Corporate India’s new business sector: Sports team ownership!

Following are excerpts of an interview with corporate personality and marketing specialist Rohantha Athukorala on the Indian Premier League (IPL) and whether Sri Lanka is ready to venture into this lucrative business domain:

By a Special Correspondent

 

Q: What’s your view of this $ 3.7 b worth IPL brand of India Inc.?

A: It was a cutting edge decision taken by BCCI and corporate India at a time when disposable incomes were challenged way back in 2007 with the looming financial crisis. Higher the risk, better the return and I believe IPL has done good for brand India from a new business model as well, giving brand India a touch of modernity and youthfulness. IPL is a great property for India Inc.

Q: Do you feel Sri Lanka is ready for such a diversification strategy in business?

A: Post the war, the economic boom and stock market pick up has changed the shape of business in corporate Sri Lanka. Private sector profits have grown by almost 143% last year and there is a strong appetite to venture into new businesses. We have seen companies that are essentially financial service/agricultural companies diversifying to the tourism industry with hostile takeovers, which reflects the dynamism in the market.

However, diversifying into sports marketing and ownerships in my view is too premature, the logic being that many sports are embroiled in internal conflicts and management issues in Sri Lanka. This needs to be ironed out and stabilised so that the adventurous private sector entities can venture out to this new business area of sports marketing cum franchising.

Q: Why do you think IPL did well?

A: The brand clearly reflected the aspirations of the affluent consumer in India. If you carefully analyse the profile of the spectators of IPL as against the recently-concluded World Cup 2011, the audience is different. The IPL customer is young, highly involved and wants be part of the gold rush economic agenda of India. They are short on time for entertainment so the three hour template of the game ideally fits their schedule.

The brand Champion of IPL Lalith Modi must be congratulated for brilliant product architecture that has been structured well to cater to this new age India spectator. The best names in cricket likes the Warnes, Malingas and Tendulkars, Bollywood personalities like SK and Preity Zinta, corporate magnates of the Vijay Mallays and Ambanis, not to mention the carnival atmosphere with the cheerleaders and music, that sure cuts ahead of the time that one can spend at a gym or at a club with one’s friends or for that matter staying home with the family.

Q: But IPL edition 4 took a slow start this year?

A: Yes. That was due to almost 37% stating that they were suffering cricket fatigue as people had to move from WC to IPL without a break. 10% said that with the brand champion Modi, IPL lost that fire; another 14% said that they did not like to see two teammates from one country competing against each other.

There was also a strange insight as in Calcutta the crowds were low due to their favourite cricket Ganguly not being featured in the team, which reflects the psyche of the Indian consumer being somewhat traditional in nature even though the team KKR is one of the top two teams in this time’s edition.

Hence, the pick-up from a business perspective is that one needs to manage the business angle of the brand whilst having to adjust to customer expectations. As you may be aware, KKR did not bid for Ganguly this time around just like what happened to West Indian sports icon Brian Lara due to poor performance.

Q: What was the cutting edge decision that IPL made for its roaring success in your view?

A: The first is when it decided to target the age group 12-16 as its key target market. If you have carefully analysed the reason why one sees such young presenters at IPL rather than the legendary Tony Greigs or Ravi Shashtris of the world, it is because Modi picked the announcers of hit music shows on TV so that the 12-16 year age group could be attracted to the game.

This has been achieved if based on the profile of the eyeballs on edition 1, 2 and 3. To me this was a cutting edge decision. In fact this is what the game of cricket needs too. Now 2011, this segment is touching the 15+ age group, which is why brand marketers are on the heels of IPL organisers for sponsorships. The top two team sponsorships have topped 300 million dollars as at edition 4.

Q: Why do you say that WC and IPL are different?

A: If you really skin the product, it’s all about someone throwing a ball and another hitting it with 11 people in one team. But it’s the wrapping that is changing the two brands. IPL has wrapped it with fun and excitement and a shorter duration whilst WC is more serious in nature and linked to the country identity. That’s the key difference.

The beauty of IPL is how it has wrapped colour into the game with the best names of cricket, sub themed with such names like a Karbonn Camal catch, etc., that gives depth, whilst also the 10 sub brands having its own identity linked to Bollywood, corporate India and celebrity endorsement that cuts out from the WC imagery. In my analysis, next to the iPad Tab, the IPL is undoubtedly the innovative brand of the century.

