It was in August this year that I had an extended chat with Jitu (SportzVillage Director) and Manan Gupta (SportzConsult) over hot coffee, dosa, and idlis!
It's always fun to discuss the business of sports with both Jitu and Manan - because they are respectful listeners apart from being straightforward about what they think. Importantly, they understand the business of sport very well!
For some time, I have been observing the business of IPL very, very keenly. Not in terms of the millions of dollars or the thousands of spectators (these numbers are never correct - you do not need to obsevre them - you can make up your own and tell people that you know), but in terms of trends. I have this "thing" for observing trends ...
Just like many other businesses of the wild, wild west that came to India with a sinusoidal lag (animation, media, fashion etc. etc.), the business of sport is making a 20-30 year late entry into the Indian subcon. Naturally, the innovation-phobic managers in these businesses tend to replicate whatever happenned in the western world, and hope to push their ways through revenues and margins!
So on came the cheerleaders (who ended up repelling the Indian TV family), the jazzily coloured player uniforms (but the aweful bodylanguage, the evening stubble on the arrogant cheeks, the inferior behavior on-and-off the field of these players remained to make them as unattractive as the street-side lafanga), the merchandising attempts with the Reeboks and Nikes (who themselves fell for the illusive Indian sport market and did what they do with the EPL or the NFL - I'll write a whole blog about that soon).
In that chat with Jitu and Manan, I had opined that Lalit Modi will very soon do what ESPN and FOX did in the USA, Sky Sports tried to do in Europe, or what Manchester United successfully accomplished within their global empire - simulatenously own a popular sports property (read as "IPL") and a media house.
ESPN in the USA was facing the worst time of their cycle - almost nearing bankruptcy - when they started their own leagues, all around the US, in the upcoming industry of x-Games (mostly skateboarding). The sport became a hit in the Americas (it will be in India too - and I am looking to build a business there) with the demography that really mattered (believe me: the 25-35 male is the least lucrative demography in the world - it's the 20-35 females that matters, and more than them, it's the 15-25 people who rock)!
The great thing was ... since ESPN owned the X-Games property, all it's broadcasting happenned on ESPN exclusively for ... you guessed it ... $0 transactions in broadcasting rights :)
What else does a gold-miner need? The entire business of sport is about the exclusive rights of a sport property (broadcasting, player rights, team rights, merchandising rights blah blah blah). Media houses spend multi-million dollars to buy rights of sports leagues (you can only imagine how much Sony would have paid the BCCI for the telecasting rights of IPL) - and here was ESPN ready to spend Zot Million Dollars, and make fortune (and they are)!
It has been tried in India before! Subhash Chandra - who made it look as if the ICL is about the development of cricket, or development of the secondary class of cricketers - was a shrewed businessman when he launched the ICL. He already owned a media house (Zee Sports), and he wanted to own a sizzling-hot sport property (ICL). Exclusive telecast of the ICL on Zee Sports, he thought, would have done to him what his packaging business couldn't may be ...
The way sports broadcasting (or general broadcasting) is run in India, Jerry McGuire would turn crazy in his grave! Look at this: the BCCI owns a sizzling-hot sport property (IPL), and sells the rights to Sony for a few million dollars. Sony makes it's money through advertisements (alone). The end user gets to watch the games for (almost) no money!
This is charity! Blasphemy!
This is what I had suspected would happen: BCCI will kick Sony out of the picture (who are giving away hot-cakes for free to the end user) and start their own media-house with a cricket channel (let's call it BCCI TV - I am sure they will not be able to come up with anything better).
BCCI TV would have to pay Indian National Rupees Zero to own the exclusive rights of broadcasting the IPL. It will go to potential advertisers who will be willing to spend Indian National Rupees Millions for advertisement slots! But now comes the difference: they will, at some point of time, make it a Pay Per View channel - so the subscribers (read: "cricket freaks on India") would be told, "Watch the ENTIRE Indian Premiear League for just Rs. 300/-" ... and those guys who were watching the IPL for (almost) free till today, would have to pay Rs. 300 to enjoy it more. That makes is Indian National Rupees Millions from the subscribers!
Know what! The hot product of the IPL is so, so lucrative, that a typical cricket freak is almost 100% price-insensitive to it. He will pay anything to watch those T20 games. Rs. 300 is nothing in front of "anything" ...
So that's Millions, and more Millions!
Oh ... did I tell you what I read in the morning today in the Eonomic Times? It goes something like this: "[...] the Board of Control for Cricket in India (BCCI) is also planning an all-cricket channel [...]"
It's here ...
I wonder where they got this idea from! :P :P
Anyway, I think this is a shrewd business strategy. I wish it wasn't happenning in cricket, though. Moreover, when Priyadarshan Das Munshi had all the nice cards in his hand (central minister overlooking the Indian media, and head of Indian football - so media powerhouse, and football powerhouse) to do something similar within Indian football, and propel it further.
Only if wishes were true ...
Life is wasted on making a living.
