Campaign India Team
Mar 19, 2014

Double standards: Who hurts the most, when matches move from home?

Hiren Pandit and Prashant Singh speak with Raahil Chopra on the consequences and ways of making amends

Double standards: Who hurts the most, when matches move from home?

(L to R) Hiren Pandit, COO, TransStadia and Prashant Singh, GM, Octagon India

What are the ways in which a sports property gets affected if it’s moved from its home country?

HP: The excitement is lower compared to the city it was supposed to be held in. Ticket sales get affected – that’s a major problem for the franchise. For example, the Mumbai Indians can earn about Rs 20 crore per year on ticketing alone.

PS: The major loss is the on-ground buzz. That’s very critical and which in-turn affects marketing for franchisees. On-ground is something that is very local. For example, Mumbai Indians will do marketing in Mumbai itself and not Delhi and Bengaluru.

Who is affected the most by a shift in venue: on-ground sponsors, on air sponsors/advertisers (and therefore broadcaster) or other sponsors of the team/players? (When the time difference is such that it does not cripple viewership)

HP: On-ground sponsors are worst hit definitely, specially if they’re activating it. With regards to the IPL alone, Pepsi will be disappointed because South Africa seems like it’s more of Coke (Coca Cola) country. On-air sponsors won’t be seeing any difference. IPL is primarily an Indian brand, and activations can’t be done in the same way abroad. Pepsi had launched Atom during last year’s IPL, but if the tournament moves abroad, I don’t see how they’ll make such launches.

PS: The owners of the team come first here. There is an immediate loss of revenue which is measurable. Lack of gate sales may be anywhere between 15 to 30 per cent of the total revenue and that’s a tangible loss. Then come the on-ground sponsors. They’re losing out on benefits of engaging with the consumer. Post which comes the advertisers and on-air advertisers. And then would be the general advertiser who buy spots because everything stems in and germinates from the energy on-ground.

What are the options available to make up for a revenue drop for franchisees (through ticketing)?

HP: This is very difficult to replace. The ticketing part is difficult to tackle and secondly from a sponsor perspective they (franchisees) don’t get the mileage they normally get. Brands using the IPL to advertise in the summer to generate sales will also be effected.

PS: Specifically to the IPL there is nothing available. Licensing and merchandising doesn’t have a big enough share in the revenue. The longevity of the tournament means (45 day venue in case of the IPL) the relevance doesn’t exist for more than 75 days (15 before and 15 after) at the max. That’s one of the biggest challenges right now.

Specific to the IPL, does it make sense to have a shorter tournament instead of moving it to another country?

HP: There are pros and cons for making the tournament shorter. There are more cons than pros though according to me. Everyone from sponsors to fans will feel short-changed. Tweaking the tournament will be like fooling the fans and won’t generate positive feedback.

PS: It’s like saying I’m going for a five-course meal, but I’ve only got the starters and the restaurant shut down. So the obvious answer is no.

From a sports marketing point of view, I would much rather see a tournament happening in its entirety.

Are there any instances when a tournament has been shifted out if its home country and still delivered?

HP: I don’t think any other league has moved other than the IPL. The first time it moved out (during the second season) it did well because it was still a very young and new property and was generating new interest.

PS: The second season of the IPL delivered in its entirety. It didn’t deliver for the teams (for obvious reasons as stated earlier). There was a drop in the TV ratings, but that wasn’t substantial. For the equity of the tournament, it was extremely important that the tournament took place rather than it not taking place. Even if you look at the World Cup, it’s always the host country that benefits the most out of the tournament.

Does shifting the tournament out of local venues affect team loyalty? What is the long term impact?

HP: Team loyalty has to do with the team construct. Now with the new auctions, some teams like Mumbai and Chennai have a core, while others have a new team. Somewhere down the line the core team needs to stay to generate fan base. International tournaments have followers like Indians supporting the La Liga and English Premier League.

PS: Absolutely. We need to realise that every five years there’ll be a general election and a possibility of the tournament not happening. So organisers need to look at it this way. That planning has to be looked after. Secondly, the biggest mistake they make is keeping it till the last minute. We know how our systems work and this should have been planned before (the tournament moving out). A workshop (with the team owners) could be arranged to figure how best it could be maximised.Secondly, if Pepsi is paying Rs 100 for the IPL, if it goes abroad, Pepsi will have to pay Rs 50 more for activations. If they do that, the managing committee should decide to probably split that and pay Rs 25 of the extra amount. I’m hoping five years later the same scenario doesn’t take place.

Is there a positive impact, specific to IPL, of moving it to other countries in the region?

HP: It is positive on one side that you’re taking the sport to popularise it in other countries. There’s also a negative side because the value for sponsors is short-changed. It is good possibly from the point of involvement in other countries, but beyond that there’s not much going for it.

PS: Yes, there is a positive impact. Football is looking at summer tours to get new fans and that’s been a success. Looking at that example, there’s a silver lining that you’re reaching out to new markets and giving them an experience of an Indian domestic tournament. That’ll in turn build a new fan base and look at brands and sponsors beyond Indian companies. I think there has to be a give and take, and whenever a tournament like the IPL is moving out, the management has to give a lot of give instead of a lot of take.

Source:
Campaign India