Social Media and New Markets

Sports Marketing can so easily be confused with selling the game on TV. In fact in its early days for the NFL and all that is American it used to be so true. Well, out here in Asia or for soccer, Europe, it is still very much true.

Think of a game, and automatically you think of the TV stars that made the game. The Tendulkars and the Sehwags in Cricket, the Bhaichung Bhutias in Indian soccer have an umbilical cord link with the game, and for us marketing people that  cord is the TV Remote. India’s fortunes in Cricket are directly linked with its revenues from TV advertising. Other BRand promotions, events and the game itself were almost pushed to a secondary level everytime its revenues were at a peak.

The situation on the ground is the exact opposite. Players have struggled for real remuneration and spend retirement in various stages of ‘disuse’ and ‘disenchantment’. There are rare coaching opportunities, there are rare royalties and no one but yourself to remember your own records. The broadcasters and the marketers are conspicuous by their absence just 5-10 years ago. It was in this scenario that NEO Sports made a start in India as a game broadcaster, asking ESPN Star Sports and DD to face up to competition. The story of the NEO Sports franchise is thus as old as India’s new found hegemony in Sport.

Apart from its Cricket centric beginnings, it has also promoted the German Bundesliga with a recent 3 year contract. The Hockey World Cup is next. All NEO channels are paid additions to Cable and DTH households within the subcontinent and in the middle east and maybe UK. As recently as April 2009, NEO has received $64 million in funding from 3i and Oman Investment Fund.

Perfetti and Hero Honda are the anchor sponsors for NEO Sports and one can easily assume a less than $25 million billing for them at this stage when the entire cricket universe is $250 million, out of which a good $150 million goes to IPL. NEO Sports has made $95 million across the India Australia series in 2009 and the recent India Sri Lanka series. Even for the current SA visit, sponsorship bands are available for less than $2 million and advertising at $8k per 10s. Idea and Tata Docomo are both part of it since Airtel and Vodafone Zoozoos pretty much monpopolise everything IPL next month ( Our Telecom market is growing at 10 million connections a month and needs constant sustenance for the brand in the face of sometimes more than 5 players in each circle)

NEO also brings the Domestic Cricket league telecast to the 20 million DTH and over 80 million Cable Homes. The recent Lanka series infact crossed TRPs of 8 for the series where the Colors Big Boss and IPL opening matches and finals do not cross 12, A 5 or 6 average for TRP is good and that means 5 million TV Sets were on for the game

NEO is floated by Nimbus sports and in an earlier round of funding it had raised $125 million from Deutsche Bank and Americorp with 3i. It has Indian cricket rights only till the end of this year.

Among competitors Times Global and Network 18 Viacom would be looking for public funding this year. In rights bidding, ESPN Star may be still competing with MAX for future Cricket, Hockey and Soccer rights. Doordarshan as the only Terrestrial partner gets to carry any and all TV telecasts of games free. .For the Commonwealth games, TEN in Australia, SIS (UK) and SKY TV ( NZ ) are among those who have landed broadcast rights. DD/Prasar Bharti are host broadcasters for the game, including the first ever HD broadcast.

NEO campaigns are noted for their bent as pioneers of the game. Its tagline in 2007 was ‘The home of Indian Cricket’, its campaigns used as fillers when air time could not be sold in the early struggles. ‘Dhak Dhak Go’ from Hero Honda supplements the taglines for the FIH Hockey World Cup promotions.

NEO won 11 awards in the 2008 Promax BDA Broadcast Awards for its campaign shorts after the rules of Cricket were changed to bkeep spectators engaged.  This years promos to watch are Power play, Rusty Nail and ‘Tension’

Dhoni and Sachin are batting for India as we write, and India are still holding on to the #1 position in Cricket.

