So what does the IPL postponement mean for the Indian sports & marketing ecosystem

06 May,2021

Screengrab from IPLT20.com

 

By Mahesh Ranka

 

Mahesh Ranka

The Indian Premier League is the biggest marketing and entertainment extravaganza that has had everyone hooked on to it for almost a decade-and-a-half.

 

That the 2021 edition will happen or no was a question raised by many, who were only shooting their thoughts, while BCCI and all the franchise owners were very sure and positive for the show to go on. With so much at stake and all the possible arrangements, it was only safe to assume that IPL would set an example in keeping live events alive in these unforeseen and testing times.

 

Come May 4, 2021, IPL was suspended and then postponed, to a date that’s not been decided yet.

 

There were many quarters constantly voicing concerns about three key things happening – the Assembly Elections, the Kumbh Mela and the IPL in these pandemic times. To me, IPL was the safest bet and the BCCI took the right step in putting a pause to the event.

 

In the past, IPL has shown it’s as much a festival as Diwali, as many category purchases have significant spike during these two festivals in India. Marketers will now be scratching their brains already to think of a Plan B.

 

Will the impact of this be felt? It’s a no-brainer, the question should be where all, will the impact be felt?

 

 

For IPL/ BCCI

IPL is not going to see a significant loss of revenue from the central sponsors or the broadcasters for sure as the agreements ensure that.  IPL valuation may also undergo a correction, which may reflect on the teams too.

 

A key aspect that will be at the centre of sports discussions will be from the global market perspective. Will this lead to concerns around many other cricket events, and other sports to be held in India?

 

ICC T20 World Cup isn’t too far and there are already talks of “if it moves to Dubai, BCCI will still hold the rights”. While this is great for cricket, for sponsors of the ICC event, they would be merely exposed as brands on broadcast and would run a campaign that will not have the same flavour as the event being hosted in India.

 

If it happens, the movement of the T20 World Cup will put tremendous pressure on holding a bi-lateral series and other sporting action in India, leading to opportunity and revenue loss to the board, fans as well as marketers.

 

Commercial stakeholders:

All the commercial stakeholders across would have to plan for a situation probably as unique as someone hitting a six off every ball in every over for 10 overs!

 

Disney – Star India:

As probably the single largest commercial stakeholder of IPL, Star India, has an uphill task on multiple fronts to realign its business and financial plans for the year. With a major part of the plan being IPL for Star Network as well as for Disney Hotstar, it’s going to be impossible in the near-term for Star to:

:: Find quality and engaging content to fill the programming  gap on television as well as HotStar.

 

With OTT growing significantly in  India, Disney-Star will have to scramble to get some very attractive programming to be on the growth path.

:: Build advertising revenue and plan for longer deals.

:: Push for subscription on OTT as well as television platforms. IPL being a key property to push subscriptions, a new plan will be in play to achieve objectives or even probably revise targets.

:: Revenue loss for now from all the syndication of rights globally, will also be a revenue gap that will not be filled by any other means.

 

All the above may leave an option open for competition to plan and execution some bold and radical moves to woo the audience.

 

A Brand’s Biggest Vehicle – The IPL

Brands and businesses plan their launches and campaigns specifically with IPL in mind. For them, the current situation will be a massive letdown, while some sponsors/ advertisers will be fine with the shift if IPL (whenever it happens), many will have to take a deep hard look at their half yearly plans if not annual.

Very clearly, new age brands like Cred and Dream11 had massive plans, so did the beverage companies – especially soft drinks in their prime season. For these three  categories, the opportunity to exploit is suddenly missing, and they’ll have to think hard and formulate new plans, with revised targets, in shortest possible time!

In fact their existing efforts (ad film, media plan, activation, etc)  and investments would have to be redeployed, scrapped or modified, as necessary.

Let’s think about Kotak – that was targeting topical credit card sales, with  seven team associations Or Upstox, who apart from growth, would have also had valuation gains in their radar by the end of IPL 2021!

 

Areas of concern for marketers that would crop up :

Timing & Seasonality: Season time  for some and in the first part of the business year for others, all calculations would go haywire and would need some extraordinary thinking, planning and execution to see through the year as planned.

Growth plans : The planned growth on the back of IPL campaign, will get a deep hard look-in for the scenario would change significantly. The impact of IPL is visible on any of the plans.

Reeling with uncertainty : Even if the brands are happy waiting for IPL, in the current scenario Uncertainty is the only Certainty. A third and probably a fourth wave might hit us, and no exact idea when. In such situation, everything is going to be fluid! And it will constantly keep the marketers  on their toes for the  plans they want to  prepare and execute.

 

IPL Teams:

All the franchisees have secured reasonably good revenues from sponsorships. And with no more franchise fee, they are sitting pretty on top dollar earnings from the central pool, in addition to their own sponsorships.

Almost all teams had made significant plans to leverage and build digital platforms and engagement, with the current development event those plans would  find it a challenge to meet the set objectives. A good chance of engaging with their fans will diminish fast, now that the IPL has been postponed.  Moreover, with the uncertainties, teams and their plans for to rest of the year will be fluid.

BCCI had announced and wanted to auction two more teams to be brought into the fold of IPL making it a 10-team affair from 2022. With the current scenario – pandemic and economic, and uncertainty for now, BCCI may find it challenging to unlock the value as per earlier estimates. It could lead to rescheduling the auction and inclusion of two more teams in IPL by a year or so.

 

Non Sponsor Brands – competing brands

With the leading or newer brands  going big on IPL, one thing is for sure, each of them hoped to gain handsome returns.

These brands end up simplifying  as well as amplifying the category (Upstox, Dream11, Unacademy) and also expand the market.

The other brands in these categories would have plans basis the market familiarity and growth because of the larger spending brands; trying to take a small part of the pie.

With the expansion of the market limited, each competitor would have to create new plans to further their growth.

 

Ancillary Businesses

All the constituents – ground management, display boards, bio-bubble, travel and  stay, production and other equipment , manpower etc. that are working with IPL directly or indirectly, will now have to look for opportunities, especially freelancers, temporary hires or contracted resources. IPL runs its own ecosystem and this time the ecosystem has been halted. There is a definite challenge in the market with respect to deployment of the resources.

 

Opportunity for BCCI / IPL

With the current situation and mood in the country, IPL could generate decent amount goodwill, by creating a movement towards support and help for the victims or sufferers of Covid19. Each IPL team and state board can take up a support role, helping patients with Oxygen, to  organise medical supplies.

While the easiest way  to help is to donate  money towards the treatment of Covid-19 patients, they would serve themselves and the community well by creating a path breaking idea, involving all cricket fans similar of the one that Sport Club do Recife did in 2014 in Brazil.

 

Mahesh Ranka is among the early specialists in the business of sports in India and is Founder and CEO, GamerChangerZ and Founder, Indus Sports. His views here are personal.

 

 

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