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“Any model that guarantees 70% of your revenue is a great business to be in”: Fraser Castellino

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In April 2014 he was appointed as the COO of Kings XI Punjab, the team that sparkled on field during the seventh season of the Indian Premiere League (IPL). Fraser Castellino has over a decade of experience of working in the sports industry.  Besides leadership roles in IPL teams like Royal Challengers Bangalore and Rajasthan Royals, he was also instrumental in setting up the Sahara Group’s polo and other non- cricketing ventures. Castellino is a marketing graduate from Mumbai and also holds a bachelor’s degree from St Xaviers College.

Ahead of the upcoming Champions League Twenty2O, Indiantelevison.com’s Herman Gomes talks to him about the franchises plan ahead and the factors that have contributed to the team making a profit this season.

Excerpts…

It was one of the best seasons for Kings XI Punjab having reached the finals. What are your thoughts?

Yes, you’re absolutely right. We went on to win 11 out of the 14 games in the home stretch which was great. I think what was most exciting for me was the fact that Kings XI Punjab this year, demonstrated a brand of cricket which people identified with. People actually wanted to come and watch us play the games, because they loved the entertainment factor around our team.

There were teams, who set up scores of 200 but we chased those down. There were teams that put us in to bat first, we scored and defended it. When I spoke to some cricket experts, one of them mentioned to me that teams did not know what to do with Kings XI Punjab. Opposing captains didn’t know whether to put us to bat or whether to make us chase or what to do at all because we guys seemed to tackle anything that came our way. That was a great and pleasant feeling.

It wasn’t also that we were going overboard with it, but it was great to know that so many people identified and wanted to watch Kings XI Punjab.

Earlier this year, KPH Dream Cricket showed a profit of Rs 78 lakh before tax. So you have finally broken even and made a profit. What has been the winning combination for your team?

Yes, we have made a profit this year. There were a couple of reasons that contributed to this. We made a lot of smart decisions about the way we spent money this year. One of the first things was with player costs. A lot of people don’t know this but 60 to 70 per cent of the cost is actually the player cost which is the amount of money you spend on buying the players.

If one spends Rs 60 crore, that’s 70 per cent of the budget. I think Kings XI Punjab this year was very smart in purchasing players and thus saved money. But having said that, we still bought a great team.

Secondly, our team performed well. When a team performs well, people want to buy the tickets and come to watch the matches.  In India, there is a typical problem. People want to come for the games but in exchange for a free ticket. But this time we had people who actually were willing to buy the tickets and come and watch because they were enthused about the kind of brand of cricket that we played.

Then there was sponsorship money. When a team is doing well, it makes money because the structure of the sponsorship contract ensures that when a team moves into the playoffs, the sponsor pays bonuses.

Then finally is the prize money you win. The winning team as well as the runner-up make very decent sum money which comes to the franchise.  These factors have contributed to our winning combination.

How well is the team preparing ahead of the upcoming Champions League?

The Champions League is a very clear tournament. We get a participation fee for qualifying and participating in the tournament. And we pay 10 per cent of the player cost for the team. So one is already in a very good position, since they are making some money even without doing anything. The rest is taken care by the organisers. The travel etc is all paid by the organisers so there is no cost to the franchise. The big upswing is winning the tournament because the prize money is half million dollars. So that is the target for us. So in terms of preparing, we are looking at the apple and saying let’s go and shoot it.

Have you looked at new deals with sponsors?

We have signed two new sponsors ahead of the upcoming Champions League which is Air Asia and HTC. There are also a couple of other brands that will be announced in a couple of days. It’s simple business actually. All brands want to associate with the winning combination and many do well and perform.

How difficult is it for a franchise to get a sponsor on board?

The IPL is a successful property. Brands, want to be associated with it. But there are only those limited number of teams. So I think as long as we see the IPL remaining prime, every team will receive sponsorship. The amount of sponsorship one earns will depend on how the team performs and the stars one has. We have done well this season and we hope to continue doing it.

How much of your local revenue comes from sponsorships?

Sponsorship would be about 60 per cent of our local revenue. The rest comes from gate revenues.

How is the team now approaching licensing and merchandising and how important is it for you?

Licensing and merchandising should be looked at a greater context. Licensing is still progressing but if one looks at merchandising and the amount that teams make from it, I think there is a lot of potential to grow further. For Kings XI Punjab there is great potential. The Punjabi fan base is large. Our catchment area is not just Punjab or Himachal but everywhere the Punjabi exists.  This can be UK, Toronto, Canada Dubai or Australia. Punjabis are everywhere and these are our fans. The answer to your question is if we can take our merchandising internationally, then I think we will have a different story to tell.

How much amount do you allot to digital marketing to interact with fans?

There is a small team that works on various programmes. We have interesting deals where we don’t spend much money on digital marketing.  We in fact make money from it. Digital is actually a revenue line.  It’s small right now but for every video we put on YouTube, we earn money from it. In digital marketing there is a way of earning money and that will be our focus growing forward.

During the off season what are the various programmes the team engages with?

During this time our team works on sponsors, ideation, planning, thinking about players. We have programmes to engage with our fans like the Kings XI Punjab Cup which is a local identifying talent tournament. It is played all across Punjab in cities like Jalandhar and Amritsar. We target players between the age group of 18 to 25 years. These are players who play for colleges, clubs and various tournaments.

Do you think the BCCI should be working more closely with teams to make them more profitable?

The BCCI has done what they had to do. They have sold the franchise and every owner has bought the teams. They haven’t changed the terms and we need to work within those frameworks we bought in 2008 to make money.  I think any business that guarantees you 70 per cent of your revenue is a great business to be in. A team owner may have a different view but I personally feel BCCI doesn’t have to do anything more.

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