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Even though the slight suffered by Pakis in not being bid may rankle sports lovers, the money train is here for the IPL. The Royals of Rajasthan, will now have the Cape Royals which could be as easy as $20 million, the Victoria Royals that could be a prize catch for $40 million, the TNT Royals and a couple more from England and Pakistan could go up for bidding for stakes from Manoj Badale and Lachlan Murdoch’s dream franchise in royal blue steed/. The Lion as mascot, btw, is Moochu singh and he may get a few avatars as well in each Na’vi land that the Emerging media team purchases. Sure to make thier 25% IPO a $! billion candidate, and the game could do with some money outside India. Downstream deals would solely depend on the right pricing at this juncture as many others would be eager to follow if the doors are opened. At this time, national sponsors fetch an annual $7.5 million and regional sponsors are being sought by IPL for $1.5 million. The team sponsors like Ultratech, Fly Kingfisher and Reebok in some cases each have been bagged by teams for $1-$10 million while smaller players like Wrigley’s and Nimbooz have contributed in bits nd pieces. The IPL franchise is currently valued at around $2 billion, while KFC T20 Bash and the SA Club tournament would each be $200 million and $100 million, presumably across 10-12 teams. Ofcourse there would be adjustments for the fact that IPL is a non profit in India’s case.

IPL’s aggregate valuations could cross $3.5 billion this year including the two new teams.

The Rajasthan Royals co-owned by Raj Kundera, Lachlan Murdoch and chaired by Manoj Badale and Emerging Media were recently valued at $300 million. The team is set to grow the game franchise and take a larger piece of the growing pie. The Royals are on way to owning four more International T20 teams, The Victoria Bushrangers now to be known as the Victoria Royals, The Nashua Cape Cobras, The TNT team that will become the TNT Royals and maybe one more in England or Pakistan. All these teams made it to the Champions League of National Champions / Victors in the first edition of 2009. The Royals will own a sable stake in each of the teams and share revenues and expenses correspondingly with the current owners in each case.

IPL as definitely been the story of growing franchise and easy access to investment in the world’s greatest sport ( after the Saints kept their part of the bargain in NFL of course).

The no. of foreign players in each IPL franchise was recently raised from eight to ten, while four can play in each game. RR’s wider ownership of teams will de-risk team revenues from such patriotic and seasonal vagaries and bring more certain cash flows investment bankers love to see in any product for sale.

Punjab Kings XI meanwhile have recruited a local industry luminary to support its marketing and are looking to offload a similar ownership stake in India or abroad for their $300 million team, that fared well in the first edition and is looking to come back in the third edition with a new captain. Shane Warne captains the Jaipur based Rajasthan Royals

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At $351 m, Manchester United (Michael Owen and Rooney below) is twice the value of AC Milan and 2.7X that of Football club Barcelona (Barca), all soccer teams count in the Top Global Sports Brands. Phil Mickelsen earns $39 million in sponsorships every year and was till now listed behind David Beckham and Tiger Woods.

Cricket has never been counted in the same league and NFL’s Peyton Manning or Tom Brady have not been as high either. internationally, however, A Sachin Ramesh Tendulkar and Virender Sehwag sign 5-6 endorsement each worth INR 10 million and Rajasthan Royals sold its 10% take a year back for $25 million making its valuation of $250 million within a whisper of Manchester United. A Superbowl spot sells for $2.6 million for a 30 s, while Sony sells the Cricket spots for 6 lakhs for 10 s this season or $0.04 million for a 30s push, thats the gap.

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The latest theater rights sell down here

