Television

'Sponsorship rates have reduced by 20 per cent' : Mohit Burman - Kings XI Punjab co-owner

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Kings XI Punjab, the Mohali team for Indian Premier League (IPL), was bought for $76 million by Bombay Dyeing deputy MD Ness Wadia, actress Preity Zinta, Dabur India director Mohit Burman and Apeejay Surrendra Group chairman Karan Paul.

The four shareholders together formed KPH Dream Cricket Private Limited, the holding company of Kings XI Punjab.

Kings XI Punjab is eyeing sponsorship revenues while cutting down on marketing expenses.

In an interview with Anushree Bhattacharyya, Burman talks about how the economic downturn is going to upset the revenue targets of the team franchisees.

Excerpts:

Since Kings XI Punjab did not go for three-year sponsorship deals, how difficult has it been to retain them for the second IPL edition?

Spice Telecom is very much on board as our title sponsor. We are in the final stage of negotiations with Coca-Cola as our pouring partner. Kotak, Provogue and 9X, however, are not there this time.

As for new deals this year, we have signed up with United Spirits while Reebok is our apparel sponsor. We will be closing two more deals in the next four to five days. Overall, we are looking at signing eight to nine sponsors this year.

Has the downturn in the economy forced sponsorship rates to fall?

The whole world has changed and overall sponsorship rates have reduced by 20 per cent. We thought we were better off than those team franchisees who had gone in for three-year sponsorship deals. We felt we would be able to command higher sponsorship rates after the build-up from the first IPL tournament. But amid the economic downturn, the teams who signed three-year deals seem to be the smarter ones.

Does this mean that the revenue targets have gone awry?

Since the tournament went off on a high note last year, we were under the impression that we would break even this year. However, looking at the present situation, I don't think that franchisees will be able to break even before 2012. Most franchisees will not be able to make a profit this year, although the tournament will continue to be a success.

The fact that the IPL is held after a long gap doesn't help matters. Globally, leagues are played for eight to nine months with a short break, providing sponsors a continuous flow of events.

Where do you see most of your revenues coming from?

We hope to make more from our sponsorships, ticket sales and merchandising. This should account for over 60 per cent of our total revenues this year, unlike in the inaugural edition where the maximum came from the central pool. We also hope to get our act right on the ticketing sales front this year.

Do you plan to decrease the ticket prices to pack more audiences into the stadium?

We already have a pricing strategy. The ticket prices range between Rs 150 to Rs 6000, addressing different segments of audiences. But this year we are going to be very strict in terms of ensuring that people who wish to watch the matches do pay for the tickets.

Have you lined up your licensing and merchandising strategies?

For apparel licensing, we have already tied up with Reebok. We will be soon announcing our partner for making accessories like key chain, mugs, etc.

Have you trimmed your marketing expense this year?

We are bringing down our marketing cost to Rs 35 million, from Rs 50 million last year. The initial costs in building up a brand are obviously higher. For example, we made a video with Daler Mehndi last year - and that obviously increased our marketing budget. We don't see such a requirement for making another video this year.

'Since the tournament went off on a high note last year, we were under the impression that we would break even this year. However, looking at the present situation, I don't think that franchisees will be able to break even before 2012'

What role will Preity Zinta play to promote the franchisee this year?

We have already started our marketing initiatives through the King XI Punjab Cup. We had also sponsored the Manali winter festival in Punjab. This year we will be concentrating more on ground level activities in our catchment areas.

Preity Zinta is one of the owners and she is welcome to play whatever role she desires. She has already contributed a lot last year and as the tournament gets closer, I am sure she will help us in our marketing activities.

What was the idea behind organising the Kings XI Punjab Cup?

The idea is to reach out to the people of our catchment areas which include Himachal Pradesh, Punjab, Jammu and Kashmir, etc. At the same time, we want to promote the game of cricket at the grass root level. Since we have a coach and some of the best players from the world, we want to nurture young talent.

A few franchises have partnered with TV channels in search of cheer leaders. What are your plans?

We have got plans, but at this moment we are really concentrating on ground activities. Our idea is that instead of doing national hoity-toity shows on TV, we should concentrate on building the brand in our own locality. We believe that if we really want to make our franchise work, then we need to get closer to our fans and get them more involved with the team.

Are you looking at beginning a cricket academy as Ness Wadia said that the franchisee job is to acquire and groom new players?

We are setting up an academy and for that we have already got an academy coach. We should be able to roll out the academy a few weeks before the tournament.

Will Brett Lee's injury affect your team's performance?

I believe Lee will be fit to play for the tournament. We have, however, crafted a team keeping in mind the fact that Lee may not be able to play. Which is why we added West Indian pacer Jerome Taylor and Ravi Bopara.

You got England's Ravi Bopara for $450,000, three times his starting price of $150,000. Would you call this an intelligent investment, looking at the present market scenario?

Kolkata Knight Riders bought Mortaza at a very high rate. So was that an intelligent investment? Every team has to decide on their player investments, keeping many things in mind. While it is true that Bopara was expensive, it is a fact that we needed an all-rounder. And there were two other franchisees who were bidding for him. I believe Bopara would have gone for higher if other franchisees had not run out of money.
With the dates of the Lok Sabha polls coinciding with some of the IPL matches, how would franchisees be impacted if venues were changed?

The IPL committee had asked the franchisees to create a back-up plan. Franchisees have an option to play in one or two grounds in the nearby areas. Rescheduling, thus, will not affect the plans of the franchisees.

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