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IPL not moneyball anymore

india Updated: Apr 04, 2012 09:36 IST

What started as a billion-dollar spectacle in Indian sport may be crumbling unexpectedly.

A day before the Indian Premier League (IPL) begins in Chennai, HT has learnt that its title sponsor and realty major DLF is considering pulling out from next year.

Then, 40% of ad slots on SET Max, the official broadcaster, remain unsold.

And Bollywood, which, in the past had been wary of releasing movies during the IPL season, is shedding its cricket phobia and boldly going ahead with 22 film releases during the league’s eight-week schedule, Taran Adarsh, a film trade analyst, told HT.

The signs, analysts said, are clear: IPL is no longer as hot as it used to be. But the organisers denied any crisis.

“I don’t think there is any cricket fatigue. Everything is fine and response to everything is great. The answer will come once the tournament gets underway,” said Sundar Raman, CEO, IPL.

Former IPL Commissioner Lalit Modi said IPL still remained the most innovative league in the last 30 years, despite the setbacks.http://www.hindustantimes.com/Images/Popup/2012/4/04_04-pg-01b.jpg

“There have certainly been some issues in the run up to the fifth edition which haven't been helpful...Perhaps I would have done things differently,” Modi told HT in an emailed response.

Sources told HT that DLF is not keen on investing any more in IPL.

It had won the title sponsorship rights for the first five editions of IPL for Rs 200 crore. The league’s organisers will call for fresh bids later this year but DLF enjoys the first right of refusal. It means the title sponsorship will go to another bidder only if DLF refuses to extend the contract at the price quoted by the highest bidder.

It’s too early to comment. But if the bids for the next five years are beyond a certain threshold limit, we might consider not continuing with the title sponsorship contract,” a DLF spokesperson told HT.

Then, demand for ad spots on official broadcaster SET Max has been lukewarm.

The channel has priced each 10-second ad spot for IPL 5 at Rs 5 lakh, down almost 40% from Rs 8 lakh last year, but media buyers said most advertisers haven’t committed any funds yet, and would rather wait till the tournament gets underway – to negotiate even lower rates.

Till Tuesday, SET Max had sold only about 40% of the 2,500 seconds of ad spots on sale for each match, a media buyer from Madison India, who spoke to HT on condition of anonymity, estimated.

“This is sharply lower than in previous years when it had blocked about 90% of the ad spots before the tournament got underway,” he added.

“We have cut down our advertising spend in the tournament by 80% compared to last year,” said Alok Bharadwaj, senior vice president, Canon India.

“Return on investment is plummeting sharply. Where the rates are jumping over 15-20% year on year, the returns are not directly proportionate," he added.

The organisers and broadcasters, however, maintained that everything was business-as-usual for the 76-match tournament that takes place from April 4 to May 27.

“Advertiser’s traction is okay. It is better compared to the time we started a month ago. Let the tournament gain momentum,” said Rohit Gupta, president (sales) at MSM India, which owns SET Max.