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Breaks and break evens in IPL

cricket Updated: Mar 26, 2009 00:22 IST
Kadambari Murali Wade
Kadambari Murali Wade
Hindustan Times
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Now that the games are finally on, here's the next poser: Is the Indian Premier League's second season actually going to result in major losses for the IPL because of the move to South Africa?

There have been reports that it will, because of the heavy subsiding it would have to do — of potential franchisee losses and the financial arrangements that would have to be reached with Cricket South Africa and its affiliated associations.

But talk to IPL insiders and team officials and while they are waiting for the final commercial arrangements/realignments, they don't think the hits will be major. In fact, many believe that team owners at least, will stand to have increased revenues of about 20 per cent. Here's why.

Drinks after 10 overs?

While this is yet to be confirmed, it is said that this season the IPL is contemplating introducing a drinks break after 10 overs in each session.

If it materialises, that break will give the broadcaster more advertising time and a chance to make more money.

In-stadia advertising

There is no local selling of boards/hoarding in stadiums during the IPL.

The in-stadia advertising basically consists of boards representing the main IPL sponsors (DLF, Hero Honda, Kingfisher, Vodafone, Citibank etc). In addition, the franchisee owners get 12 boards per match in their home base, which they give to their own sponsors — they are not sold separately.

While they are unlikely to get these boards in SA because of the lack of a home ground, there is no revenue loss involved.

TV deals & soaring rates

Each 10 second ad slot is reportedly in the range of 4 lakh, which works out to about 24 lakh per minute, or an extra Rs. 2.4 crore for an extra 10 minutes of ad time. Multiply that into 59 games and you have a cool 140 crore more in the kitty.

In any case, the renegotiated television deal is likely to bring in a half a billion dollars more over the next nine years of the IPL. In the earlier (weighted) deal, the IPL was netting about 300 crore in the first five years and double that over the next five.

The new deal has it evened out every year, so it looks like an increase of about Rs. 250 crore this year alone (which will be shared with the teams). In addition, the TV audience will be larger, with more people in India tuning in.

A cheaper option?

While the logistics of the whole thing seem nightmarish, the costs involved are unlikely to be prohibitive. Why? Top hotels in South Africa, generally speaking, are less expensive than ones in India.

With 30,000 room bookings expected over five-weeks, there will definitely be special deals worked out on hotel and travel. Even in India, grounds were not free, with Rs 50 lakh per match per ground being the standard agreement, unless there was a special agreement.

In addition, the IPL Board was paying a subsidy to all state associations here, a higher one for hosting associations, but everyone got paid anyway. South African associations have nowhere near India's money, or expectations. That should make a difference.