Friday, March 14, 2008

Not just IPL, even ICL is good for the game

IPL, ever since it has been announced, has hogged the headlines so much so that the second edition of ICL is being conducted almost unnoticed.
IPL is doing a world of good - getting big corporates to invest in the sport as well as putting more money in the hands of players. Moreover, the business model of IPL allows organizers to have a great de-risking strategy -
  1. Establishment of team franchises - Rather than owning all teams as ICL does, IPL leased out each of the 8 city teams for the next 10 years. By doing this, it has incentivized each franchisee to invest in building a quality team, setting up local sports infrastructure and create local buzz for getting the crowds into match venues. ICL teams have so far failed to excite local cricket fans in each of the cities they represent.
  2. Spending limits on team building - By limiting the amount of money each franchisee can spend on building their teams, IPL has ensured teams are of similar strength, atleast on paper. This provides for close contests, raises viewer interest and breeds sporting rivalries between cities. In contrast, ICL divided players into teams themselves and ended up with lopsided teams - e.g. the new Lahore team in the 2nd edition of ICL is much stronger than any of the Indian city teams.
  3. Broadcasting rights sold in advance - for the next 10 years for a hefty billion dollar-plus amount. This large, long-term commitment from the broacasters binds them to invest in promoting IPL among their viewers and consequently raise ad revenues for themselves, while paying a fixed amount to IPL. On the other hand, ICL is telecast on Zee network's Zee Sports and its partner Neo sports, so there is no assurance of returns till the ad revenues come in.
  4. A big title sponsorship as well - IPL has everything in place well before its first version, whereas ICL didn't quite get it right. IPL now needs to ride on its initial momentum whereas ICL needs to think about sustenance.

Given all these advantages, IPL seems set to sweep to success when it launches its first edition in April 2008.

Beset with problems in organizing their cricket matches at quality venues, keeping its flock of cricketers together and building viewer interest for its still nascent league, ICL has to contend with the lack of a level-playing field. While non-cooperation from BCCI and its affiliates is par for the course, it really hurts and starts getting unethical (probably illegal as well) to ban ICL players from appearing in ICC-recognized matches.

ICL needs to learn from its me-too follower IPL on some of the strategies it has brought to the game. And while ICL's position as the first-to-market need not guarantee profits or long-term sustenance, it definitely deserves official recognition. There is easily enough space for IPL and ICL to co-exist - there are enough soccer leagues and they all do well. There is also an opportunity that they merge and become the same league - some of the teams could be in the premier league and the rest in a first division league.

Whichever way this interesting sports-business-politics-legal drama plays out in 2008 and the coming years, Subhash Chandra's enterprise needs to be commended. He forced BCCI out of its slumber to create an enduring business model that promises to change the sport forever.


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