NOW it’s time to search for the real winners of IPL in the cold light of the day. While BCCI, with an estimated profit of Rs 350 crore in 44 days, and the TV rights owner Sony, whose advertising rates kept pace with the number of sixes hit, are surely on top, what about the eight franchisees and the business houses that own them?
We’ll leave that to bean counters, but if the stock market is any indication, the 44-day roadshow hasn’t been kind to the listed companies that own IPL teams. Between April 18 and June 1 this year, five of the six franchise owners — Reliance Industries, GMR Infra, Deccan Chronicle, United Spirits and India Cements — have witnessed a massive Rs 40,000 crore in market capitalisation being shaved off.
More worrying for these companies, an overall stock market crash doesn’t seem to be a reason enough for their poor run in the 44 days. During the same period, the Sensex dropped by just 1% while the stock price of IPL promoters came down by a tenth. Bombay Dyeing, the part-owner of King’s XI Punjab where Wadia scion Ness is a key player, was the only exception as its stock price rose 8% to Rs 888.9. Index heavyweight RIL, whose team Mumbai Indians failed to show up for the semifinals, was the hardest hit with its market cap dipping by Rs 34,169 crore.
Interestingly, the two teams tipped by most observers to finish in the black after Season One — Shah Rukh Khan owned Kolkata Knight Riders and Emerging Media’s Rajasthan Royals — are not publicly traded.
So what gives? If it was the lure of massive publicity, a change in public perception and positive rub-off on the brand that drew some of the biggest companies to sinking their millions in IPL, it doesn’t seem to have worked. Though there seems little correlation between on-field and D-Street performance (India Cements’ Chennai Super Kings reached the finals, but its stock price fell 11%), investors are perhaps not too impressed with the top management of some of these companies, including promoters Vijay Mallya, N Srinivasan and Ness Wadia focussing more on cricket and less on business during the 44-day circus.
Ok, what about the brands that these players promoted during the IPL Season I?
Said Globosport V-P Anirban Das: “The IPL hype is huge, but the bottom line is that the hype is seasonal. Advertisers looking for returns on investments would still consider stars like Dhoni and Yuvraj.” Only exceptions like Yusuf Pathan and Pragyan Ojha who have been selected for the national ODI squad may be picked up for short-term deals. But they will have to prove their mettle before getting picked up for corporate endorsement deals at the national level, say experts. They also added that, at most, some among the younger lot could be picked up for one-off deals or ground-level promotions.
As Percept Holdings Joint MD Shailendra Singh pointed out: “There is a lot of excitement around these young cricketers, but they need to show consistency in performance and have a long way to go as far as brand building is concerned. IPL is seasonal and then it could well be a case of out-ofsight, out-of-mind.”
Even Reebok, which has a record 33 players of the total 88-90 in IPL in its fold, still plans to go with stars like Dravid, Dhoni and Yuvraj for its mainline advertising. Said Reebok MD SS Prem: “Identifying youngsters with high
potential at the grassroot is part of our strategy and we will associate with the younger lot through various forms of advertising such as ground events, strategic launches and Internet-based promotions.
Vodafone, DLF, Coca-Cola, Max New York Life and Nokia, all of whom were key IPL sponsors and advertisers, don’t plan to associate with younger cricketers, instead preferring to associate with the sport itself. Said DLF group executive director Rajeev Talwar: “We have no plans to rope in any cricketer. It would make sense for us to get a cricketer brand ambassador only when we see some synergies between the cricketer and our product.”
A Nokia spokesperson too said that the company is currently concentrating on the team it sponsors — Kolkata Knight Riders — but no individual cricketer. Similarly, Vodafone marketing head Harit Nagpal said: “We’ve not really used cricketers and we don’t have any plans to do so.” Insurance player Max New York Life’s contract with Rahul Dravid ended in April and it’s not planning to sign on any new cricketer either.
-from Economic Times, 02 Jun'08
We’ll leave that to bean counters, but if the stock market is any indication, the 44-day roadshow hasn’t been kind to the listed companies that own IPL teams. Between April 18 and June 1 this year, five of the six franchise owners — Reliance Industries, GMR Infra, Deccan Chronicle, United Spirits and India Cements — have witnessed a massive Rs 40,000 crore in market capitalisation being shaved off.
More worrying for these companies, an overall stock market crash doesn’t seem to be a reason enough for their poor run in the 44 days. During the same period, the Sensex dropped by just 1% while the stock price of IPL promoters came down by a tenth. Bombay Dyeing, the part-owner of King’s XI Punjab where Wadia scion Ness is a key player, was the only exception as its stock price rose 8% to Rs 888.9. Index heavyweight RIL, whose team Mumbai Indians failed to show up for the semifinals, was the hardest hit with its market cap dipping by Rs 34,169 crore.
Interestingly, the two teams tipped by most observers to finish in the black after Season One — Shah Rukh Khan owned Kolkata Knight Riders and Emerging Media’s Rajasthan Royals — are not publicly traded.
So what gives? If it was the lure of massive publicity, a change in public perception and positive rub-off on the brand that drew some of the biggest companies to sinking their millions in IPL, it doesn’t seem to have worked. Though there seems little correlation between on-field and D-Street performance (India Cements’ Chennai Super Kings reached the finals, but its stock price fell 11%), investors are perhaps not too impressed with the top management of some of these companies, including promoters Vijay Mallya, N Srinivasan and Ness Wadia focussing more on cricket and less on business during the 44-day circus.
Ok, what about the brands that these players promoted during the IPL Season I?
Said Globosport V-P Anirban Das: “The IPL hype is huge, but the bottom line is that the hype is seasonal. Advertisers looking for returns on investments would still consider stars like Dhoni and Yuvraj.” Only exceptions like Yusuf Pathan and Pragyan Ojha who have been selected for the national ODI squad may be picked up for short-term deals. But they will have to prove their mettle before getting picked up for corporate endorsement deals at the national level, say experts. They also added that, at most, some among the younger lot could be picked up for one-off deals or ground-level promotions.
As Percept Holdings Joint MD Shailendra Singh pointed out: “There is a lot of excitement around these young cricketers, but they need to show consistency in performance and have a long way to go as far as brand building is concerned. IPL is seasonal and then it could well be a case of out-ofsight, out-of-mind.”
Even Reebok, which has a record 33 players of the total 88-90 in IPL in its fold, still plans to go with stars like Dravid, Dhoni and Yuvraj for its mainline advertising. Said Reebok MD SS Prem: “Identifying youngsters with high
potential at the grassroot is part of our strategy and we will associate with the younger lot through various forms of advertising such as ground events, strategic launches and Internet-based promotions.
Vodafone, DLF, Coca-Cola, Max New York Life and Nokia, all of whom were key IPL sponsors and advertisers, don’t plan to associate with younger cricketers, instead preferring to associate with the sport itself. Said DLF group executive director Rajeev Talwar: “We have no plans to rope in any cricketer. It would make sense for us to get a cricketer brand ambassador only when we see some synergies between the cricketer and our product.”
A Nokia spokesperson too said that the company is currently concentrating on the team it sponsors — Kolkata Knight Riders — but no individual cricketer. Similarly, Vodafone marketing head Harit Nagpal said: “We’ve not really used cricketers and we don’t have any plans to do so.” Insurance player Max New York Life’s contract with Rahul Dravid ended in April and it’s not planning to sign on any new cricketer either.
-from Economic Times, 02 Jun'08
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