The DLF Indian Premier League (IPL) franchise owners are sharply divided over the $5-million cap imposed by the cricket board for buying players.

Before the players’ auction in February this year for the first edition of the 20-20 over tournament, the Board of Control for Cricket in India (BCCI) had informed the eight team owners that the maximum amount each team could spend on players was $5 million.

However, with the teams having the right to trade players from the upcoming season, a few franchise owners want the bar to be increased, or scrapped.

While franchise owners like Vijay Mallya’s UB Group (which is the owner of Royal Challengers Bangalore) are demanding a relaxation in the cap, the GMR Group, which owns the Delhi Daredevils, and Shah Rukh Khan’s Kolkata Knight Riders say they want the restriction to stay.

“We would like to retire players who haven’t played or performed (in the inaugural edition). If any player needs to be substituted then we have to buy out their contacts since the cricketers are contacted for three years. To manage this within the limit of $5 million is not an easy task,” said Vijay Rekhi, president of UB Group.

However, Yogesh Shetty, CEO of GMR Sports, the franchise owner of the Delhi team, differs on the issue. “When rules have been defined at the very beginning, why should there be any changes now?” he asked.

“The logic of having a cap was to make sure that there are a players’ balance in each team,” he added.

Shah Rukh Khan’s Kolkata Knight Riders spokesperson echoes the sentiment, stating that the franchise’s owner had decided on the team’s strategy keeping the cap in mind and “revising the restriction now doesn’t seem fair.”

The Sharad Pawar-led board, however, has still not taken any decision on revising the rule. When contacted, Lalit Modi, chairman and commissioner of DLF IPL said, “We have not decided the new policy yet. In the current policy, the cap exists.”

The eight franchise owners had to select players from a pool of over 80 cricketers from India, Australia, Pakistan, Sri Lanka, Bangladesh, South Africa, Zimbabwe and New Zealand.

BCCI had also laid down that of the 16 players in each team, a franchise owner can have maximum of four international players, eight Indian players and four budding talent.
Source:business-standard.com

England’s top players have given the England and Wales Cricket Board a shot across the bows after it was revealed half of them would consider quitting international cricket early to play in the Indian Premier League.With money now flowing into the sport like never before, a poll by the Professional Cricketers’ Association highlighted that 50% of current England internationals would consider premature retirement.

Within the last nine months, two rival cash-rich leagues have been set up in India, Texan billionaire Sir Allen Stanford has done a deal with the ECB to stage £10million, winner-takes-all matches each autumn and the rules and regulations for the inaugural Champions League tournament are being drawn up. ‘The current imbalance between remuneration for Twenty20 cricket and the longer forms of the game does present a very real threat to the existing fabric of the game,’ the report states.

‘The financial rewards offered by the Indian leagues will entice players to retire early from county and international cricket - and senior players at that. The impact on the strength of our international sides would be huge.’This would have the potential to significantly devalue our TV rights as well as reducing the attraction of English cricket to the fans.’The findings are a warning to the authorities that top talent will look elsewhere if they are not remunerated commensurately with their international peers.

However, the results of canvassing 334 players on the English domestic scene also showed Test cricket is the most revered form of the game.A whopping 93% believe it is important Test cricket retains its status on the international scene.Three-quarters of players would, in fact, like to see a Test Championship incorporated into the five-year future tours programme cycle.

With that in mind, and despite recent suggestions of reform, the prevailing mood was to continue to replicate, as closely as possible, the conditions of Test cricket within our own domestic structure. Namely to retain the County Championship in its current form of two divisions and 16 four-day matches a summer.The one major change recommended by the PCA is to increase the prize money 10-fold to a £1million pot.Promotion and relegation undoubtedly increases competitiveness and greater prize funds would intensify the focus at the very top end.

The surveys were first handed out at the start of the season but even after being reissued, in the light of extra Twenty20 cash, 62% insist the Championship is the most important competition.Other issues players were canvassed on included 12-month central contracts, non-England qualified cricketers and the general growth of Twenty20.’The PCA has presented its comprehensive views on the changing landscape of our game and is committed to working with the key stakeholders to ensure improvement both on the field and off it commercially,’ said PCA chairman Dougie Brown.

