he Indian Premier League (IPL) defied financial gravity at a time when the world
was struggling to fight the menace of recession. Even as capital became scarce,
the worlds hottest cricket property managed to renegotiate a nine-year broadcast
deal in 2009 for a whopping $1.6 billion. The earlier agreement, signed a year
ago, had valued the TV rights for $1.03 billion over 10 years.
temporary refuge in South Africa was a welcome aberration, establishing the IPL
as a global property. In 2010, the IPL became bigger and better as it attracted
larger audiences, costlier sponsorship deals and fatter franchise bids, growing
the cricket economy.
Then came the Lalit Modi saga and charges of match-fixing, rigging of bids, financial
irregularities and betting. The architect of the IPL is now suspended and a clean-up
exercise has begun.
parallel has often been drawn between the IPL and the English Premiere League
(EPL) that houses some of the worlds iconic soccer clubs including Manchester
IPL, however, has a big mountain to climb. Its TV rights, the main revenue supply
for the entire structure including the teams, went for much less. Last year the
EPL's TV rights bundles were acquired for $2.6 billion for 3 years. And it's not
just a big difference in value. More importantly, the EPL's TV rights will be
renegotiated twice before the IPL's current deal expires.
the IPL is just three years old and has seen a stupendous growth. It can learn
important lessons from the EPL as it scales up, including doing shorter term TV
deals in future as the property gets well established.
IPL team owners should also be cautious in not repeating the mistakes committed
by their EPL counterparts. Some of the EPL club owners have funded their acquisitions
through huge debt and have gone on to pay unrealistic amounts to purchase players.
In fact, the EPL clubs are popularly known as the 'rich boys' toys' that appeal
to the owner's ego and vanity.
an interview with Indiantelevision.com's Sibabrata Das, Intangible
Businesses valuation director Richard Yoxon talks about the challenges that sports
properties face as they grow up to be run like big commercial businesses.