ROYAL CHALLENGERS BANGALORE
Owners: United Spirits Ltd
Team captain: Kevin Pietersen (first six matches), Anil Kumble (for the remaining)
Franchisee fee: $111.6 mn
Brand value: $14 mn
Brand score: 50%
Sponsorships/brand associations: Wrigley’s and mostly in-house brands such as Kingfisher
Income from central pool: 2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from team sponsorships: 2008: Not applicable, as all were in-house brands
2009: Rs10 crore
Total: 2008: Rs35 crore
2009: Rs86.5 crore
Restructuring shows results
From being a laggard in the first season to runner-up this year, Royal Challengers Bangalore was a spectacular success story in IPL 2. And if there was one star the team owed its success to, it was its flamboyant owner, liquor baron Vijay Mallya. After the team’s poor show in the first season, Mallya restructured his team and redefined its key result areas. His personal charisma added to the team’s brand appeal, says the MTI study.
“RCB had a lot of glamour associated with it as it had cheerleaders from the Washington Redskins as its own cheerleaders, and the glamour quotient was furthered by the presence of (actor) Katrina Kaif as the brand ambassador,” it says. The study pegged the brand value of Mallya’s team at $14 million (around Rs66.08 crore), but this is sure to pick up after this year’s comeback.
The team has not had too many sponsors but the owners say that was a conscious strategy.
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RAJASTHAN ROYALS
Owners: Jaipur IPL Cricket Pvt. Ltd
Team captain: Shane Warne
Franchisee fee: $67 mn
Brand value: $10 mn
Brand score: 47%
Sponsorships/brand associations: At least nine; UltraTech Cement, Kingfisher, Royal Challenge, HDFC Standard Life, Puma, 7Up, TCS, Boost, Wrigley’s, fashion designer Kunal Rawal
Income from central pool:
2008:Rs35 crore
2009: approx. Rs76.5 crore
Income from sponsorships:
2008: Rs15 crore
2009: Rs100-110 crore
Total*:
2008: Rs50 crore
2009: Rs176.5-186.5 crore
Defending champions lose steam, gain ground in getting sponsorships
Rajasthan Royals surprised everyone when it stole the show in 2008. It was the least expensive team and its owners Jaipur IPL Cricket Pvt. Ltd did little to change the frugal image, with no marketing buzz and no celebrity endorser.
Winning the tournament in 2008 helped Rajasthan Royals attract bigger sponsors this year. The absence of star players, lesser-known owners and no brand ambassador last year combined to prevent it from creating a differentiated brand identity, but all that changed after the win. This year, the team’s glamour quotient went up when Bollywood actor Shilpa Shetty, with partner Raj Kundra, bought a 12% stake for $16.8 million, pushing the team’s total valuation to $140 million, against the $67 million the team owners had spent to buy it.
All this helped the team attract new sponsors, nine against four last year. The MTI study pegged Rajasthan Royals’ brand value at $10 million (around Rs47.2 crore), the lowest among all teams. Things may be worse next year given the team’s lacklustre performance this time.
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MUMBAI INDIANS
Owners: Reliance Industries Ltd
Team captain: Sachin Tendulkar
Franchisee fee: $111.9 mn
Brand value: $17 mn
Brand score: 51%
Sponsorships/brand associations: At least 13, including MasterCard, Idea Cellular, Royal Stag, Kingfisher, Pepsi, Adidas, Zandu Balm, Red FM, Wrigley’s and Luminous Technology
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from team sponsorships:
2008: Rs15 crore
2009: Rs80-90 crore
Total*:
2008: Rs50 crore
2009: Rs156.5-166.5 crore
An average showing, loyalty factor driven by icon Tendulkar
The most expensive team, Mumbai Indians, bought by Reliance Industries Ltd, had an average run in IPL, both in terms of performance and valuation. Stuck in the middle of the grid, Mumbai Indians was eliminated at the quarter-final stage in both seasons.
The team, however, managed to attract an impressive number of sponsors this year. The MTI study put its brand value at $17 million (around Rs80.24 crore), the fourth highest in the league.
Although Bollywood actor Hrithik Roshan did lend himself to marketing initiatives through music videos and advertisements in 2008, it was icon player Sachin Tendulkar who really drove the loyalty factor for the team and brought in brands such as MasterCard, Pepsi and Adidas, among others.
The team’s biggest strength, according to the MTI study, was its huge fan following among cricket lovers.
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KINGS XI PUNJAB
Owners: Preity Zinta, Ness Wadia and Mohit Burman
Team captain: Yuvraj Singh
Franchisee fee: $76 mn
Brand value: $15 mn
Brand score: 54%
Sponsorships/brand associations: At least nine; Emirates, Gulf Oil, Reebok, Springbok International, Nimbooz, Netlinkblue, Royal Challenge, Dabur Glucose-D, Orbit
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from team sponsorships:
2008: Rs15-18 crore