‘This document demonstrates the players’ willingness to preserve the rich heritage whilst embracing the new opportunities offered to the game.’In addition to 50% of England players having the potential to have their heads turned by IPL, almost as many (45%) admitted they would consider risking a ban from certain tournaments for the financial reward of the Indian Cricket League.Yet 50-over cricket remains popular with participants, with 79% of those surveyed pre-Stanford etc believing one-day internationals should be retained.Anticipated expansion of 20-over products has reduced room in the summer scheduling, however, and the ECB is currently quizzing spectators, via a market research strategy, on their favoured tournaments.

Amongst players the view is that the Pro40 competition should be scrapped with a huge 90% believing it is the least important of the domestic competitions.

Sydney, June 20 (IANS) Australian captain Picky Ponting is worried by the immense popularity of the Indian Premier League (IPL) and feels that cricket administrators have to manage the rapid growth of the Twenty20 league to ensure that international cricket remains at the pinnacle of the game. “I’m not taking anything away from the IPL. It was a fantastic tournament and will only get better. I enjoyed the couple of weeks I played. But the ultimate is to represent your country,” Ponting said in his column in The Australian Friday.

Ponting disagreed with his former team mate Adam Gilchrist, who was so taken by the popularity of the Twenty20 league that he said that the IPL could one day swamp Test cricket because of the enormous interest and money involved.

But the Australian captain made his apprehensions clear by saying that he was worried when he heard the news of IPL salary cap being removed so that young players can be offered huge money. He also hoped that Australian cricketers would not dump their country for the love of money.

“I certainly hope that’s not the case. I would not like to see exciting young players from Australia, or any other country, miss having the opportunity to play international cricket,” Ponting said.

He added that the International Cricket Council (ICC) should consider opening a window for the IPL to avoid any clash with international programmes.

“It would stop the need for players to make a choice between playing in the IPL or for their country. I understand that, with the difficulty of international programming, it would not be easy.

“And while a complete window may prove impossible, there should be consideration given to separating the IPL from the international schedule,” he said.
Source:thaindian.com

Fans maketh the sport, as many marketeers say. Even as people wait for the next edition of IPL, there are signs that this tournament would have to be accommodated as a permanent fixture in International Cricket Council (ICC) calendar. What makes it so compelling? Pure business logic, says Mr Dushyant Singh, Associate Director, Strategic and Commercial Intelligence, Transaction Services of KPMG India.

“The leading clubs in many sports are profitable; Arsenal and Manchester United, two of the leading clubs in European football, both earned EBITDA (a good metric to evaluate profitability) of over 25 per cent in 2007. For the IPL franchisees, we believe that steady EBITDA margins of 30 per cent are achievable by the fifth year,” he shares with Business Line.

And how? “How each IPL franchisee performs would depend on how effectively it builds and monetises its fan base and how well it is able to control its cost structure,” Mr Singh adds. Looks like IPL franchisees could be great IPOs in the making. Read on…

Excerpts from the email interaction:

How quickly do you think all the IPL franchisees will break even?

When the BCCI launched an annual league of city-focused clubs, represented by leading Indian and foreign players, playing Twenty-20 cricket, eight franchisees bid a combined $724 million (Rs 2,900 crore) to own these clubs.

In a sport with no culture of inter-club matches, these amounts were unprecedented. With the unqualified success of the inaugural edition of the Indian Premier League, it is now becoming clear that some of the clubs may break even sooner than they had initially estimated.

We believe that the clubs will be profitable, with most of them likely to break even in the first two years of operation. Not only that, we believe that they can earn substantial profits in the years ahead; the more successful franchises could have revenues of over Rs 150 crore and EBITDA margins of over 35 per cent in five years.

Reports say that two franchisees have made it in the first year…

At the commencement of the IPL season, owners of the various franchises had built plans around reaching break even in the first three years; yes, initial media reports indicate that two franchisees made a profit in the first year itself. However, our analysis indicates that at least two more are close to breaking even.

What is the biggest expenditure for an IPL franchisee?

The single biggest cost item for an IPL club is its annual licence fee to the BCCI; this varies from approximately Rs 26.8 crore, for the Rajasthan Royals, to nearly Rs 45 crore for the Mumbai Indians.

