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Wednesday 21 May 2008

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The Indian 20 Twenty Premier League is a fascinating development from a marketing and branding perspective. Can a business be successful before it has opened it’s doors to customers?

The Indian Premier League (IPL) has only just started. Yet it has secured deals that have the potential to build the league into a worldwide sporting success. The IPL is looking at establishing itself by using financial/marketing models currently very successful in England and North America.

The league will consist of eight franchises, each competing for a $3.2 million prize. There was a player auction at the beginning of the year, featuring high-profile stars in the cricket world including, for example, Shane Warne. This was a multi-million dollar event where teams bid each other to try and get the best players under the total $5 million salary cap.

The franchise that fetched the highest sale price was unsurprisingly Mumbai (approx $119.9 million). The “cheapest” franchise was Rajasthan Royals, which was brought for small change ($71.7 million).

Quick facts

* Channel 10 has purchased the rights to show every live game throughout the season for five years for a reported $15 million.

* Approximately $775 million was spent to purchase the ownership of the eight franchises.

* Kingfisher Airlines spent approximately $28.4 million to be named the umpire partner, which includes the advertising on umpire’s clothes and sponsoring the third-umpire decisions for five years.

* Pepsi is the tournament's official drink, after signing a five-year deal worth $13.4 million.

* Indian real estate developer DLF Universal spent over $53 million on the rights to sponsor the competition for five years. Hero Honda has also been “selected” as an associate sponsor for five years in a deal worth $24.1 million.

* 40 per cent of these revenues which will go to IPL, 54 per cent to franchisees and 6 per cent to prize money.

It will be interesting to see the next strategic direction that the IPL takes and how the league evolves.

* Does it look to expand into new territories like the AFL have (e.g. Brisbane)?

* Will it become a centre of development for young Indian cricketers?

* Will younger players from countries like Sri Lanker, England and Australia move to the IPL instead of earning less money in their domestic competitions?

Although it is unlikely this will become one of the worldwide marketing innovators in the next decade it shows that success off the field can be achieved before a ball enters it. This principle is applicable in the wider business environment!  Just because the wheels aren’t moving, it doesn’t mean the engine isn’t on! Talk to us about how we can provide the spark to get your engine firing!

Reference:

 Preeti, C; Brand Channel; 14/04/2008; "Bowling for Cricket Brands"

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