Catch IPL

The now $2 billion Indian Premier League property has come through an economic slowdown and other challenges with higher valuations for stakeholders.

Despite higher costs and smaller gate revenues, franchises will, on an average, take home about Rs 46 crore each, estimate insiders.

“I can’t share a figure on earnings. We are closing our books right now. But what’s important is what has come out of this IPL and what it has done for the franchises.

“IPL is now a far more global brand, and has acquired fans from not just South Africa but other parts of Africa too, and England with the English players participating this time. It’s brought value for franchises and sponsors who now realise it is not a domestic tournament and is a bigger brand today,” says Mr Sundar Raman, CEO, IPL.

At least two teams are believed to be looking out for investors. “Given the shift from innovation in 2008 to an established brand in 2009, strategic investors and PE players have shown interest in taking a stake in IPL,” said Mr Rajesh Jain, Head ICE practice, KPMG.

Meanwhile, the IPL is developing new revenue streams in licensing and hospitality. The next trading window, player regulations and introduction, whether by auction or draft, of the 79 rebel league players, once a part of the Essel Group’s Indian Cricket League, will be announced soon. Next year, IPL will make an early start, in March possibly, before the World T20 Championship in April 2010.

“Gate revenue is going to be lower, but we will be compensating the franchises for that,” said Mr Raman. “It’s understandable: the lowest stadium capacity in India is 20,000 while the highest in South Africa is 30,000. Kimberley was only 8,000 seats, the stadium at Bloemfontein seats 15-16,000 while capacity at Ferozeshah Kotla is 45,000, and at Eden Gardens it’s nearly a lakh,” he added. Each franchise could get another Rs 10-12 crore compensating last year’s gate earnings.

“We would have loved to be profitable in year one. While we have had stronger sponsorship revenues, we are dependent on IPL to finalise all modalities — such as how much we will be billed for, how gate revenues will be shared — of hosting it in South Africa,” said Mr Amrit Mathur, COO, Delhi Daredevils.

“We have no control over team expenses. As far as we are concerned eight of the eight teams should be profitable,” said Mr Raman.

Shilpa Shetty and Raj Kundra’s 12 per cent buy in Rajasthan Royals before IPL-2 took the team’s valuation to $140 million (Rs 660 crore) before the tournament had taken place; that is nearly double the price at which the team was bought.

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