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SBD Global/April 15, 2013/Leagues and Governing Bodies

Indian Premier League Swimming In Sponsors, But Clubs Awash In Red Ink

Kolkata Knight Riders batsman Jacques Kallis plays a shot during the IPL Twenty20 final last May.
Indian cricket has become a "big money spinner" since the '08 launch of the Indian Premier League, according to James Crabtree of the FINANCIAL TIMES. The IPL, which involves a "zippy three-hour version of the otherwise slow-moving sport" of cricket, has "won a series of large sponsorship packages," including a 10-year broadcasting deal with Sony worth $1.6B. A year ago, "some doubts surfaced" when ratings declined and high-profile sponsors didn’t renew contracts. However, "matters now seem to have reverted to India’s cricket-crazed norm," with viewing figures bouncing back, and the IPL unveiling another Rs4B ($74M) deal with Pepsi. All this income "helped the tournament to build a brand" worth $2.9B last year while "earning handy profits for its main backers," the Board of Control for Cricket in India. It is a different story for the teams. Reliable figures "are hard to find." However, most observers said that leading franchises, such as the Mumbai Indians, "are lossmaking." An IPL senior exec, speaking on condition of anonymity, said, "I can’t imagine them being profitable." Wealthy players "are part of the problem." The IPL has a salary cap, but many spend up to the $12.5M limit, "while also finding crafty ways to pay extra to their most valuable stars." Broadcasting income "is relatively static," while a combination of cost-conscious fans and rampant piracy "limits the ability to sell expensive team-branded kit." Rickety Indian stadiums "also make fancy corporate hospitality packages difficult." Add to this the franchise fees each team must pay the IPL every season, and "finances look stretched." PwC Dir Avinash Kalia said, "The game has great glamour, but people now realise losses can be huge too" (FINANCIAL TIMES, 4/14).

TV RATINGS DOWN: PAKISTAN TODAY reported IPL's average first-week viewership "has marginally dropped compared to the corresponding figures from 2012," according to Tam Media Research, the leading television ratings agency in India. The TV viewer ratings for the first week slipped from 3.9 in '12 to 3.8 this year. However, there were "only five games in the first week (till Saturday) as opposed to six" in '12 (PAKISTAN TODAY, 4/13).
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