Interestingly against this, revenue comes from three sources — a fixed share of central revenues (sponsorships and rights sold by the BCCI); prize money that depends on the team’s performance; and sponsorships, tickets and merchandise that each franchisee sells directly.

Can you reveal the names of these two franchisees that, according to you, are close to breaking even?

Central revenues earned the clubs a little less than Rs 35 crore this year, more than half of which came from the ten-year media rights that the Sony-WSG combine won for a record breaking $918 million (Rs 3,700 crore). Since the amount earned was the same for all clubs, those that paid less for their franchises (Jaipur and Kolkata, for instance) were automatically closer to breaking even than the rest.

The sales part we understand. What determines a franchisee’s profitability?

While better team performance meant more prize money for some teams, the quantum (Rs 4.8 crore for the winners) was not a major factor in determining profitability. Local sponsorships that franchisees were able to sell were, however.

Teams such as the Kolkata Knight Riders, which sold nearly Rs 30 crore in team sponsorships and in-stadium advertising, were more likely to be profitable than others. Kolkata had another advantage — its home stadium seats 90,000 spectators (nearly twice that of the Wankhade Stadium in Mumbai); this means that despite lower ticket prices, this team was able to earn more from ticket sales than others.

How do you think teams with lower costs performed, financially speaking?

We estimate that different clubs spent between Rs 25 crore and Rs 30 crore each on marketing and administration this year, as they strove to build fan followings. Clubs with the lowest cost bases, and those that were more successful in selling sponsorships and stadium tickets were the ones most likely to break even.

Our analysis shows that both the Rajasthan Royals and the Kolkata Knight Riders earned a profit in the first year itself; we believe that the teams from Chennai and Mohali were quite close to break even as well.

What could be the additional sources of revenue that franchisees may be expected to tap in future?

Going forward, the strategy for each team is clear — maximise revenue from team sponsorships, and increase revenue from ticket sales. Apart from finding more team sponsors, franchisees will try to increase the mix of premium seating in their home stadiums, and generate revenues from F&B (food and beverages) — like multiplex theatres.

While breaking even may be the short-term objective for any franchisee, in the years ahead, most clubs will be looking at the profit margins they can expect to achieve each year and the value they can create for their owners.

How do you compare IPL’s franchisee model with, say, the English Premier League?

The leading clubs in many sports are profitable; Arsenal and Manchester United, two of the leading clubs in European football, both earned EBITDA margins of over 25 per cent in 2007. For the IPL franchisees, we believe that steady EBITDA margins of 30 per cent are achievable by the fifth year; how each IPL franchisee performs would depend on how effectively it builds and monetises its fan base and how well it is able to control its cost structure.

After breaking even, when do you expect most franchisees to really ramp up their revenues?

While the global media rights for IPL were sold for a ten-year period, the annual fees in the first five years are much lower than for the next five. Further, most of the central sponsorships were sold for a five-year period; at the end of this period, these sponsorships will be renegotiated at substantially higher rates. This means that in the sixth year, franchisees can expect their share of central revenues to almost double.

Local revenue streams will grow more steadily. Revenues from stadium gate receipts will grow at about 10 per cent year on year. Sponsorships rates and merchandise sales will rise too, as clubs build on their brand recognition.

As players perform better, do you see franchisees struggling in paying them bigger pay cheques?

On the cost side, the steepest increase will come from player salaries and acquisitions. These account for just over 10 per cent of the cost base today, but we expect them to grow almost six-fold to nearly a quarter of total cost in five years.

Players will, in future, be traded, and IPL franchises that are successful in identifying and nurturing talent could make a profit on ‘trading’ some of their players to other clubs. Replicating a strategy used by leading football and baseball clubs, IPL franchisees will need to develop ‘scouting’ programmes to identify and sign up talent early, and at a lower cost than their competitors.

Even taking fairly conservative revenue growth rates, one can expect some clubs to achieve EBITDA margins of 40 per cent or more by the sixth year. And once the licence fees cease (after ten years), these clubs would have an almost guaranteed profit stream stretching in perpetuity.

IPL in its current format is big. With more teams slated to join, could the bigger size be a constraint?

