Where will you find the Mumbai
Indians, the Royal Challengers, the Deccan Chargers, the Channai Super Kings,
the Delhi Daredevils, the Kings XI Punjab, the Kolkata Knight Riders and the
Rajesthan Royals? In the Indian Premier League (IPL) - the most exciting
sports franchise that the World has seen in recent years, with seemingly
endless marketing opportunities (and strengths, weaknesses and threats of
course!). This SWOT analysis is about
The Indian Premier League.
Strengths
- The Indian Premier League (IPL) is based upon
the Twenty20 cricket game which should be completed in 2 ½ hours. That
means that is fast-paced and exciting, and moreover it can be played on a
weekday evening or weekend afternoon. That makes it very appealing as a
mass sport, just like American Football, Basketball and Soccer. It is
appealing as a spectator sport, as well to TV audiences.
- The IPL has employed economists to structure
its lead so that revenue is maximized. The more unified the sport, the
more successful it is.
Weaknesses
- Twenty20 has been so popular that it could
replace other forms of cricket i.e. damage the game that generated it.
- Some fans will also have to pay for travel to
the ground. There may be large queues for the most popular games. There
may be some distance between where the fan lives and the cricket ground.
- Stakes are very high! Some teams may not
weather short-term failures and may be too quick to get rid of key
managers and players if things don't go well quickly. Famously, Royal
Challengers Bangalore (RCB) sacked their CEO Charu Sharma for watching his
team lose 6 from their first 8 games.
- Some teams have overpriced their
advertising/sponsorship in order to gain some short-term returns (e.g.
Royal Challengers), and some sponsors and are moving their investment the
more reasonably priced teams.
Opportunities
- Since it has a large potential mass audience,
IPL is very attractive as a marketing communications opportunity,
especially for advertisers and sponsors.
- The league functions under a number of
franchises. Each franchisee is responsible for marketing its team to gain
as large a fan-base as possible. The long-term success of all of the
franchises lies in the generation of a solid fan-base. The fan-base will
generate large TV revenues.
- Different fans will pay different amounts to
watch their sport. There will be corporate hospitality, season tickets,
away tickets, TV pay-per-view and other ways to segment the market for the
IPL.
- There is a huge opportunity for merchandising
e.g. sales of shirts, credit cards and other fan memorabilia. Grounds can
also sell refreshments and other services during the games.
- Marketers believe that the teenage segments need
to be targeted so that they become the long-term fan-base. Their parents
and older cricket fans may prefer the longer, more traditional game. The
youth market may also impress on their parents that they want them to buy
their club's merchandise on their behalf - as a differentiator or status
symbol.
- Franchise fees will remain fixed for the up
until 2017-18, which means that the investment is safe against inflation
which is traditionally relatively high in India.
Threats
- The level of competition that the Board of
Control for Cricket in India (BCCI) can generate determines long-term
viability of the league. If the level of competition drops, then revenue
will fall. For example, if the top names in cricket cannot be attracted to
India, the appeal of the game will fall. Often getting hold of the big
names is a problem - Australian domestic cricket runs concurrent with the
IPL and if players move form Australia to India to follow the money then
their domestic game will be hit. This is known as 'Free Agency.'
- If the franchisee's fan-base does not generate
income then they may not have the cash to pay the salaries of the best
players. However, if you invest in the best players and they do not win
the trophies, then you may not see a return on your investment. It won't
be a quick return on investment - so owners need to be in it for the
long-term.
- Franchises are very expensive. The most
expensive franchise - Mumbai Indians - was bought by Mukesh Ambani for
$111.9 million, whereas the lowest priced franchise - Rajasthan Royals was
picked up by Manoj Badale for a mere $67 million.
- The most highly priced teams may not be those
that have the early success. Revenues will come from the most highly
supported teams.
The Indian Premier League (also
known as the "DLF Indian Premier League" for sponsorship reasons;
often abbreviated as IPL), is a Twenty20 cricket competition created by the
Board of Control for Cricket in India (BCCI)
