I am sure that several of you would have seen the recent news on the discontinuation of IMG as advisors to BCCI. What a tragedy! Why is it that we must discontinue "good service" based on price? and that too so abruptly.
At a time, when there are major changes in the air. We will be able to see value shifting away from the league owners (BCCI) to elsewhere in the value chain. Worldwide, it has been good for leagues wherever they have had a monopoly. But that is not to be any longer.
1. There is a 7 nation Champions league scheduled for October 2009.
2. P20, the UK version of the IPL goes on air in 2010.
3.The South league(SL) commences from 2011.
4.The US cricket board plans its version of a league before 2012.
Will it be the same clubs who will qualify for each of these tournaments?
5. 4 additional IP teams are likely to join the melee in 2011 and 2012 respectively. The total no of T20 games involving clubs will go up from 59 (IPL 1) to over 137 (in 2012).
Eyeballs will come under some strain and while there is no doubt that viewership will go up, there is also little doubt that such viewership will get pretty much divided.
Add to that, the reality that revenue share between BCCI and the franchisees, will undergo a change by 2012 and the franchisees are likely to get less than half the advertising revenue that they currently share. Against that, it is rumoured that the new franchisees that will go up for auction, are being wildly guesstimated at 250 mill$ in value, against the 100 mill $ that the existing franchisees paid. The size of the stadiums are not going to change in a hurry, so ticket pricing will be pretty much constant, if not face a downward trend as the no of tournaments increase dramatically. And last but not least, the value chain may find that power is shifting to the players who will be in short supply for such a surfeit of leagues.
This is a good point of time to have had IMG on the side of BCCI. Some of the franchisees have obviously already spotted the imminent challenges that will alter the landscape of the IPL. No wonder they are cribbing and complaining. Let us hope that wisdom prevails on the BCCI. This is a good time to have IMG on board.
Tuesday, September 1, 2009
Tuesday, August 4, 2009
Licensing and the IPL clubs.
It is interesting to note, that licensing as a means of differentiating the product or service is yet to take off in India. It is doubly interesting to note, that whereas brand ambassadors are paid royal sums by brand owners; club licensing is yet to come of age. Especially since, use of player images are part of the licensing arrangement.
On the "buy side", marketers are yet to see this opportunity. In my contact with over 100 Corporates, I find that the concept is yet to capture their imagination. In the past, brand owners had to take a consious decision to align the brand with cricket. But the truth is that Bollywood and Cricket dominate the brand ambassador arena. Usage of licensing both as a strategic marketing imperative as well as a tactical marketing foil, are opportunities that club licensing present. Moreover, "aligning" with a club and therefore its fans, mitigates the risk of being aligned to a single and sometimes "out of form" player. The brand no longer "swings" according the the performance of the individual.
On the sell side, the clubs appear to be seeking a silver bullet for garnering revenues. Sponsorship is the low hanging fruit that is available and is characterized by a low no of sponsors, each of whom is paying a high value. Licensing on the other hand, is characterized by a large no of licensees paying a relatively low value. Although the latter is yet to happen.
The important point here is, that licensees need to be "marketed to". The limited amount of inventory available for sponsorship may mislead the club into thinking that this will remain a "sellers" market infinitely. But here are some projects on the anvil.
1.The P20 promoted by the English cricket board is due for launch in summer 2010.
2. The South Asia league promoted by Cricket Australia and the South African cricket is due for launch in 2011/12.
3.The US cricket board has just floated an RFP to run a US based global cricket T20 series in 2011.
4.And the Emirates are planning one in Dubai in 2010/11.
5. More immediately, the Champions league promoted by BCCI, Cricket Australia and South Africa launches its inaugural edition in October 2009. This is a 7 nation cup with 3 IPL teams playing, and the rest clubs drawn from England, South Africa, Australia, West Indies, SriLanka and New Zealand.
However brief it may be, these clubs would have a similar exposure as any sponsor might have, and there is a huge inventory of sponsorships coming into the market over the next 3 years. Prices will therefore have to come down and at that stage the clubs who have not built a licensing channel, may find that streams of revenue are no longer as stable as they once were. Food for thought!
On the "buy side", marketers are yet to see this opportunity. In my contact with over 100 Corporates, I find that the concept is yet to capture their imagination. In the past, brand owners had to take a consious decision to align the brand with cricket. But the truth is that Bollywood and Cricket dominate the brand ambassador arena. Usage of licensing both as a strategic marketing imperative as well as a tactical marketing foil, are opportunities that club licensing present. Moreover, "aligning" with a club and therefore its fans, mitigates the risk of being aligned to a single and sometimes "out of form" player. The brand no longer "swings" according the the performance of the individual.
On the sell side, the clubs appear to be seeking a silver bullet for garnering revenues. Sponsorship is the low hanging fruit that is available and is characterized by a low no of sponsors, each of whom is paying a high value. Licensing on the other hand, is characterized by a large no of licensees paying a relatively low value. Although the latter is yet to happen.
The important point here is, that licensees need to be "marketed to". The limited amount of inventory available for sponsorship may mislead the club into thinking that this will remain a "sellers" market infinitely. But here are some projects on the anvil.
1.The P20 promoted by the English cricket board is due for launch in summer 2010.
2. The South Asia league promoted by Cricket Australia and the South African cricket is due for launch in 2011/12.
3.The US cricket board has just floated an RFP to run a US based global cricket T20 series in 2011.
4.And the Emirates are planning one in Dubai in 2010/11.
5. More immediately, the Champions league promoted by BCCI, Cricket Australia and South Africa launches its inaugural edition in October 2009. This is a 7 nation cup with 3 IPL teams playing, and the rest clubs drawn from England, South Africa, Australia, West Indies, SriLanka and New Zealand.
However brief it may be, these clubs would have a similar exposure as any sponsor might have, and there is a huge inventory of sponsorships coming into the market over the next 3 years. Prices will therefore have to come down and at that stage the clubs who have not built a licensing channel, may find that streams of revenue are no longer as stable as they once were. Food for thought!
Subscribe to:
Posts (Atom)