Growth would need to come from two sources; clubs playing more matches (the UEFA Champions League adds about 15 per cent to the revenues of Europe’s top football clubs), and building a wider fan base — a significant portion of Real Madrid and Manchester United’s revenue comes from sponsorship deals and merchandise sales in Asia. While revenues to a club, from the IPL tournament, can grow almost fourfold over ten years, they would ultimately be constrained by the size of the league itself.

It’s a given that IPL’s size is only going to get bigger. What are the options then for team-owners to make more revenue, after ten years?

Going forward, the ability of an IPL franchise to ‘break out’ and become a large media property depends on how popular Twenty-20 cricket becomes worldwide. This would translate into at least top IPL franchisees growing their revenues substantially by playing more matches against top teams from other leagues — similar to European Champions League where top clubs from various European nation football leagues play against one another. It is estimated that Champions League contributes approximately 15-20 per cent to the total revenues for the top four English clubs.

Source: D. MURALI AccountSpeak.blogspot.com

Following the announcement of England’s winter itinerary, ECB chief executive David Collier said that players would no longer be prevented from taking part in the lucrative Twenty20 league.

Centrally contracted players were banned from this year’s IPL due to international commitments.And a number of fringe players, including Ravi Bopara, Luke Wright and Sajid Mahmood all turned down offers in order to remain in county cricket.

The only English player to feature in the tournament was Hampshire captain Dimitri Mascarenhas, whose supporting role for eventual winners Rajasthan Royals sparked fears that he could have endangered his international prospects.
Source:skysports.com

Mumbai, June 11: The cash-rich Indian Premier League has reportedly approached chief selector Dilip Vengsarkar to take up the post of Director of Cricket Operations after he completes his term on the national selection panel in September-end.

However, the former India captain refused to confirm or deny it.”I don’t want to comment on it. Kindly ignore it,” he said when asked for his reaction to a report which said he has been offered Rs one crore for the high-profile job.

IPL CEO, Sunder Raman, refused to take calls on the issue despite repeated attempts to contact him. However, other sources in the Cricket Board confirmed that Vengsarkar has been offered a contract with a rider that he should not associate himself with any league that does not have the sanction of the BCCI.

“During the period of the contract and two years after its termination he’s not supposed to be involved directly or indirectly with any other league that is not sanctioned by the BCCI,” the sources revealed.

“The contract names him as a consultant and he will be a member of the IPL’s Governing Council (headed by IPL Chairman and Commissioner Lalit Modi). He will also be overall in charge of cricket operations for IPL,” informed sources said.

If he accepts the offer,’The Colonel’ will continue to be associated with the BCCI with whose officials he has not seen eye-to-eye on a few occasions, especially on the matter of continuing to write his regular column for a Marathi daily.

The BCCI had directed Vengsarkar to stop writing his column as it felt that there’s a conflict of interest there and the former India skipper had to swallow the humiliation in the ‘larger interest of Indian cricket’.

Source:expressindia.com

Franchises from the Indian Premier League will get first priority over players for the proposed Champions League, and any team that fields a cricketer from the unofficial Indian Cricket League will be automatically disqualified from the international Twenty20 competition, Lalit Modi, the chairman of IPL, has said.

However, Modi told Cricinfo that the Champions League was “still a long way away” and what has been agreed upon by various boards so far is “only an in-principle agreement” to host such an event. “The venues have not been decided, the dates are still open and we are trying to host the event this year,” Modi said.

The England and Wales Cricket Board had on Saturday issued a press release which said that the ECB, Cricket Australia, the BCCI and Cricket South Africa had “reached an agreement for the staging of the inaugural Champions League this autumn” for a top prize of US$ 5 million. However, Modi said he would be able to provide a clear picture only after the BCCI’s working committee discusses the issue during a meeting scheduled on June 22.

Asked about the Champions League’s regulations, Modi, who is also a vice-president of the BCCI, said that “it had been clearly resolved earlier” that the IPL franchises would get priority over cricketers in their team. But the franchises will have to pay a “relieving fees” to the player’s state team if both have qualified for the event, he said.

Elaborating on the case of Michael Hussey, who is caught between Western Australia and Chennai Super Kings for the Champions League, Modi said, “In the case of Michael Hussey, Chennai Super Kings has the option to keep him and pay a relieving fees to Western Australia. The option is with Super Kings.”

