Recession to have little effect on the IPL event

Ashish Khurana - Televisionpoint.com | Mumbai
The second edition of the Indian Premier League (IPL) will get its flag-off in April and auctions for players will begin in Goa from February 6. But with recession looming large in every sector, all eyes will be on just how big the bucks get this time around. Already, people are speculating that this year's mini-cricket gala could be low on enthusiasm.

Till the time that the auction process is complete, it will be hard to give a verdict, but going by all the heat generated by the IPL, recession seems to have had little effect on the event and its franchisees.

Names of 100-plus players from different countries have been released by the governing body. This year, English players will be up for grabs too, and as expected, the market is abuzz with the names of Kevin Pietersen and Andrew Flintoff.

The price tag they will command, is also the subject of furious speculation. There are indications that Pietersen could be the second most expensive player in IPL after MSD. While Dhoni had a price tag of £ 1.5m, Pietersen stands to command £ 1.02m.

Sundar Raman, CEO, IPL, allays fears of the recession hitting the tournament. "We have long-term contracts with the players, irrespective of the present situation. And if we just go by the consumer reach for the industry, which is growing at a pace of 12-15 per cent, there is every reason to rejoice. Even the advertising rates of our media partners have jumped from last time," says Raman on a positive note.

Quiz him on the high-base pricing of foreign players, and Raman says, "The free market will decide which player gets what price. The team composition and availability of players will also matter in deciding prices. Of course, in accordance with IPL's vision, we are encouraging local talent."

Kolkata Knight Riders has the same mantra — bring on the youngsters. KKR director Joy Bhattacharjee elaborates, "We have already re-signed two temporary players from last season — Brad Hodge and Ajantha Mendis. But we have also signed Australian Moises Henriques for this season, and may need one more foreign player."

On the prospect of English players and Australian Michael Clarke's availability, Bhattacharjee says, "Will the players be available for the whole season? They might not be available to us during the most crucial time, which will go against the players demanding a high price."

That, however, can only be laid to rest once the tournament takes off. Televisionpoint.com speaks specially to Ness Wadia, owner, King's XI Punjab; Time Wright, CEO, Deccan Chargers; Manoj Badala, owner, Rajasthan Royals; B Vanchi, owner/CEO, Delhi Daredevils and R Balachandran, official, Mumbai Indians. Vijay Mallya of Royal Challengers and Shah Rukh Khan of Kolkata Knight Riders did not respond to the questionnaire at the time of filing of this story.

The market is down and recession is at its worst. Is that going to affect your IPL plans?
Ness Wadia: Every business has to adapt to its external environment and King's XI will do so without compromising on quality or delivery in all that we do.
Tim Wright: Delivering an outstanding in-stadium experience is crucial. We intend to put more into that this year.
Manoj Badale: Franchises know they are still in the early stages of investing. We are not immune to recession, which will affect sponsorship and financing capacity; but we should not forget that over 80% revenues are guaranteed.
B Vanchi: Recession will impact IPL. IPL is a business and it is unlikely that it will remain unaffected by the economic situation. I expect franchises to be restrained in their spending and show-casing of the event.
R Balachandran: Key directions and foundation were set in the first season. Now some fine tuning and adjustments are needed. The need for adjustments and changes are not fundamental, but only incremental.

Is the $ 2 million increase in spending capacity enough ?
Ness Wadia: In our view the money is more than adequate.
Tim Wright: $ 2 million for 2009 additions at the auction is fine. Deccan Chargers' strategy will be very focused.
Manoj Badale: Teams will have a different perspective on salary caps, but ours is simple. We would rather have not seen any increase, as it allows teams to correct mistakes. We think a cap is critical to preserve 'investor appetite'.
B Vanchi: It is enough. Player salary is a sensitive subject. There are instances globally when clubs have failed owing to runaway player costs. In this business players are assets. They must be valued from ROI perspective.
R Balachandran: At any given time one needs to work within a given framework and keep in mind that US$2m is a large sum. We think it is sufficient.

With trading window, how much will team loyalty matter ?
Ness Wadia: King's XI have built a very close association with all involved. It is our responsibility and commitment to ensure that we not only assist players in becoming the best, but also motivate them to do so. I personally believe that team loyalty will matter.
Tim Wright: Loyalty and a strong team culture takes time to build. You cannot demand loyalty but you can create it.
Manoj Badale: Any owner who believes players will put loyalty above money is naive. It may play a role for few players who will be an exception. I believe that a team needs to be together for some time, but there is a limit to what management can do.
B Vanchi: Players cannot leave a team unilaterally. Both team and player have to agree for a player to be placed in trading block. 2 factors have to be balanced: Need for continuity and loyalty, need for prudent trading.
R Balachandran: We feel two factors will govern the issue of loyalty: a) Our conduct in the first year will speak for us, b) we will never do anything against the wishes of players as we believe that we are partners.

How would you like to sum-up your experience from the inaugural season of IPL?
Ness Wadia: A wonderful learning experience. Watch out for us in season two.
Tim Wright: That the IPL is very open, any team can win it. That makes it a very exciting league for fans and players.
Manoj Badale: The most incredible experience and the most incredible execution that I have seen. The unexpected way that Royals captured the heart of the nation and achieved both business and sporting success.
B Vanchi: Phenomenal. We were a part of a warlike effort to put up an entertainment and sporting event of global dimensions. IPL has undoubtedly raised India's stature in eyes of the world and we are proud of it.
R Balachandran: Fantastic and intense: great experience, great fun, great learning, great sense of direction for the future. And most importantly, fans loved it.

IPL, as a business model, was still in its infancy in the inaugural year. Are team owners in a better position now ?
Ness Wadia: Every company requires constant change and improvement in all that it does. King's XI in cricket is no exception.
Tim Wright: The great triumph of IPL is that no-one is calling for major changes.
Manoj Badale: I think we have to first focus on the improvements that we have to make as franchisees. The league has over-delivered, yet we still have much to do. My only hope is that it continues to focus on cricket as this is entertainment , not the razzmatazz.
B Vanchi: IPL business model is in its adolescence. It will evolve till it matures and becomes sustainable over the long-term. This necessitates that it is win-win for all stake-holders. We expect it to evolve and become financially sustainable for the franchises.
R Balachandran: The experience in the first season will be used to fine-tune plans in coming season. The tournament has just begun and there is a lot to build and learn. We think the existing structure is working fine and it is too early to think of changes.