Campaign India Team
May 10, 2010

Will Brand IPL be affected by the controversy?

If there’s been one common refrain around the recent IPL controversy, it’s been about the gradual erosion of Brand IPL. Campaign India spoke to key industry professionals to understand the impact of the controversy on the brand. The general consensus?

Will Brand IPL be affected by the controversy?
If there’s been one common refrain around the recent IPL controversy, it’s been about the gradual erosion of Brand IPL. Campaign India spoke to key industry professionals to understand the impact of the controversy on the brand. The general consensus? While Brand IPL has enough equity to withstand the mud- slinging, valuations for teams and sponsorships are likely to be dealt with, far more prudently than before.
 
Volkswagen’s Lutz Kothe says, “The IPL itself has been able to build a strong brand equity and will come back strongly in the next season.”
 
Madison World’s Sam Balsara believes that the controversy is likely to impact ratings for season four, for the better, if at all and feels that there will be an impact on valuations of individual teams and other IPL related properties as the risk factor attached to the League gets highlighted. As for how this will impact the premium that SET Max has charged for previous seasons, he responds, “Since the number of matches are doubling, supply will double and this could affect prices. SET Max will have to create packages in such a way, may be alternate matches, such that outlay remains more or less the same as last year.”
 
LMG’s Lynn de Souza believes the game of cricket and IPL are bigger than this episode and both will recover from it. She however is dismissive of the premium that SET Max will be able to charge for the next season, adding, “IPL 3 did not even reach the level of IPL 1. An average of 4.5 is not good enough to sustain this year’s rates, and that too with the clutter being unbearable. Our study shows that this time, viewers were really pissed off by the clutter.”
 
MEC’s Shubha George believes that the controversy and the game are separate in viewers’ minds. As for valuations, she feels the controversy will result in more prudence. She adds, “All valuations are still notional and on paper. No existing owner has sold a stake yet. The recent controversies will ensure that any stake sale is financially probed a lot more prudently than perhaps when it was all awash with euphoria.” On premiums for season four, she says, “Sony’s rates will be a reflection of the TV audience. As long as the games bring in robust audience numbers, IPL will remain a premium property.” Aegis Media’s Ashish Bhasin feels that as long as the Entertainment and Cricket format is not tinkered with, the popularity of the league will remain unchanged.
 
Mindshare’s R. Gowthaman feels the valuations for IPL-4 sponsorships will be adversely affected. He adds, “The process of bidding (which is the source of the valuation) is under question/scrutiny. In some form or the other, thanks to media, the actual point at which franchisees can break even is now open to the public. We will have to wait and see how the things pan out. It is also important to note that all the player contracts are for a three year period and which is now over. All franchises will now have to bid fresh even if this event had not taken place.”
 
Media Agency Chief
 Sam Balsara, chairman and MD, Madison World
“The controversy will impact ratings, for the better, if at all. If it is on the front page of mainline papers for days on end shouldn’t that increase public interest in it? It will negatively affect valuations as it is of relevance to a buyer and a seller and the buyer will now be more cautious, as the risk factors that could affect the League’s continuity be highlighted. Brands will remain interested as the series spells viewership. As the number of matches are doubling, supply will double and this could affect prices. SET MAX will have to create packages in such a way, may be alternate matches, such that outlay remains more or less same as that of last year.”
 
Media Agency Chief
 Lynn de Souza, chairman and CEO, Lintas Media Group
“To some extent, yes. IPL 1 was a real hit, IPL 2 began to show the cracks, and IPL 3 will go down in history for the wrong reasons. So the brand which added a global, youthful, entertaining and fast paced appeal to cricket, has now picked up a money-laundering, tax-evading, FEMA-violating side, which may or may not be true, but will hamper the overall image. As for valuations, sponsors buy viewers, and viewers watch the game. The game and IPL are bigger than this episode and both will recover especially if India fares well in Champions League T20 in South Africa. New bosses may introduce some new marketing elements which will help.”
 
Media Agency Chief
 Ashish Bhasin, chairman- India and CEO- S.E Asia, Aegis Media
“Any brand under so much controversy will be affected to an extent. But public memory is short and finally people are interested in cricket and not in the IPL management as much. There will be some short term effect. Some sponsors may reconsider their association but I don’t think it will be significant.
The controversy will not impact the valuations for sponsorship of IPL- 4 as long as the format is not changed. Comments saying that the entertainment factor will be curbed, might affect viewership. To the general audience, it does matter whether IPL is providing both entertainment and cricket or not. If we lose eyeballs, we will lose sponsorship monies.”
 
Media Agency Chief
 Shubha George, chief operating officer- South Asia, MEC
“I dont think the sport or the game in the Indian Premier League has been affected.
I think the general public see cricket, the sport and cricket administration as two different things. What they love is the sport, what is under controversy is the cricket administration - and the two are different.
All valuations are still notional and on paper. No existing 
owner has sold a stake yet. 
So, the numbers on team valuations are fairly untested in reality. The recent controversies will ensure that any stake sale is financially probed a lot more prudently than perhaps 
when it was all awash with euphoria.”
 
Media Agency Chief
 R. Gowthaman, leader, Mindshare- South Asia
“IPL is not affected by the recent controversy. As a product/format, it has its equity firmly in place. The ratings are as per expectations this year. There is a premium which we are already paying and have gotten used to. I believe, the performance of IPL4 is now linked to the kind of players and the teams that will be lined up. Valuation of sponsorships for IPL-4 will be affected as the process of bidding is under question/scrutiny. It is also important to note that all the player contracts are for a three year period and which is now over. All franchises will now have to bid fresh even if this event had not taken place.”

 

Source:
Campaign India