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Watch your wallet

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Don’t kill the goose that is laying the golden egg

Those who have been following football will know the giant that the IPL can grow into, if handled and developed properly. Not more than a few years ago, when television, team, apparel and other rights were sold, the worth of the Indian cricket team exceeded that of the richest football clubs from England, Italy and Spain, which was before the popularity of Twenty20 was added to the equation.

So there is enough indication that there is a mountain of gold waiting to be pillaged, but there is such a thing as ‘over-milking’ of the opportunities and looking for ‘too much too soon’ that the BCCI needs to guard against.  From a purely business and ‘product development’ point of view, there are a few things that might be worth taking into account, revolving primarily around

- Careful allocation of funds
- Cultivating future stars, and support staff
- Cultivating stadiums

Not as big an investment as it seems


The IPL teams were recently opened for bids and received as overwhelming a response as any top notch company would have got for its public offer. The amounts are, of course, huge, but not as massive as made out to be simply on account of the fact that the ownership is for a whole decade. The BCCI further exhibited their fine (although, perhaps, a bit myopic) business sense as they allowed the bidders to pay the sum of money over the period of 10 years so that they could shell out atleast 10 times of what they would have shelled out had they been buying at 100% down payment. So 400 crores (in Rupees) for a team is effectively 40 crores a year, which is a significant amount but not an astronomical one. For instance, for Shah Rukh Khan’s film company which owns the Kolkata team, it is equivalent to one big film a year, which is not extraordinary in an industry where budgets are spiraling beyond the 50 Cr mark. For the other major corporates too, 40 crores a year is nothing more than an expensive marketing vehicle which can also rake in revenue.

The buyers, who profile an interesting mix of people and companies from various industries, also applied their mind while bidding as they knew they could easily sell their liabilities off if they could not afford it. The security of this sale is primarily the promise that new format of the game has shown. What needs to follow these smart decisions now is the focus and planning of the future by three entities : the BCCI, the club owners and most importantly the ICC, to assure the one base that is not yet covered and looks suspect – longevity and long term growth and survival of the product.

The importance of ‘cultivating superstars’


There are three critical elements the BCCI and the clubs ought to pay careful attention to –the players, the coaches and the stadiums.

Since players are the showpieces of the whole venture, let’s touch on that first. As of now many current and recently retired players from the international circuit have been listed for sale. The effort now is to put together ‘star value’ i.e. established stars who will draw in the initial audience and ratings. Sounds like a sound and basic plan to pull the public support and get the income prospects going for first couple of years. However, the critical part is to sustain the supply of players and more importantly ‘superstars’ in the years to come.

It is, in many ways, extremely essential for the BCCI to invest in a game plan to involve more of the young and unexplored talent out there. Scouring the local, untested playing fields of not just India, but more importantly, other countries including non-test playing nations will help the BCCI cultivate a good, solid clutch of new ‘superstars’ who will be inexpensive for them to sign and will command a huge price when sold to the teams, while adding a heavy dose of international sheen to their event.

The most encouraging aspect of this is that it will actually help cultivate the game in other countries, creating opportunities for young hopefuls there to make a good living from cricket, which will further encourage more kids there to take the game up. Kenya, Ireland, Zimbabwe may not be up to scratch as a team, but there is great promise in some individual talent, which, when given the right resources, can bloom and benefit all.

As for coaches, the BCCI can now not only hire much more coaching talent from foreign countries to give them the cutting edge, but it will also give them the chance to try out their local talent in this area and look for good Indian coaches as well. Further, they could apply the same selling policies for coaches and support staff as they did for players by cultivating coaches and putting them up for bids to the teams.

Spreading the game

Another  important aspect would be to tackle the marketing of the clubs. Marketing the game will require more efforts as BCCI will need to cater to two totally different markets. One will be the local market , which is extremely important as this is what will drive team loyalty and bring in the indispensable element of ‘passion’ and ‘support’ while also generating gate fees and revenue from merchandise sales (a very important element - the merchandise will play a big part in touching the root of public support).

The other will be the international audience. The International audience could be hooked with two simple steps. Keeping long terms profits in mind and cutting on short term gains is key, and the BCCI with their partners who have the telecast rights, could consider selling rights at basement rates to local sports channels and websites in countries which are not massive cricket markets and are not test playing nations yet. It will help cultivate interest over a period of time, the way constant and consistent telecast of the English Premier League since before there was any real interest in India by ESPN-Star did.

The second step is something that is already being practiced by the major soccer clubs. Going for talent search in other countries by setting up camps and roping in legends like Ravi Shastri, Sunil Gavaskar and other major international stars to have a talent search could well end up scaling up the reputation of the IPL and the interest of the other countries in the league. As mentioned earlier, it will serve the dual purpose of generating a fantastic player line and help cricket aspirants from fringe countries see cricket as a bread-earning career and take the game far more seriously.

Stadiums


The clubs will need to allocate their budgeted amount well amongst three main heads: players, the support staff and lastly the home stadium. It is very easy now for the BCCI to earn for itself 9 self equipped international quality stadiums at no extra cost. This they can do by asking the clubs and club owners to manage their respective ‘home stadiums’, on either a revenue share basis or by offering financial incentives and funds to the clubs and corporates who own them for taking their basic level stadiums to beyond international standards. Hand these corporates the management of these funds and one may see totally different and effective returns. Probably, a few years down the line, we could have the best pool of stadiums in the world.

For the IPL and club cricket to move on to the next level, it is important for the current mover and shaker, the BCCI, to set some targets aside of short term monetary gain from the league. But if looking at long term benefits and putting money aside for better returns is such a difficult issue for commoners like us, it won’t be surprising to see an entity like the BCCI succumb to the massive opportunities to wallow in the big bucks.

But whether they manage to resist that temptation and show patience and vision for the long term future will be the factor that will determine whether T20 club cricket will find a place amongst the cash-rich pantheons of European Club Football, the NBA’s, the NFL’s and so on.
 
(Click here to know more about Jatin Thakkar) 




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