Q: What are your key pick-ups of IPL edition?

A: In editions 1 and 2, the key pick up for me was the power of Australian talent. Shane Warne and Adam Gilchrist led their teams to victory with Rajasthan Royals and Deccan Chargers that gave some insight to talent building that happens in Australia. Even if you look at the WC squad of the Australians, there were seven members who were playing WC cricket for the first time. In fact they were the youngest team in the 2011 championship. I guess the world needs to pick up the best practices from this great nation and implement some of them.

Q: What about edition 3?

A: My pick up is the importance of social media. Two top personalities lost their jobs all because of a Tweet: Shashi Tharoor from the Government of India and Lalith Modi, the commissioner/CEO of IPL Cricket. In fact when I met the owner of Twitter Dick Castello at a global forum, when I mentioned this episode he could not believe his eyes that Twitter had become so engraved in people’s lives in this part of the world. So the lesson is, be it FB, Twitter, Four Square or any other IT platform, it needs to be carefully monitored and managed as its viral form of communication that cannot be controlled.

Q: Anything special on Edition 4 of IPL?

A: To me it’s all about the spirit of India. After WC I was wondering ‘what next for brand India?’ after all that hype and dance that happened in all parts of India after the victory. Then came edition 4 of IPL and now we see two youngsters knocking on BCCI to mandate their claim to the class team of India. One name is Ryandu.

To me, IPL reflects the culture of India which is oozing with talent and passion. I see this not only in the game of cricket in India, but being an anchor on NDTV the likes of Burka Dutt to Sharnia Mirza, the tennis star, or Dia Mirza, the film actress, to personalities that I meet day-in-day-out in the business world. India is truly an amazing country for talent. I guess 1.2 billion people chasing 0.05 million top jobs bring out the best in a country.

Q: Did the corruption scandal taint IPL?

A: For sure. Not only IPL, but it created a dent on brand India globally. Some went on to generalise that corruption is part of the Indian culture and I disagree strongly. But this is the damage that the scandal in edition 3 did to brand India. But the good news is that cricket in IPL India was not harmed as there were no match fixing allegations, meaning that IPL cricket remained pure, so among the public the core entity of the brand remained intact.

This credibility must be protected by BCCI in the future. If this element gets affected, it will affect the brand franchise value as well as all sponsorship earnings. So to your question whether the scandal hurt the brand IPL, yes, but it can be corrected as the damage was peripheral. May be a brand equity study can validate this.

Q: Modi as an outstanding business personality?

A: I would say that he is an outstanding marketer who has built a brand which is worth 3.7 billion for India. His qualities such as flamboyancy, information at his fingertips and his Wild West attitudes were more cut-out as a marketer. I would blame corporate India for not protecting this talent by introducing governance into the IPL system by having specialists on areas such as finance, legal and ethics.

I guess it’s a lesson to the world that we must not allow a person to be bigger than a brand. This is what happened to IPL in India. Fortunately it has bounced back with edition 4 that has captured 141.3 million viewers as against the 161.7 million viewers of WC 2011, which is interesting.

Q: What should IPL do in the future?

A: I would like to see it listed on the stock exchange. I guess the stocks of Mumbai Indians and Chennai Super Kings would have been highly traded at this moment of time. It will be also fun to see how the stocks perform as the revenue model is fairly static. Ticket sales and sponsorship monies garnered; the expenditure is also clear so the profits are somewhat predictable, but the sentiments can have an impact.

Maybe IPL can go global next year by staging a game in Sri Lanka and Pakistan with new two new brands from each country. It will be an interesting concept to pursue. The business model will require remodelling to give a global nature to the brand.

Q: What about IPL in Sri Lanka?

A: See, when you are developing brand variations, at first the mother brand must be strong in nature. We need to stabilise and build a strong identity for the brand Sri Lanka cricket, especially post the debacle after WC 2011. Thereafter I am sure an IPL version can be launched. This year people have been subject to over exposure of cricket in this part of the world, so timing of the launch is critical. We must also improve the Ease of Doing Business Indicator so that Sri Lankan companies will like to venture out and diversify into sports brand ownership.