By ANUSHREE BHATTACHARYYA
Indiantelevision.com Team

(7 February 2009 9:30 pm)

NEW DELHI :India Cements, the owner of the Chennai Super Kings IPL franchisee, knows where the moolah lies. And hence, with the second IPL season peeping just round the corner, India Cements has not only begun partnering with various brands for merchandising but has also started planning in-stadium hospitality activities.

Speaking to indiantelevision.com, India Cements head marketing Rakesh Singh said, "It was a successful first year at the IPL. For the second edition, we are expecting revenues from merchandising deals as well as sponsorships to be more than last year. CSK is already a brand due to the success we got in the first year; so from the second season we will work on strengthening the brand. While gate collections and sponsorship will contribute to 60 per cent of the revenue, 40 per cent is expected from the central pool."

The company has already stitched deals with Star Vijay for two reality shows/talent hunts - Chennai Super Kings Juniors (CSK Juniors) and Chennai Super Kings Cheerleaders (CSK Cheerleaders). As part of its merchandising initiative, the franchisee has once again teamed up with its licensees, Reebok and Peter England for sportswear and formal apparel under the CSK umbrella. Furthermore, the company has roped in new merchandising partners including Future Group which would be creating a range of products from toys to casual wear. Instruments and art material manufacturer Camlin, a Hyderabad-based mobile VAS (value-added-service) company, will make its logo, wallpaper etc available on mobile devices through shortcode for the second edition of IPL. Aircel continues with the team as a sponsor.

And though the company has already signed in a beverage partner, it declined to divulge the details at the moment stating that the same company is also in talks with other teams for sponsorship deals.

The merchandising deals have a revenue share model built in, wherein, if any merchandiser sells ten CSK branded articles, India Cements will receive 10 per cent of the revenue portion collected from the sale.

Interestingly, the company will not be putting in top dollar behind advertising this year. Singh confirms this saying the idea is to partner TV channels and brands and build the CSK brand through on- ground activations.

Another revenue stream that the franchisee is hoping to tap into is in-stadium hospitability. "While last year we did not get ample time to prepare ourselves on how to utilise the stadium as a revenue generator, this year, with enough time in hand, we are sure this will definitely grow. We are working on a plan on how to make the entire stadium a better experience for cricket lovers who come there," added Singh.

On the team front, the CSK seems to be packed with better talent. After the recent decision by the Pakistan Cricket Board to ban its players from the IPL, CSK, at the recently held IPL in Goa on 6 February saw English quickie Andrew Flintoff being added to its ranks. India Cements paid a hefty $1.55 million to bag Flintoff, apart from picking Sri Lankan Thilan Thushara and Australian George Bailey.

With the three new additions, it seems like CSK's strategy to have an action packed team is complete.

As per Singh, India Cements had its eyes on Flintoff since the very beginning of the auction process. One of the costliest players, Flintoff will be available to play in the first three weeks of the IPL when the Australian and South African players would be missing from the action. Thus, the franchisee felt it was important to have an all rounder in the beginning of the series, playing for the team.

Meanwhile, though the franchisee is quite aware of the on-going slowdown faced by the Indian economy, it feels that the ongoing recession-sting will not hamper IPL's growth.

According to Singh, "Yes, it is true that had the recession not affected the world economy, there would have been a substantial growth in IPL this year. Nevertheless, IPL will still be successful in garnering revenues as most of the advertisers are aware that IPL has a very high viewership. Thus, they had already allotted separate budgets for it. Also, for most of the companies the financial year begins from March and advertisers are conscious of the kind of platform that IPL provides. Therefore, they are ready to invest in the brand."

Initial public offering plans for the IPL teams have been doing the rounds for some time now. So does CSK plan to raise money through an IPO some time now?

Singh rubbished these as rumours saying that the team is part of India Cements and there are no IPO ambitions. Singh further added that India Cements put up an IPL team as it was the best way to build its brand, as the company has been associated with cricket for more than a decade.

Owned by India Cements and captained by MS Dhoni, last year CSK not only emerged as one of the finalists at the inaugural edition of the IPL, but also broke even quite easily. India Cements earned Rs 350 million from Set Max, the official broadcaster of IPL, and the BCCI. It also pocketed Rs 130 million from ticket sales and around Rs 240 million from merchandising and sponsorship deal thereby taking its take home revenues to Rs 720 million.

In terms of expenditure, last year India Cements paid Rs 360 million as franchisee fees, Rs 240 million on players and team management and Rs 120 million on advertising and merchandise. Thus, the company had spent about Rs 720 million in the first edition of IPL.

That along with the runner's up tag surely qualifies for a super performance. Now if it only could better that in IPL season 2.