Tehelka Magazine, Vol 6, Issue 29, Dated July 25, 2009
|ICC: A Century
media & hysteria
Overkilling The Golden Goose
The IPL and T20 cricket are changing how the game does business
Former ICC President
|In frenzy Sachin Tendulkar during an open media session before a Champions Trophy match
IN 2007, THE ICC signed a media deal with ESPN
Star Sports for the next eight years at a figure
in excess of US $1 billion. This followed the BCCI’s deal
with Nimbus of over $600m. The national cricket
boards similarly saw substantial increases in the value
of their media rights, often by upto 400 percent.
When the BCCI launched the Indian Premier
League (IPL) in 2008, business houses, private entrepreneurs
and even Bollywood stars
came together to become ‘owners’ of
teams. For the first time, a national
cricket board was promoting ownership
of teams by the private sector.
Never before has cricket seen a large
part of the profits going to shareholders
instead of going back into the game. The
BCCI astutely retained a substantial part
of the income, but the key attraction for the IPL was
the overseas players. Their boards would not receive
a penny. The overseas players’ values were determined
through open auctions and each player would be paid
according to their ‘market value’. Some of the players
would be paid more than their oards could afford to
pay them and would have to choose whether to play
for their country or for money. Some players were
prepared to retire from ‘official’ cricket so that they
would play only in the IPL as they would be financially
better off. The IPL was getting bigger than the game;
in the long term this can only harm the game.
Some of the boards realised they were caught on
the wrong foot and rushed to arrange something with
the BCCI. Cricket Australia and South Africa were invited
to become partners in the Champions League.
But the ICC seems incapable of providing the leadership
to take control. The BCCI, with Cricket Australia
and South Africa, took another step to take control of
world cricket. The media and sponsorship rights for
the Champions League were auctioned
by the BCCI to ESPN for $1 billion.
Between the IPL and the Champions
League, approximately 90 T20 matches
will be played annually. This will lead
to an oversupply of cricket in India.
This is having an impact on the TV
advertising rates that the cricket
broadcasters obtain. Media companies are now
going back to the cricket boards asking for a reduction
in the fees they had agreed to pay. There are
four main reasons for this trend:
1. The first thing companies cut in difficult times are
their marketing budgets. In India, for example,
Maruti has slashed its annual marketing budget by
50 percent, Pepsi by 40 percent, Vodafone by 50
percent, Airtel by 30 percent. Companies insist on
lower CPRPs (cost per rating point), so the pressure
is on media companies to reduce rates accordingly.
2. Since the IPL was launched last year, and ICC introduced
the T20World Cup event, viewership of the
T20 format has skyrocketed. TRP’s (television rating
points) of the T20 matches are double that of ODIs;
this translates to more money. Approximately $100
million (Rs 500 crores) has been spent by corporations
on IPL2 and the ongoing ICC T20World Cup.
|Around $100 million
has been spent by
corporations on IPL2
and the ongoing ICC
T20 World Cup
because of high TRPs
3. India is largely a single TV household, and is split
between the female (largely Hindi soaps) and the
male (largely cricket) viewers. With more than 10
Hindi entertainment channels available, it’s getting
tougher for the Indian male to find his voice.
4. India has been playing back-to-back tournaments
for two years and there is an event every month.
No wonder, then, that viewer, as well as corporate,
fatigue has set in. Corporations have the option of
picking and choosing which India series they will
advertise with, unlike the trend a few years ago.It is worth remembering that scarcity breeds
interest. The BCCI could be killing the proverbial
golden goose with oversupply of product.