However, players like David Hussey, whose IPL team, Kolkata Knight Riders, failed to qualify for the Champions League, will have to play for Victoria, he said. “In case of David Hussey, he has to play for his home team if his IPL team has not qualified. If his home team has qualified, which it has, then he plays for them. The county option is his third fall back,” Modi said.

Modi also clarified that “any ICL player playing for any team automatically disqualifies that team from participating” in the Champions League. “No exceptions will be made under any circumstances,” Modi said.

Currently, about 24 ICL players have been signed up to play for various English counties - the top two Twenty20 teams from England will join Rajasthan Royals and Chennai Super Kings from India, the Titans from Pretoria and KwaZulu Natal Dolphins representing South Africa and Western Australia and Victoria from Australia in the Champions League.
Source: content-usa.cricinfo.com

Colombo: Hailing the opportunity to open with Sachin Tendulkar at the recently concluded Indian Premier League as “a big achievement”, Sri Lanka’s dashing opening batsman Sanath Jayasuriya has said he had “learnt a lot” from the maestro.

“I found that even after being in the game for a long time I still had a lot to learn by talking to Sachin. His cricket knowledge was amazing,” Jayasuriya said in an interview with local private radio Hiru FM.

The 38-year-old left-handed former Sri Lanka captain, who has scored over 10,000 runs in the one-day internationals, played for Mumbai Indians under Sachin’s captaincy and hammered the second fastest century (unbeaten), in addition to five half centuries in the IPL 20-20 tournament.

“He (Sachin) is a great human being and an excellent captain. Myself and Dilhara (Fernando) were able to learn a lot from him,” Jayasuriya said, describing the IPL series as “the best tournament” he had ever seen by all standards.

“The Indian Board had organised it superbly. IPL is now the world’s number 1,” he said, adding that it had provided the youngsters “the chance to talk to some of the great international players, share their experiences and learn from them”.

Jayasuriya, who retired last year from Test cricket, has represented Sri Lanka in 110 Tests and 411 ODIs and was reinstated into the Sri Lankan team for the forthcoming Asia Cup tournament in Pakistan.

The Sri Lankan national selectors said that Jayasuriya’s dashing form displayed in the IPL tournament has forced them to reconsider their decision and include him for the Asian Cup tournament commencing later this month.

The selectors also said that he would “definitely be playing in the next World Cup as long as the veteran left-hander maintains his fitness and form in the important games”.

Responding to a question whether he would play the next World Cup matches, Jayasuriya said he would do his utmost for the country.

“There is a lot of time to go before the next World Cup, so I am not able to say anything about playing in that. I am now back in the team and I am pleased with it - nothing will be greater than playing for your own country,” Jayasuriya said.

He became the third highest paid player (earning a whopping US $975,000) of the IPL, next to India’s Mahendra Singh Dhoni and Australia’s Andrew Symonds.
Source: Sify.com

IPL franchises will be able to trade players early next year ahead of the 2009 season, Lalit Modi, Chairman of the hugely successful tournament disclosed on Sunday.
“There will be a transfer window open early next year just ahead of the 2009 season to enable franchises trade players and bring in the ones they require,” he told PTI in an interview.

Stating that he had been “overwhelmed” by the success of the Twenty20 competition, Modi also disclosed that certain innovations would be introduced in the tournament.

“One of the innovation to be introduced next year would be orange neon ball. This would, however, depend on how successful the trials of the same are,” he said.

“This year we already introduced the Orange and Purple Cap innovations and the Kingfisher Team Fair Play award and will look at continuing with this tradition of innovation in the subsequent leagues,” he added.

Modi said the second season of IPL was not possible before the 2011 ODI World Cup, to be co-hosted by the Asian cricketing nations.

“The second season as of now is a very distant possibility and will not take place definitely until after the 2011 World Cup given the FTP commitments of the Test playing nations and India.

“By then, I firmly believe, IPL would have already established itself as a major event and carved a niche for itself on the international cricketing calender.”

