner, and VP of the Board of Control for Cricket in India (BCCI). Despite the so-called slowdown, the eight IPL franchisee teams forked out US $7.65 million for 17 new players earlier this year.
The BCCI managed to sell broadcast rights to Sony Entertainment and IPL global media rights holder World Sports Group (WSG) for $1.63 billion (Rs 8,200 crore) for nine years — the biggest-ever deal in Indian sports history. Broadcaster ESPN Star Sports paid $975 million for exclusive global commercial rights for the T20 Champions League for a 10-year period – the highest cricket tournament by value on a per game basis. Modi spoke to ET about IPL’s global prospects, valuation, and controversies. Excerpts.
IPL franchisees are planning an association. Your comment?
They are independent bodies and are free to do what they think is appropriate for themselves.
It is believed that IPL is worth $1.65 billon now, and is among the five most valuable sports properties. What’s your vision for the IPL in terms of valuations?
If I remember accurately, Forbes recently called IPL the world’s ‘hottest sports league’. That accolade is far greater than any valuation. What IPL has achieved in monetary terms and valuations would be grave injustice to the league. I personally believe that player auctions, where free market forces decide the worth of individual players, could be summed up as historic.
Corporate India is convinced about the product and revenue model and has shown appetite and passion for cricket. IPL is the best thing to happen to grassroots domestic cricket. I mean where else could a domestic cricketer play with the best in the world, learn from the best coaches and have the best infrastructure to hone their skills?
That is the achievement of IPL and how can you put a value to that?
My vision is to grow IPL into a global brand — we would be the first global brand that has emerged from India and set new trends. To some extent, the sudden move to South Africa helped facilitate the metamorphosis of IPL into a global brand faster than we had planned. The popularity of the league will only grow globally as the broadcast footprint increases. A case-in-point being the recent Champions League. Then there’s the option of taking the IPL international through a possible second season in a calendar year.
There’s speculation of an IPO being floated for IPL. Is it likely to happen in the next 1-2 years?
No, why would the IPL undertake an IPO? A few franchisees might undertake some methods of fund-raising to enhance their sporting franchise and those could range from selling stakes in their respective teams to IPOs. But as far as BCCI and IPL are concerned, we simply don’t need funds. The IPL is a BCCI League and will continue to be one.
The recent Champions League generated very low TRPs and advertisers are unhappy they did not get their money’s worth. Your comment?
We have always maintained that the Champions League format was new and will emerge as the ultimate platform for club and domestic cricketers. Having said that, I still believe the TRP’s were not as bad as were made out to be. TAM’s ratings report for the first five matches of the inaugural Champions League garnered strong viewership across all markets in India for the three IPL teams.
TRPs for matches involving even Trinidad & Tobago teams were inspiring, which showed that viewers liked good cricket being played regardless of who was playing. I’m certain as this tournament grows, it will become one of the premier events on the cricketing calendar.
By when do you expect valuations of Champions League to reach critical mass?
The Twenty20 format has struck a chord with people across the globe and new audiences are attracted each day to cricket even as I write this. Frankly, there was no better time than this year to unveil the new format of Champions League. It has taken the development of the game to its logical next step by extending an invitation to clubs and leagues.
I cannot recall a time when domestic cricketers the world over have had it much better. CLT20 presents an opportunity to expand the game into new markets which were previously thought impossible – USA, China and Europe. The possibilities with CLT20 are infinite — we could expand the tournament to include more countries and teams.
What more could one ask for from a league of champions? Never before have domestic clubs and cricketers found a platform this empowering. Our marketing effort will vary for next season based on the lessons learnt this year while managing the inaugural edition.
Will Champions League be held in India next year?
Champions League is collaboration between three cricketing boards – Cricket Australia, South Africa and the BCCI. It is a rotating tournament and you will need to wait for a formal announcement from the governing council of the Champions League to find out where it will congregate next year.
Do you think the government’s stand was a right one….considering IPL is a property that has put India on the world map?
I see no reason in raking up past issues. The success of IPL’s season 2009 in South Africa is history. To some extent, the sudden move to South Africa helped facilitate the metamorphosis of the IPL into a global brand faster than we had planned. It made us sit up and take note of the additional revenue generation streams from international markets.
But most importantly, IPL in South Africa also added belief in the product as a definitive vehicle – one with universal appeal. I mean – which cricket fan the world over does not want to see Shane Warne bowl to Sachin Tendulkar? In essence, IPL is unique where the quality of cricket played by some of the best cricketers takes centrestage and that’s what we discovered thanks to what was forced upon us. So ultimately it all worked out.
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