2009: Rs50-55 crore
Total*:
2008: Rs50-53 crore
2009: Rs126.5-129.5 crore
Zinta brought in advertisers; consistency won loyalty
More than its performance on the pitch, Mohali’s Kings XI Punjab is known for its perky co-owner, Bollywood actor Preity Zinta. The team’s performance in both seasons was average. Although the team made it to the semi-finals in 2008, this year it was eliminated at an earlier stage. The MTI report valued the team at $15 million (around Rs70.8 crore), fifth from the top in the list of franchisees.
“With consistent performance throughout the season, the team was able to attract consistent audience numbers and developed a loyal viewership,” the report says.
Zinta’s association with several brands as their ambassador helped the team get several sponsors and it is likely to have earned about Rs55 crore in sponsorships this year. Popular cricketers such as Brett Lee and Yuvraj Singh also upped the ante of the team.
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KOLKATA KNIGHT RIDERS
Owners: Red Chillies Entertainment Pvt. Ltd
Team captain: Brendon McCullum
Franchisee fee: $75.09 mn
Brand value: $22 mn
Brand score: 52%
Sponsorships/brand associations: At least 12; Nokia, Belmonte, Star Plus, Gitanjali Jewellers, Sprite, Boomer, Reebok, Bilt, Tag Heuer, PlanetM, Next
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from sponsorships:
2008: Rs30 crore
2009: Rs90-100 crore
Total:
2008: Rs65 crore
2009: Rs166.5-176.5 crore
Brand value upped by Khan, likely to be most profitable this time too
It did not have a good run on the field last year and this year, Kolkata Knight Riders, or KKR, was the first team to be ousted from the IPL. Yet the team with Bollywood superstar Shah Rukh Khan, or SRK, as its owner topped the league in terms of brand value.
The MTI study pegged the team’s brand value at $22 million (Rs103.84 crore), 16% more than the second highest team with a brand value of $19 million. “The Shah Rukh Khan brand and the in-stadium marketing strategies of the teams have influenced the team’s brand value, resulting in higher income from gate receipts, merchandising revenues and attracting new team sponsors,” says the study.
The team’s below-average performance on the ground notwithstanding, KKR had the maximum buzz mainly because of SRK’s personal charisma and partly because of team member Saurav Ganguly. This year, an anonymous blogger, Fakeiplplayer, who wrote about KKR’s “inside story”, also kept the brand name bustling. The result: It was reported to be the most profitable team last year, and is likely to have repeated the feat this time as well.
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CHENNAI SUPER KINGS
Owners: India Cements Ltd
Team captain: M.S. Dhoni
Franchisee fee: $91 mn
Brand value: $18 mn
Brand score: 53%
Sponsorships/brand associations: At least 15; Aircel, Cloud 9, Nivaran 90, Reebok, 7Up, Band-Aid, Peter England, Nivea, Lays, Orbit, Boomer, Star Vijay, Hello, Big Bazaar, Coromandel King
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from team sponsorships:
2008: Rs20 crore
2009: Rs100-110 crore
Total*:
2008: Rs55 crore
2009: Rs176.5-186.5 crore
Dhoni key in creating a strong brand
Last year’s runner-up and this year’s semi-finalist, Chennai Super Kings successfully delivered what its owners, India Cements Ltd, expected it to—creating brand awareness for the holding company. “IPL has given us a pan-India presence and strengthened our brand name in southern India,” Rakesh Singh, chief marketing officer of the team, had said earlier.
The brand, according to the MTI study, enjoyed a strong valuation at $18 million (around Rs85 crore), the third highest among the eight teams. With Mahendra Singh Dhoni as the captain and icon player, the brand benefited from his associations with brands such as Aircel, Reebok, Big Bazaar and 7Up.
“The purchase of M.S. Dhoni, under whose captaincy India won the world T20 championship, was the key factor in creating a large awareness, a stronger perception and gave great mileage for creating a strong brand for Chennai Super Kings,” says the study.
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DELHI DAREDEVILS
Owners: GMR Holdings Pvt. Ltd
Team captain: Virender Sehwag
Franchisee fee: $84 mn
Brand value: $19 mn
Brand score: 55%
Sponsorships/brand associations: At least 13; Hero Honda, Kingfisher, Royal Challenge, Coca-Cola, Adidas, Fever 104 FM, Orbit, IBN7, CNN IBN, Cricketnext.com, designer Karan Nasir, Buzzintown.com
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from sponsorships:
2008: Rs15 crore
2009: Rs60 crore
Total*:
2008: Rs50 crore
2009: Rs136.5 crore
A balanced team, Sehwag’s popularity generated advertiser interest
The MTI study valued the Delhi Daredevils brand at $19 million (around Rs89.68 crore), the second highest among the eight teams. The reason: A strong squad, a popular brand ambassador (in 2008) and a well-known owner helped Delhi Daredevils create a good awareness and perception about the team, it says.

