Friday, May 09, 2008

My 2 Cents on the IPL

IPL = Indian Premier League. India's answer to the EPL (UK), NFL (USA) etc. I am sure there are zillions of articles/blogs on the web that gives its views on the IPL. This entry of mine came about because of another blog entry by my friend Gordon.

Gordon has an interesting and good analysis on the business strategies that various franchises owners in IPL are using.

Anyways, this is how the franchise system works. It has been around the US (and other parts of the world for a long time). It all depends on why an individual owns a franchise. There can be various reasons -

1. You loves the game so much that you want be involved in it. In this is the case, money comes secondary. You just want to win for yourself and for your team's fans. Once you start winning, more fans, more money. You will break even late but the profits (or losses) will be greater. I think Kolkata KnightRiders fall in this category. Other international examples - New York Yankees (Baseball), Dallas Mavericks(Basketball), Oakland Raiders (American Football). I must add Oakland has not won anything for a long time.

2. You do it as an investment or business opportunity like the Rajasthan Royals. You will be a stable organisation. But, you will never be a New York Yankees in terms of revenue or huge fan base and fame. Eg: Arizona Diamondbacks (Baseball)

3. Third Reason - You have too much money. Big Billionaires in the US own different sports franchises. Just because they do not know what to do with the extra cash, they buy these sports teams. These franchises perform indifferently depending on the people who actually run these teams. We will identify this kind of franchise in IPL in next few years.

Personally, I am intrigued how this whole IPL system will turn out in India and in the lives of my fellow Indians. Sports in the US helps many people focus on something else other than their personal lives. Take time off and relax with family and friends. I hope IPL will provide the same type of avenue for us and people will use it for the right things.

2 comments:

Gordon DSouza said...

Nice article ... However I dunno about point 1. Never met anybody who would pour money down a slippery slope. Point 2 is a hypothesis - It hasn't been proved. But with Point 3 you hit the nail on the head ... with a slight modification though ... Rich people who blow cash like no tomorrow, in my opinion, will 9 times out of 10 be people who have lots of unaccounted money. Could explain why oil tycoons, politicians and other colourful characters own private football clubs.

Rahul said...

Hey Venkat,

Glad to see activity on your blog. Good read.

As for understanding how junta stands to make money from IPL, this might be useful:

http://www.thehindubusinessline.com/2008/05/09/stories/2008050950570900.htm