“Importantly, though when the second season does materialise in the future it will not be a full-fledged season like the recently concluded inaugural season. It could, for instance, be a knock-out league or a format which we will evolve in due course of time.” Modi also made it clear that IPL was India’s domestic event and could not be co-hosted by two countries like India and Pakistan.

“No, the DLF IPL is, as the name suggests, a domestic cricket league, featuring the best of international and Indian talent. It will not be co-hosted in conjunction with any other country.

“I am certain that the success of the league will spawn a whole host of similar leagues around the world. Once that happens, it would be our endeavor to see that top two teams from each of the countries play in the Champions League, along the lines of the one being played in football currently.” On the success of IPL, Modi said it was beyond his expectations.

“To say that the inaugural season of the IPL has exceeded my expectations and those of the BCCI would, to simply put it, be an understatement,” Modi said.

“I have been truly overwhelmed by the success of the DLF Indian Premier League. In fact, the global response to the competition has been simply unbelievable, to say the least.

“I had imagined the IPL being huge in terms of spectator interests in India, but what we have achieved and the global interest that a domestic league has generated have been beyond my wildest imagination,” he said.

“The IPL has gained large viewerships in Australia, South Africa, South East Asia, the MENA region (Middle East and North Africa) and the Americas.”

The inaugural edition of IPL, contested by eight teams non-stop for 44 days and telecast live by a private television channel during the prime time, gripped the cricket lovers, reportedly exceeding the popularity of TV serials and Bollywood films. “Not to mention the TRPs that we have garnered in India which are quite frankly staggering to say the least. The success of the league is further exemplified in the Set Max’s revenue market share of the top nine Hindi entertainment channels,” Modi said.

“And all this because we have had some of the best cricketers from around the world… Frankly I could not have envisaged a more successful inaugural season than this year,” he added.

“Imagine the likes of Swapnil Asnodkar, Dhawal Kulkarni, Niraj Patel, Abhishek Nayyar (state-level players) and Yusuf Pathan getting mobbed by fans for their performances in the league.” On the revenue did BCCI generate though the IPL, Modi, also the Cricket Board President, said he had not information on that.

“I don’t know the exact nature of revenue the IPL has generated for the BCCI as of now… However, we have at all junctures through out the IPL process attempted to be as transparent as possible in terms of the financials and so have communicated these publicly at all time and so you could also do some back of the cuff calculations to derive a number,” he said.
Source: indiatoday.digitaltoday.in

The Indian Premier League (IPL) transported a handful of players from the obscurity of domestic cricket to international fame. Even the Board of Control for Cricket in India (BCCI) seems to have taken note of IPL performance in drafting Yusuf Pathan and Pragyan Ojha into the national team. However, advertisers are not convinced.

The newfound popularity of Swapnil Asnodkar, Ravinder Jadeja and Manpreet Gony, and those of Pathan and Ojha, is unlikely to earn them much endorsement money any time soon. At best, given IPL’s city-centric loyalty, they may bag deals for local or regional brands in the short-term.

“While the young players may have found favour with the masses, I believe that one needs to play for the nation before one can actually attract national level endorsements,” says Shailendra Singh, joint managing director with Percept Holdings, a big name in celebrity and talent management.

Doing well for the national team indeed matters much more. The two Sharmas — Rohit and Ishant — attracted deals in droves after their good performance in Australia. Both are citizens of Pepsi’s Youngistaan.

“I think it is premature to say that the new faces will be lapped up by the ad industry at this point. They need to prove themselves in the international arena and represent the country. Players like Ishant, who played a crucial role in Australia, have bagged prestigious accounts,” says Jeet Banerjee, managing director, Gameplan.

Even consumer durable companies, among the biggest cricket advertisers, are not sure about the pull of the IPL stars. “Whether there is an opportunity in taking these new players on board as brand endorsers depends on factors like brand identity and target segment. At LG we are not yet considering such a move,” says V Ramachandran, director-sales and marketing, LG Electronics India.

At best, the IPL stars can hope to bag local deals, like Pathan has. “Since IPL is about cities backing teams, there could be an opportunity for local-level advertising. Even MNCs, who wish to localise their advertising initiatives, might see an opportunity in signing up some one like Abhishek Nayar or Manpreet Gony,” adds Singh.
Source: business-standard.com