Even cricket experts hailed Delhi Daredevils as one of the most balanced teams on the field.
[picapp src="a/4/2/3/PicImg_Indian_Cricketers_Unveil_e9e6.JPG?adImageId=5052460&imageId=4514590" width="234" height="161" /]Owned by Bangalore-based infrastructure and construction group GMR Holdings Pvt. Ltd, the team established itself as a serious player with strong performances in both the first and second seasons of IPL.
The popularity of captain Virender Sehwag, along with Bollywood actor Akshay Kumar as the face of the team in 2008, helped it build a loyal fan base and generated interest among advertisers.
According to industry estimates, the team generated Rs15 crore in sponsorships in 2008, and this was likely to have increased to Rs60 crore this year, thanks to the deals signed with brands such as Coca-Cola, Fever 104 FM and Kingfisher Airlines.
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DECCAN CHARGERS
Owners: Deccan Chronicle Holdings Ltd
Team captain: Adam Gilchrist
Franchisee fee: $107.01 mn
Current brand value: $11 mn
Current brand score: 44%
Sponsorships/brand associations: At least nine, including Odyssey, Puma, Kingfisher, McDowell’s, Big 92.7 FM, Boomer, Pepsi, Serendipity Tours
Income from central pool:
2008: Rs35 crore
2009: approx. Rs76.5 crore
Income from team sponsorships:
2008: Rs20 crore
2009: Rs50 crore
Total*:
2008: Rs55 crore
2009: Rs126.5 crore
Valuations remained low but win may change things
The team was, indeed, all charged up this year. Beating Royal Challengers by six runs in the final, the Deccan Chargers team not only scored in terms of popularity, but also made its team owners, Hyderabad-based media company, Deccan Chronicle Holdings Ltd richer by the Rs4.8 crore that it won in prize money.
The team’s valuation at $11 million (around Rs52 crore) was, however, not too impressive. The absence of a popular brand ambassador, lower awareness about its owners and fewer marketing and branding efforts prevented Deccan Chargers from building a popular brand, says the MTI study.
However, there was enough advertiser interest in the team this year, with the number of brand associations jumping from five to nine.
The team owners have been keen to sell a strategic stake in the team, but had not found any takers at the price they were quoting. This may now change.
* The total income does not include gate receipts, revenue from merchandising and prize money.

zyakaira notes: this being an official study, we will be using this to work on all things IPL here and at http://twitterone.mobi

All IPL brands have earned 150-200 crores in 2009 edition with 110 million viewers ratifying the IPL’s tag of 8200 crores ($1.3 bllion) for media rights. Now apart from their going public, i feel the potential is such that at least a couple of these franchises like the Daredevils will start earning closer to 300 crores from edition 3

via Brand valuation | How the teams fared

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